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EXHIBIT 10.31
PLEDGE, SECURITY AND ESCROW AGREEMENT
This Pledge, Security and Escrow Agreement (this "Agreement") is
entered into as of May 1, 1998, by and among TEKGRAF, INC., a Delaware
corporation (the "Purchaser"), TEKGRAF SUB II, INC., a Georgia corporation
("Acquisition Sub"), MARTEC, INC., a California corporation (the "Company"),
Xxxx Xxxxx (the "Company Shareholder"), and First Union National Bank, a
national banking association (the "Escrow Agent").
WHEREAS, the Purchaser and the Company have entered into an Agreement
and Plan of Merger (the "Merger Agreement") by and among the Company, the
Company Shareholder, Acquisition Sub and the Purchaser.
WHEREAS, the Merger Agreement provides that an escrow account will be
established to secure the Company's and the Company Shareholder's
indemnification obligations to the Indemnified Parties under the Merger
Agreement on the terms and conditions set forth herein.
WHEREAS, the parties hereto desire to establish the terms and
conditions pursuant to which such escrow account will be established and
maintained.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used in this Agreement and
not otherwise defined shall have the meanings given them in the Merger
Agreement.
2. Consent of Company Shareholder. By virtue of the Company
Shareholder's approval of the Merger Agreement, the Company Shareholder has
consented to: (a) the establishment of this escrow to secure the Company
Shareholder's indemnification obligations under Article V of the Merger
Agreement in the manner set forth herein and therein, and (b) all of the other
terms, conditions and limitations in this Agreement and the Merger Agreement.
3. Escrow and Indemnification.
(a) Escrow of Shares. On the Closing Date, the Purchaser shall
deposit with the Escrow Agent a certificate for 60,000 Purchaser Shares (the
"Escrow Shares"), issued in the name of the Escrow Agent or its nominee, as
escrow agent. In addition, in the event the Purchaser elects, pursuant to the
provisions of Section 1.3(h) of the Merger Agreement, to waive the Profit
Shortfall Adjustment and the Profit Surplus Adjustment, the shares of Purchaser
common stock held in the escrow account established by Section 1.3(e) of the
Merger Agreement shall be transferred into the escrow account created pursuant
to this Escrow Agreement (the "Transferred Shares"), to be treated in all
respects as Escrow Shares hereunder and the Transferred Shares shall be
distributed to the Company Shareholder pursuant to Section 5(a) hereof. The
Escrow Shares 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 any party hereto. The Escrow Agent agrees to accept delivery of the Escrow
Shares and to hold the Escrow Shares in an escrow account (the "Escrow
Account"), subject to the terms and conditions of this Agreement.
(b) Indemnification. The Company Shareholder has agreed in Article
V of the Merger Agreement to indemnify and hold harmless the Indemnified Parties
from and against specified Damages. The Escrow Shares shall be security for such
indemnity obligation of the Company Shareholder, subject to the limitations, and
in the manner provided, in this Agreement.
(c) Dividends, Etc. Any securities distributable to the Company
Shareholder in respect of or in exchange for any of the Escrow Shares, whether
by way of stock dividends, stock splits or otherwise, shall be
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delivered to the Escrow Agent, who shall hold such securities in the Escrow
Account. Such securities shall be issued in the name of the Escrow Agent or its
nominee, as escrow agent, and shall be considered Escrow Shares for purposes
hereof. Any cash dividends distributable to the Company Shareholder in respect
of the Escrow Shares shall be distributed to the Company Shareholder.
(d) Voting of Shares. The Company Shareholder shall have the
right, in his sole discretion, to direct the Escrow Agent in writing as to the
exercise of any voting rights pertaining to the Escrow Shares, and the Escrow
Agent shall comply with any such written instructions. In the absence of such
instructions, the Escrow Agent shall not vote any of the Escrow Shares.
(e) Transferability. The interest of the Company Shareholder in
the Escrow Shares shall not be assignable or transferable, other than by
operation of law. Notice of any such assignment or transfer by operation of law
shall be given to the Escrow Agent and the Purchaser, and no such assignment or
transfer shall be valid until such notice is given.
4. Administration of Escrow Account. The Escrow Agent shall
administer the Escrow Account as follows:
(a) If an Indemnified Party has incurred or suffered Damages for
which it is entitled to indemnification under Article V of the Merger Agreement,
the Indemnified Party shall, on or before the date of the expiration of the
representation, warranty, covenant or agreement to which such claim relates,
give written notice of such claim (a "Claim Notice") to the Company Shareholder
and the Escrow Agent. Each Claim Notice shall state the amount of claimed
Damages (the "Claimed Amount") and the basis for such claim.
(b) Within 20 days after delivery of a Claim Notice, the Company
Shareholder shall provide to the Indemnified Party, with a copy to the Escrow
Agent, a written response (the "Response Notice") in which the Company
Shareholder shall: (i) agree that Escrow Shares having a Fair Market Value (as
computed pursuant to Section 6) equal to the full Claimed Amount may be released
from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares
having a Fair Market Value equal to part, but not all, of the Claimed Amount
(the "Agreed Amount") may be released from the Escrow Account to the Indemnified
Party or (iii) contest that any of the Escrow Shares may be released from the
Escrow Account to the Indemnified Party. The Company Shareholder may contest the
release of Escrow Shares having a Fair Market Value equal to all or a portion of
the Claimed Amount only based upon a good faith belief that all or such portion
of the Claimed Amount does not constitute Damages for which the Indemnified
Party is entitled to indemnification under Article V of the Merger Agreement. If
no Response Notice is delivered by the Company Shareholder within such 20-day
period, the Company Shareholder shall be deemed to have agreed that Escrow
Shares having a Fair Market Value equal to all of the Claimed Amount may be
released to the Indemnified Party from the Escrow Account.
(c) If the Company Shareholder in the Response Notice agrees (or
is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to
all of the Claimed Amount may be released from the Escrow Account to the
Indemnified Party, the Escrow Agent shall, promptly following the earlier of the
required delivery date for the Response Notice or the delivery of the Response
Notice, transfer, deliver and assign to the Indemnified Party such number of
Escrow Shares held in the Escrow Account which have a Fair Market Value equal to
the Claimed Amount (or such lesser number of Escrow Shares as is then held in
the Escrow Account).
(d) If the Company Shareholder in the Response Notice agrees that
Escrow Shares having a Fair Market Value equal to part, but not all, of the
Claimed Amount may be released from the Escrow Account to the Indemnified Party,
the Escrow Agent shall promptly following the delivery of the Response Notice
transfer, deliver and assign to the Indemnified Party such number of Escrow
Shares held in the Escrow Account which have a Fair Market Value equal to the
Agreed Amount (or such lesser number of Escrow Shares as is then held in the
Escrow Account). A determination with respect to the remainder of the Claimed
Amount shall be made in accordance with subsection 4(e) below.
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(e) If the Company Shareholder in the Response Notice contests the
release of Escrow Shares having a Fair Market Value equal to all or part of the
Claimed Amount (the "Contested Amount"), the matter shall be settled by binding
arbitration in Atlanta, Georgia. All claims shall be settled by three
arbitrators in accordance with the Commercial Arbitration Rules then in effect
of the American Arbitration Association (the "AAA Rules"). The Company
Shareholder and the Indemnified Party shall each designate one arbitrator within
15 days of the delivery of the Company Shareholder's Response Notice contesting
the Claimed Amount. The Company Shareholder and the Indemnified Party shall
cause such designated arbitrators mutually to agree upon and designate a third
arbitrator; provided, however, that (i) failing such agreement within 45 days of
delivery of the Company Shareholder' Response Notice, the third arbitrator shall
be appointed in accordance with the AAA Rules and (ii) if either the Company
Shareholder or the Indemnified Party fails to timely designate an arbitrator,
the dispute shall be resolved by the one arbitrator timely designated. The
Company Shareholder and the Indemnified Party shall pay the fees and expenses of
their respectively designated arbitrators and shall bear equally the fees and
expenses of the third arbitrator. The Company Shareholder and the Indemnified
Party shall cause the arbitrators to decide the matter to be arbitrated pursuant
hereto within 60 days after the appointment of the last arbitrator. The
arbitrators' decision shall relate solely to whether the Indemnified Party is
entitled to receive the Contested Amount (or a portion thereof) pursuant to the
applicable terms of the Merger Agreement and this Agreement. The final decision
of the majority of the arbitrators shall be furnished to the Company
Shareholder, the Indemnified Party and the Escrow Agent in writing and shall
constitute a conclusive determination of the issue in question, binding upon the
Company Shareholder, the Indemnified Party and the Escrow Agent, and shall not
be contested by any of them. Such decision may be used in a court of law only
for the purpose of seeking enforcement of the arbitrators' award. After delivery
of a Response Notice that the Claimed Amount is contested by the Company
Shareholder, the Escrow Agent shall continue to hold in the Escrow Account a
number of Escrow Shares having a Fair Market Value sufficient to cover the
Contested Amount (up to the number of Escrow Shares then available in the Escrow
Account), notwithstanding the occurrence of the Termination Date (as hereinafter
defined), until (i) delivery of a copy of a settlement agreement executed by the
Indemnified Party and the Company Shareholder setting forth instructions to the
Escrow Agent as to the release of Escrow Shares, if any, that shall be made with
respect to the Contested Amount, or (ii) delivery of a copy of the final award
of the majority of the arbitrators setting forth instructions to the Escrow
Agent as to the release of Escrow Shares, if any, that shall be made with
respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow
Shares from the Escrow Account (to the extent Escrow Shares are then held in the
Escrow Account) in accordance with such agreement or instructions; provided,
however, if the claim related to a third party claim the amount of which is
contested and the subject of litigation, the Escrow Agent shall not release the
Escrow Shares being held in connection with the Contested Amount of such third
party claim until a final order or other final resolution or settlement has been
entered or reached in the underlying litigation determining the amount of such
claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow
Account (to the extent Escrow Shares are then held in the Escrow Account) in
accordance with such final order or final resolution or settlement.
5. Release of Escrow Shares.
(a) In the event that Purchaser elects, pursuant to the provisions
of Section 1.3(h) of the Merger Agreement, to waive the Profit Shortfall
Adjustment and the Profit Surplus Adjustment, one half of the Transferred Shares
shall be distributed to the Company Shareholder on the first anniversary of the
Closing Date. Except as otherwise set forth herein, promptly after the
Termination Date, the Escrow Agent shall distribute to the Company Shareholder
all of the Escrow Shares (including any remaining Transferred Shares) then held
in escrow. Notwithstanding the foregoing, if an Indemnified Party has previously
given a Claim Notice which has not then been resolved in accordance with Section
4, the Escrow Agent shall retain in the Escrow Account after the Termination
Date a number of Escrow Shares (including Transferred Shares if necessary)
having a Fair Market Value equal to the Claimed Amount covered by any Claim
Notice which has not then been resolved. Any funds so retained in escrow shall
be disbursed in accordance with the terms of the resolution of such claims.
(b) Any distribution of all or a portion of the Escrow Shares to the
Company Shareholder shall be made in accordance with the percentages set forth
opposite such holders' respective names on Exhibit B attached hereto; provided,
however, that the Escrow Agent shall withhold the distribution of the portion of
the Escrow Shares
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otherwise distributable to Company Shareholder if he has not, according to
written notice provided by the Purchaser to the Escrow Agent, prior to such
distribution, surrendered his Certificates pursuant to the terms and conditions
of the Merger Agreement. Any such withheld shares shall be delivered to the
Purchaser promptly after the Termination Date, and shall be delivered by the
Purchaser to the Company Shareholder upon surrender of his Certificates.
Distributions to the Company Shareholder shall be made by mailing stock
certificates to the Company Shareholder at his address shown on Exhibit B (or
such other address as may be provided in writing to the Escrow Agent by any such
holder). No fractional Escrow Shares shall be distributed to Company Shareholder
pursuant to this Agreement. Instead, the number of shares that Company
Shareholder shall receive shall be rounded down to the nearest whole number; and
the Escrow Agent shall sell such number of Escrow Shares as is equal to the
aggregate of the fractional shares that would otherwise be distributed to the
Company Shareholder and shall distribute the proceeds of such sale to the
Company Shareholder otherwise entitled to a fractional Escrow Share.
6. Valuation of Escrow Shares. For purposes of this Agreement,
the Fair Market Value of the Escrow Shares to be retained in the Escrow Account
pending a final resolution of a claim shall be determined based upon the average
of the closing prices of the Purchaser Common Stock on the Nasdaq National
Market System for the twenty trading days immediately preceding the date on
which the claim is made. The Fair Market Value of the Escrow Shares to be
released from the Escrow Account after a final determination/resolution of a
claim shall be determined based upon the average closing prices of the
Purchaser's Common Stock on the Nasdaq National Market System for the twenty
trading days immediately preceding the date of such final
determination/resolution.
7. Amounts Payable by Company Shareholder. The amounts payable by
the Company Shareholder under this Agreement (i.e., the fees and expenses of
arbitrators payable pursuant to Section 4(e), the fees of the Escrow Agent
payable pursuant to Section 12 and the indemnification obligations pursuant to
Section 11 shall be payable solely as follows. The Company Shareholder shall
notify the Escrow Agent of any such amount payable by the Company Shareholder as
soon as they become aware that any such amount is payable, with a copy of such
notice to the Purchaser. On the sixth business day after the delivery of such
notice, the Escrow Agent shall sell such number of Escrow Shares (up to the
number of Escrow Shares then available in the Escrow Account), subject to
compliance with all applicable securities laws, as is necessary to raise such
amount, and shall disburse such proceeds to the party to whom such amount is
owed in accordance with the instructions of the Company Shareholder; provided
that if the Purchaser delivers to the Escrow Agent (with a copy to the Company
Shareholder), within five business days after delivery of such notice by the
Company Shareholder, a written notice contesting the legitimacy or
reasonableness of such amount, then the Escrow Agent shall not sell Escrow
Shares to raise the disputed portion of such claimed amount, and such dispute
shall be resolved by the Purchaser and the Company Shareholder in accordance
with the procedures set forth in Section 11.
8. Termination. This Agreement shall terminate upon the later of
the date which is eighteen (18) months after the Date of Closing (the
"Termination Date") or the distribution by the Escrow Agent of all of the Escrow
Shares in accordance with this Agreement; provided that the provisiions of
Sections 4, 5, 10, 11, and 12 shall survive such termination.
9. Notices. All notices, instructions and other communications
given hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) via a reputable
nationwide overnight courier service, in each case to the address set forth
below. Any such notice, instruction or communication shall be deemed to have
been delivered two business days after it is sent by registered or certified
mail, return receipt requested, postage prepaid, or one business day after it is
sent via a reputable nationwide overnight courier service.
If to the Purchaser and/or the Acquisition Sub:
Tekgraf, Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxx
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If to the Company:
Martec, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
If to the Company Shareholder:
Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
If to the Escrow Agent:
First Union National Bank
Attn: Corporate Trust - GA9094
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxx
Any party may give any notice, instruction or communication in
connection with this Agreement using any other means (including personal
delivery, telecopy or ordinary mail), but no such notice, instruction or
communication shall be deemed to have been delivered unless and until it is
actually received by the party to whom it was sent. Any party may change the
address to which notices, instructions or communications are to be delivered by
giving the other parties to this Agreement notice thereof in the manner set
forth in this Section 9.
10. Liability of Escrow Agent.
(a) Escrow Agent shall have no liability or obligation with
respect to the Escrowed Cash or the Escrowed Shares except for Escrow Agent's
willful misconduct or gross negligence. Escrow Agent's sole responsibility shall
be for the safekeeping, investment, and disbursement of the Escrowed Cash or the
Escrowed Shares in accordance with the terms of this Escrow Agreement. Escrow
Agent shall have no implied duties or obligations and shall not be charged with
knowledge or notice of any fact or circumstance not specifically set forth
herein. Escrow Agent may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth and accuracy of
any information contained therein, which Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the person or parties
purporting to sign the same and to conform to the provisions of this Escrow
Agreement. In no event shall Escrow Agent be liable for incidental, indirect,
special, consequential or punitive damages. Escrow Agent shall not be obligated
to take any legal action or commence any proceeding in connection with the
Escrowed Cash or the Escrowed Shares, any account in which Escrowed Cash or the
Escrowed Shares are deposited, this Escrow Agreement or the Merger Agreement, or
to appear in, prosecute or defend any such legal action or proceeding. Escrow
Agent may consult legal counsel selected by it in the event of any dispute or
question as to the construction of any of the provisions hereof or of any other
agreement or of its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from
any liability whatsoever in acting in accordance with the opinion or instruction
of such counsel. Purchaser and the Company Shareholder, jointly and severally,
shall each promptly pay, upon demand, one-half of the reasonable fees and
expenses of any such counsel.
(b) The Escrow Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrowed Cash or the Escrowed Shares, without determination by the Escrow Agent
of such court's jurisdiction in the matter. If any portion of the Escrowed Cash
or the Escrowed Shares is at any time attached, garnished or levied upon under
any court order, or in case the payment, assignment,
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transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in case any order, judgment or decree shall be
made or entered by any court affecting such property or any part thereof, then
and in any such event, the Escrow Agent is authorized, in its sole discretion,
to rely upon and comply with any such order, writ, judgment or decree which it
is advised by legal counsel selected by it is binding upon it without the need
for appeal or other action; and if the Escrow Agent complies with any such
order, writ, judgment or decree, it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such compliance even though
such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
11. Indemnification of Escrow Agent. From and at all times after
the date of this Escrow Agreement, Purchaser and the Company Shareholder,
jointly and severally, shall, to the fullest extent permitted by law and to the
extent provided herein, indemnify and hold harmless Escrow Agent and each
director, officer, employee, attorney, agent and affiliate of Escrow Agent
(collectively, the "Indemnified Parties") against any and all actions, claims
(whether or not valid), losses, damages, liabilities, costs and expenses of any
kind or nature whatsoever (including without limitation reasonable attorneys'
fees, costs and expenses) incurred by or asserted against any of the Indemnified
Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation Purchaser and the
Company Shareholder, whether threatened or initiated, asserting a claim for any
legal or equitable remedy against any person under any statute or regulation,
including, but not limited to, any federal or state securities laws, or under
any common law or equitable cause or otherwise, arising from or in connection
with the negotiation, preparation, execution, performance or failure of
performance of this Escrow Agreement or any transactions contemplated herein,
whether or not any such Indemnified Party is a party to any such action,
proceeding, suit or the target of any such inquiry or investigation; provided,
however, that no Indemnified Party shall have the right to be indemnified
hereunder for any liability finally determined by a court of competent
jurisdiction, subject to no further appeal, to have resulted solely from the
gross negligence or willful misconduct of such Indemnified Party. If any such
action or claim shall be brought or asserted against any Indemnified Party, such
Indemnified Party shall promptly notify Purchaser and the Company Shareholder in
writing, and Purchaser and the Company Shareholder shall assume the defense
thereof, including the employment of counsel and the payment of all expenses.
Such Indemnified Party shall, in its sole discretion, have the right to employ
separate counsel (who may be selected by such Indemnified Party in its sole
discretion) in any such action and to participate in the defense thereof, and
the fees and expenses of such counsel shall be paid by such Indemnified Party,
except that Purchaser and/or the Company Shareholder shall be required to pay
such fees and expenses if (a) Purchaser and/or the Company Shareholder agree to
pay such fees and expenses, or (b) Purchaser and/or the Company Shareholder
shall fail to assume the defense of such action or proceeding or shall fail, in
the sole discretion of such Indemnified Party, to employ counsel satisfactory to
the Indemnified Party in any such action or proceeding, (c) Purchaser or the
Company Shareholder is the plaintiff in any such action or proceeding or (d) the
named or potential parties to any such action or proceeding (including any
potentially impleaded parties) include both Indemnified Party and the Company
Shareholder and/or Purchaser, and Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company Shareholder or
Purchaser. Purchaser and the Company Shareholder shall be jointly and severally
liable to pay fees and expenses of counsel pursuant to the preceding sentence,
except that any obligation to pay under clause (a) shall apply only to the party
so agreeing. All such fees and expenses payable by the Company Shareholder
and/or Purchaser pursuant to the foregoing sentence shall be paid from time to
time as incurred, both in advance of and after the final disposition of such
action or claim. All of the foregoing losses, damages, costs and expenses of the
Indemnified Parties shall be payable by Purchaser and the Company Shareholder,
jointly and severally, upon demand by such Indemnified Party. The obligations of
Purchaser and the Company Shareholder under this Section 11 shall survive any
termination of this Escrow Agreement, and the resignation or removal of Escrow
Agent shall be independent of any obligation of the Escrow Agent.
The parties agree that neither the payment by Purchaser or the
Company Shareholder of any claim by Escrow Agent for indemnification hereunder
nor the disbursement of any amounts to Escrow Agent from the Cash Escrow Account
or the Share Escrow Account in respect of a claim by Escrow Agent for
indemnification shall impair, limit, modify, or affect, as between Purchaser and
the Company Shareholder, the respective rights and obligations of Purchaser, on
the one hand, and the Company Shareholder, on the other hand, under the
Underlying Agreement.
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12. Fees and Expenses of Escrow Agent. Purchaser and the Company
Shareholder shall each pay one-half of the amount required to compensate Escrow
Agent for its services hereunder and, in addition, shall each pay one-half of
the amount required to reimburse Escrow Agent for all of its reasonable
out-of-pocket expenses, including attorneys' fees, travel expenses, telephone
and facsimile transmission costs, postage (including express mail and overnight
delivery charges), copying charges and the like. All of the compensation and
reimbursement obligations set forth in this Section 12 shall be payable one-half
each by Purchaser and the Company Shareholder, jointly and severally, upon
demand by Escrow Agent. The obligations of Purchaser and the Company Shareholder
under this Section 12 shall survive any termination of this Escrow Agreement and
the resignation or removal of Escrow Agent.
13. Resignation and Removal of Escrow Agent. Escrow Agent may
resign from the performance of its duties hereunder at any time by giving ten
(10) days' prior written notice to the Purchaser and the Company Shareholder or
may be removed, with or without cause, by the Purchaser and the Company
Shareholder, acting jointly by furnishing a joint written direction to Escrow
Agent, at any time by the giving of ten (10) days' prior written notice to
Escrow Agent. Such resignation or removal shall take effect upon the appointment
of a successor Escrow Agent as provided hereinbelow. Upon any such notice of
resignation or removal, the Purchaser and the Company Shareholder jointly shall
appoint a successor Escrow Agent hereunder, which shall be a commercial bank,
trust company or other financial institution with a combined capital and surplus
in excess of $5,000,000. Upon the acceptance in writing of any appointment as
Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Escrow Agent, and the retiring Escrow
Agent shall be discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for actions taken as
Escrow Agent hereunder prior to such succession. After any retiring Escrow
Agent's resignation or removal, the provisions of this Escrow Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrowed Shares and shall deliver all
shares held by it in the Share Escrow Account to the successor Escrow Agent,
after making copies of such records as the retiring Escrow Agent deems advisable
and after deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys' fees) payable to, incurred by, or
expected to be incurred by the retiring Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder.
14. General.
(a) Governing Law, Assigns. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Georgia
without regard to conflict of law principles and shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(c) Entire Agreement. Except for those provisions of the Merger
Agreement referenced herein, this Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements or understandings, written or
oral, between the parties with respect to the subject matter hereof.
(d) Waivers. No waiver by any party hereto of any condition or of
any breach of any provision of this Escrow Agreement shall be effective unless
in writing. No waiver by any party of any such condition or breach, in any one
instance, shall be deemed to be a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach of any other
provision contained herein.
(e) Amendment. This Agreement may be amended only with the written
consent of the Purchaser, the Escrow Agent and the Company Shareholder.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
PURCHASER
TEKGRAF, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------------
Xxx X. Xxxxxx, President
ACQUISITION SUB:
TEKGRAF SUB II, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx, Chairman
ESCROW AGENT
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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COMPANY:
MARTEC, INC.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
COMPANY SHAREHOLDER:
/s/ Xxxx Xxxxx (SEAL)
----------------------------
Xxxx Xxxxx
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EXHIBIT B
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Company Shareholder Percentage
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Xxxx Xxxxx 100%
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
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