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EXHIBIT 3
AGREEMENT
This ("Agreement") is made and entered into as of December 1, 1999, by
and between XXXXXXX X. XXXXXX ("Xxxxxx") and A. XXXXXX XXXXXXXXX ("Xxxxxxxxx").
WHEREAS, Xxxxxxxxx has, on the date hereof, sold to Xxxxxx the number
of shares of the Class B Common Stock, $.001 par value ("Class B Stock") of
Tekgraf, Inc. (the "Corporation") set forth on Exhibit A hereto (the
"Transferred Shares");
Whereas, Xxxxxxxxx is also the owner of the number of shares of Class
B Stock and of the number of shares of Class A Common Stock, $.001 par value
("Class A Stock") of the Corporation set forth on Exhibit B hereto (the
"Retained Shares") which will be retained by Xxxxxxxxx after the date hereof;
Whereas, management of the Corporation (including Xxxxxx) has proposed
that all outstanding Class B Stock be reclassified into Class A Stock on a
one-to-one basis, which reclassification would be submitted to the shareholders
of the Corporation for their approval (the "Reclassification"). If so
submitted, the Reclassification must be approved by the affirmative vote of a
majority of the votes entitled to be cast by holders of Class A Stock and by
holders of Class B Stock, voting as separate voting groups, as well as the
affirmative vote of a majority of the votes entitled to be cast by holders of
Class A Stock and Class B Stock voting together as a voting group;
Whereas, Xxxxxxxxx acknowledges that Xxxxxx purchased the Transferred
Shares to facilitate the Reclassification and that certain benefits would
accrue to Xxxxxxxxx as regards the Retained Shares were the Reclassification to
occur, and desires to enter into the voting agreements with Xxxxxx set forth
herein and to xxxxx Xxxxxx the irrevocable proxy contemplated hereby;
THEREFORE, in consideration of the benefits accruing to each of the
parties hereto as a result of this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows.
1. Agreement to Vote Shares.
1.1. Agreement To Vote Shares.
(a) At every meeting of the shareholders of the Corporation at
which the Reclassification is submitted for approval, and at
every adjournment thereof, and on every action or approval
by written consent of the shareholders of Corporation with
respect to the Reclassification, Xxxxxxxxx shall cause
Xxxxxxxxx'x Retained Shares to be voted, or such action to
be taken or approval given, in favor of the
Reclassification.
(b) Xxxxxxxxx understands that the Reclassification may be
effected by an amendment to the Corporation's Articles of
Incorporation, or by other corporate actions submitted to
the shareholders for approval, and Xxxxxxxxx acknowledges
that Xxxxxxxxx will cause the Retained
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Shares to be voted in accordance with the preceding subsection
(a) in any way recommended by Xxxxxx as necessary or
appropriate to effect the Reclassification.
(c) Xxxxxxxxx also agrees to vote the Retained Shares against, and
refrain from taking any other action with respect to, any
proposal to any of the shareholders of the Corporation which
if approved could prevent or delay the implementation of the
Recapitalization.
1.2. Additional Securities. Xxxxxxxxx agrees that any securities
that Xxxxxxxxx purchases or receives, or with respect to which
Xxxxxxxxx otherwise acquires ownership (beneficial or otherwise)
after the execution of this Agreement by reason of or on account
of their ownership of the Retained Shares, including any
securities of a corporation that survives a merger with the
Corporation or to which substantially all of the Corporation's
assets are transferred, shall be subject to the terms and
conditions of this Agreement to the same extent as if they
constituted Retained Shares.
2. Irrevocable Proxy. Concurrently with the execution of this Agreement,
Xxxxxxxxx agrees to deliver to Xxxxxx a proxy, substantially in the form
attached hereto as Exhibit C (the "Proxy"), appointing Xxxxxx as an
attorney-in-fact and proxy of Xxxxxxxxx with respect to the Retained Shares,
which Proxy shall be irrevocable to the fullest extent permitted by law. If
the Proxy becomes ineffective for any reason, Xxxxxxxxx shall immediately
execute a substitute proxy that is effective, and during any period that the
Proxy is not in effect, Xxxxxxxxx agrees to attend all meetings of
shareholders, and to vote Xxxxxxxxx'x Retained Shares and take all other
actions as provided in Section 1 hereof. A copy of the executed Proxy shall
be submitted to the Corporation.
3. Agreement to Vote Shares and Proxy Termination. The obligations of Xxxxxxxxx
under Section 1 hereof and the Proxy shall terminate and shall have no
further force or effect as of the earlier to occur of (i) an agreement of
the parties that the same shall terminate, or (ii) December 1, 2000.
4. Representations And Warranties Of Xxxxxxxxx. Xxxxxxxxx represents and
warrants that Xxxxxxxxx (i) was the owner (beneficial or otherwise) of the
Transferred Shares prior to the purchase of the Transferred Shares by
Xxxxxx, and that the Transferred Shares were transferred to Xxxxxx free and
clear of any liens, encumbrances or security interests of any kind; (ii) is
the owner (beneficial or otherwise) of the Retained Shares, which as of the
date hereof are free and clear of any liens, encumbrances or security
interests of any kind; (iii) does not own (beneficially or otherwise) any
shares of capital stock of the Corporation other than the Retained Shares;
and (iv) has absolute and unrestricted power, capacity and authority to
make, enter into and perform the obligations imposed pursuant to the terms
of this Agreement.
5. Representations And Warranties Of Xxxxxx. Xxxxxx represents and warrants
that Xxxxxx (i) purchased the Transferred Shares for his own account for
investment purposes only and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended; and (ii) has
absolute and unrestricted power, capacity and authority to make, enter into
and perform the obligations imposed pursuant to the terms of this Agreement.
6. Additional Documents. Xxxxxxxxx hereby covenants and agrees to execute and
deliver any additional documents necessary to carry out the intent of this
Agreement.
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7. Miscellaneous.
7.1. Severability. If any term, provision, covenant or restriction
of this Agreement or the Proxy is held by a Court of competent
jurisdiction to be invalid, void or unenforceable, then the
remainder of the terms, provisions, covenants and restrictions of
this Agreement and/or the Proxy, as the case may be, shall remain
in full force and effect and shall in no way be affected, impaired
or invalidated.
7.2. Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
permitted assigns, but, except as otherwise specifically provided
herein, neither this Agreement nor any of the rights, interests or
obligations of the parties hereto may be assigned by any party
without the prior written consent of the other parties. Xxxxxxxxx
further agrees not to transfer any Retained Shares now owned or
hereafter acquired by Xxxxxxxxx unless the transferee thereof
agrees in writing to be bound by the terms of this Agreement.
Except as otherwise specifically provided herein, any attempted
assignment of Retained Shares by Xxxxxxxxx without such an
agreement by the intended transferee shall be null and void.
Xxxxxxxxx acknowledges that Xxxxxx has assigned to the Corporation
for collateral purposes his rights under this Agreement and the
Proxy.
7.3. Merger or Sale of Assets. Upon the merger of the Corporation or
the transfer of substantially all of the assets of the Corporation
(the surviving entity of such a merger or the transferee of such
assets, as applicable, being hereinafter referred to as the
"Surviving Entity"), this Agreement shall continue in full force
and effect with respect to the Surviving Entity and all securities
of the Surviving Entity acquired by Xxxxxxxxx. If requested by
Xxxxxx, Xxxxxxxxx will execute a new shareholder voting agreement
and irrevocable proxy with respect to the securities of the
Surviving Entity, although the execution of such an agreement or
proxy shall not be required for this Agreement and the Proxy to
continue in full force and effect.
7.4. Legend. Upon execution of this Agreement, Xxxxxxxxx shall
submit Xxxxxxxxx'x certificates representing the Retained Shares
to the Corporation so that the Corporation may add the following
legend:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
OF, AND RESTRICTIONS ON TRANSFER IMPOSED BY, AN AGREEMENT
DATED AS OF NOVEMBER 30,1999 AND AN IRREVOCABLE PROXY,
CONTAINING AN IRREVOCABLE APPOINTMENT OF A PROXY, OF EVEN
DATE THEREWITH, COPIES OF BOTH OF WHICH ARE ON FILE AT THE
CORPORATION.
Each of the parties hereto hereby authorizes the Corporation to
take such steps as may be necessary to insure that such legend is
added to such certificates, including but not limited to issuing
instructions to that effect to the transfer agent for the Retained
Shares.
7.5. Amendments and Modification. This Agreement may not be amended
or supplemented except in writing by the parties hereto.
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7.6. Specific Performance, Injunctive Relief. The parties hereto
acknowledge that Xxxxxx will be irreparably harmed and that there
will be no adequate remedy at law for a violation of any of the
covenants or agreements of Xxxxxxxxx set forth herein. Therefore,
it is agreed that, in addition to any other remedies that may be
available to Xxxxxx upon any such violation, Xxxxxx shall have the
right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available at
law or in equity.
7.7. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or
delivered (i) five (5) days after deposit in the United States
mail, prepaid, by certified mail, with return receipt requested;
(ii) when delivered personally; (iii) one (1) day after delivery to
a nationally recognized overnight courier; or (iv) when transmitted
by fax with telephone confirmation of receipt if a copy is
concurrently transmitted by U.S. mail or overnight courier as
stated above; in all cases, if applicable, with delivery prepaid
and addressed to the party to be notified to the address set forth
beneath each party's signature below, or to such other address and
fax number of which a party has given notice to the other party as
provided in this Section 9.7.
7.8. Governing Law.
(a) This agreement shall be governed by and construed in
accordance with the laws of the United States of America and
the State of Georgia.
(b) The parties intend for this Agreement to constitute a voting
agreement under Section 14-2-731 of the Georgia Business
Corporation Code.
(c) The parties irrevocably consent to the exclusive jurisdiction
and venue of the courts of any county in the State of Georgia
and the United States District Court for the Northern District
of Georgia, in any judicial proceeding brought to enforce this
Agreement. The parties agree that any forum other than the
State of Georgia is an inconvenient forum and that a lawsuit
(or non-compulsory counterclaim) brought by one party against
another party, in a court of any jurisdiction other than the
State of Georgia should be forthwith dismissed or transferred
to a court located in the State of Georgia.
7.9. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the voting of the securities
referred to herein, and supersedes all prior negotiations and
understandings between the parties with respect to the voting of
the securities referred to herein.
7.10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
7.11. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of
this Agreement.
SIGNATURES
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The parties have executed and delivered this Agreement on the date stated on
the first page.
/s/ A. Xxxxxx Xxxxxxxxx
---------------------------------
A. XXXXXX XXXXXXXXX
00000 Xxx Xxxxxxx Xxx
Xxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
XXXXXXX X. XXXXXX
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
ACKNOWLEDGED as of the date hereof and AGREED that Tekgraf, Inc. hereby
releases, acquits and forever discharges A. Xxxxxx Xxxxxxxxx and his
successors, assigns, agents, and attorneys from any and all claims, of any kind
or nature whatsoever, known or unknown, foreseen or unforeseen, matured or
unmatured, developed or undeveloped, discoverable or undiscoverable, which
exist as of or after the date hereof, based on or arising from the transactions
contemplated hereby (including the Reclassification):
TEKGRAF, INC.
By: /s/ Xxxx Xxxx
-----------------------
Its: CFO
-----------------------
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EXHIBIT A
TRANSFERRED SHARES
Number of Shares Certificate No.
---------------- ---------------
Class A Stock N/A
Class B Stock 36,750
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EXHIBIT B
RETAINED SHARES
Number of Shares Certificate No.
---------------- ---------------
Class A Stock 72,432(1)
Class B Stock 12,250
-------------
(1) Of these shares, 36,216 are subject to that certain Escrow Agreement by and
among Tekgraf, Inc., Tekgraf Sub III, Inc., New England Computer Graphics,
Inc., A. Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, and First Union National Bank, dated as
of May 8, 1998.
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EXHIBIT C
IRREVOCABLE PROXY
The undersigned, being a shareholder of Tekgraf, Inc., a Georgia
corporation (the "Corporation"), hereby irrevocably appoints Xxxxxxx X. Xxxxxx
as his attorney-in-fact and proxy, with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
the shares of capital stock of the Corporation owned (beneficially or
otherwise) by the undersigned, which shares are listed beside the undersigned's
signatures below, and any other securities of the Corporation that the
undersigned currently or hereafter own or control that are then entitled to
vote, including shares or securities of another corporation issued to the
undersigned in connection with a merger of the Corporation or the transfer of
substantially all of the Corporation's assets (all of such shares and other
securities being referred to as the "Retained Shares"), to vote the Retained
Shares for the purposes stated in Section 2 of the Agreement dated as of the
date hereof between the undersigned and Xxxxxxx X. Xxxxxx (the "Voting
Agreement"). Upon the execution hereof, all prior proxies given by the
undersigned with respect to the Retained Shares, and any of them, are hereby
revoked. The undersigned hereby agrees that the undersigned will not give any
subsequent proxies with respect to the Retained Shares without the express
prior written consent of Xxxxxxx X. Xxxxxx.
This proxy is granted pursuant to the Voting Agreement and is granted
in consideration of the benefits accruing to the undersigned from the Voting
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged. This proxy is coupled with an
interest and is irrevocable. The attorney-in-fact and proxy named above will be
empowered to exercise all voting and other rights (including, without
limitation, the power to execute and deliver written consents with respect to
the Retained Shares) at every annual, special or adjourned meeting of the
shareholders of Corporation, and in every written consent in lieu of such a
meeting, or otherwise, for the purposes stated in Section 2 of the Voting
Agreement. This proxy shall terminate and shall have not further force or
effect as of the earlier to occur of (i) an agreement of all the undersigned
that the proxy shall terminate, or (ii) December 1, 2000.
Any obligation of the undersigned hereunder shall be binding upon the
successors, representatives and assigns of the undersigned.
Dated as of: December 1, 1999
Number of Shares Owned (beneficially or /s/
Otherwise): -----------------------------
A. XXXXXX XXXXXXXXX
17513 Sir Galahad Way
Class A Common: 72,432 Xxxxxx, XX 00000
Class B Common: 12,250
ACKNOWLEDGED: /s/
------------ -----------------------------
XXXXXXX X. XXXXXX
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
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