1
EXHIBIT 10.10
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made and entered into as
of this _____ day of __________________, 1997, by and among INDUSTRIAL
DISTRIBUTION GROUP, INC., a Delaware corporation ("IDG"), the individuals
identified on the signature page below (collectively, the "Selling Stockholders"
and individually a "Selling Stockholder"),and _________________________________
("Escrow Agent").
WITNESSETH:
WHEREAS, IDG, ______________ ("Company"), and the Selling Stockholders
entered into that certain Agreement and Plan of Merger dated as of July ___,
1997 (the "Acquisition Agreement"), pursuant to which IDG acquired all of the
issued and outstanding capital stock of the Company, subject to the terms and
conditions set forth in the Acquisition Agreement (capitalized terms used but
not otherwise defined herein shall have the respective meanings ascribed to them
in the Acquisition Agreement);
WHEREAS, pursuant to Section 2.07(b) of the Acquisition Agreement, Company
and the Selling Stockholders agreed to the unconditional and irrevocable
guaranty of the collection of the Guaranteed Receivables in full, as more fully
set forth therein;
WHEREAS, pursuant to Article IX of the Acquisition Agreement, the Selling
Stockholders have indemnified the Seller Indemnified Parties against Seller
Indemnified Losses and Stockholder Indemnified Losses (collectively, the
"Indemnified Losses"); and
WHEREAS, pursuant to Section 2.07(c) of the Acquisition Agreement and in
order to secure their obligations with respect to the collection of the
Guaranteed Receivables and the payment of any Indemnified Losses, the Selling
Stockholders have agreed to deliver, or cause to be delivered, to the Escrow
Agent an aggregate of __________________ shares of the IDG Common Stock
allocated among the Selling Stockholders as set forth on Exhibit "A" attached
hereto and incorporated herein by reference (collectively, the "Escrowed
Shares"), to be administered in accordance with the terms and provisions of this
Escrow Agreement;
NOW THEREFORE, the parties in consideration of the premises and mutual
agreements set forth and contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. Each of IDG and the Selling Stockholders
hereby designates and appoints _____________________, as Escrow Agent for the
purposes set forth herein, and Escrow Agent hereby accepts such appointment.
Escrow Agent agrees to
2
receive deposits of Escrowed Property (as defined below), including, but not
limited to, the Escrowed Shares, and hold and administer the same in accordance
with the terms of this Agreement in the manner so provided for herein.
2. DEPOSIT OF THE ESCROWED SHARES WITH ESCROW AGENT; GRANT OF SECURITY
INTEREST. (a) The Selling Stockholders have delivered to, or caused to be
delivered to, Escrow Agent as security for the obligations of the Selling
Stockholders under Section 2.07(b) and Article IX of the Acquisition Agreement,
and Escrow Agent hereby acknowledges receipt of, the Escrowed Shares, together
with ten (10) duly executed counterpart original blank stock powers with respect
to the Escrowed Shares (collectively with any Other Property (as defined below)
to be received by the Escrow Agent at any time under this Agreement, the
"Escrowed Property").
(b) After the date hereof, each Selling Stockholder shall deliver, or
cause to be delivered (and by their signature below each Selling Stockholder
hereby expressly authorizes IDG to deliver), to Escrow Agent, (i) any shares of
IDG Common Stock to be received, or received, by them in a distribution with
respect to such Escrowed Shares through a stock split, stock dividend,
reclassification, or other recapitalization of IDG, (ii) any securities, cash,
or other property received for such Escrowed Shares (collectively, the "Other
Property") through an exchange in one or more subsequent reorganization,
consolidation, merger, or liquidation of IDG or its successors (or securities
received in a distribution with respect to such securities through a stock
split, stock dividend, or recapitalization), and (iii) any instruments necessary
for Escrow Agent to transfer from time to time any such Escrowed Property,
including, but not limited to, additional blank stock powers executed by the
Selling Stockholders. Any additional securities or Other Property (including any
earnings thereon) delivered to the Escrow Agent pursuant to this provision or
elsewhere in this Escrow Agreement shall be allocated to, and for the benefit
of, the respective Selling Stockholder delivering such additional shares or
Other Property, or for whose benefit such additional shares or Other Property
have been delivered by others.
(c) Each Selling Stockholder hereby grants to IDG, on behalf of and as
agent for all of the Seller Indemnified Parties, a present and continuing
security interest in and security lien upon all of the Escrowed Property,
including, without limitation, the Escrowed Shares, to secure the faithful and
complete performance and satisfaction of any of the obligations of the Selling
Stockholders under Section 2.07(b) and Article IX of the Acquisition Agreement.
For purposes of the attachment and perfection of such security interests in the
Escrowed Property, including, without limitation, the Escrowed Shares, and any
proceeds thereof, Escrow Agent shall be deemed to be a party holding such
property and shares as the designee of IDG pursuant to O.C.G.A. Section Section
11-8-313(1) and 11-8-321, and acting as a bailee with notice pursuant to
O.C.G.A. Section 11-9-305 for the benefit of IDG and the Seller Indemnified
Parties.
3. RIGHTS OF THE SELLING STOCKHOLDERS; INVESTMENT OF FUNDS IN ESCROW. (a)
During the term of this Agreement and for so long as any of the Escrowed
Property is held by the Escrow Agent hereunder, (i) the Escrowed Shares shall
remain registered in the name of the respective Selling Stockholder depositing
such shares into this escrow, (ii) all voting rights with respect to each
Escrowed Share held as Escrowed Property shall be exercised by the record
-2-
3
holder of such Escrowed Shares, and (iii) all cash dividends and other property
(other than shares of IDG Common Stock or other securities required to be
delivered to Escrow Agent and held in escrow in accordance with Section 2(b)
hereunder) distributed with respect to any of the Escrowed Property shall be
distributed to the record holder of such Escrowed Property.
(b) During the Term of this Agreement, and subject to any restrictions set
forth in the Acquisition Agreement or under applicable securities laws, a record
holder of the Escrowed Shares shall be entitled to sell all or any of such
Escrowed Shares in a bona fide private transaction, upon ten (10) business days
prior written notice of such intended sale to Escrow Agent and IDG, provided
that any and all proceeds relating from such sale are made payable to the Escrow
Agent to be deposited directly into escrow hereunder immediately upon completion
of such sale. Escrow Agent shall not be obligated to release such Escrowed
Shares sold until receipt of such proceeds and shall be under no obligation to
determine whether such proposed sale is in compliance with the terms of the
Acquisition Agreement or applicable securities laws. All proceeds received by
Escrow Agent with respect to Escrowed Shares sold hereunder shall be added to
the Escrowed Property and held by Escrow Agent as a part thereof and the
security lien granted in Section 2(c) shall attach thereto. Except as set forth
herein, any sale hereunder shall be effectuated in the manner set forth in the
written notice provided by the record-holder who shall be responsible to pay any
brokerage fees or expenses of sale, if any. Notwithstanding any of the
foregoing, if IDG shall provide written notice to the Escrow Agent within the
prescribed time that it objects to the proposed sale by a record-holder of any
of the Escrowed Shares for any reason, the Escrow Agent shall not effectuate
such proposed sale and shall be absolved of any liability with respect thereto.
(c) Escrow Agent shall manage the Escrowed Property under the terms of
this Agreement and shall from time to time invest and reinvest any cash assets
held in escrow, as and when instructed by IDG and the respective Selling
Stockholder for whose benefit such cash assets have been allocated (but only
with respect to such allocated cash assets), in writing, in (i) obligations of
the United States of America, (ii) general obligations of any state of the
United States of America, (iii) general obligations of any political subdivision
of a state of the United States of America, if such obligations are rated by at
least two recognized rating services as at least "AA," (iv) certificates of
deposit of Escrow Agent and any national bank or banks insured by the Federal
Deposit Insurance Corporation with a net worth in excess of $100,000,000, (v)
obligations of state or municipal public housing authorities chartered by the
United States of America and guaranteed by the United States of America, (vi)
demand interest bearing accounts of Escrow Agent; and (vii) money market funds
of Escrow Agent (the Federated Treasury Obligations Money Market Fund), which
invest in any of the preceding (i) through (vi). If no instructions are received
from IDG and a Selling Stockholder as provided above, Escrow Agent may invest
any cash assets held in escrow in money market funds of the type described in
(vii). Any and all income and interest realized from the investments of any
Escrowed Property made by Escrow Agent pursuant hereto shall be added to, and
become part of, the Escrowed Property allocated, as appropriate, to the
respective Selling Stockholders.
4. RECONCILIATION OF GUARANTEED RECEIVABLES; DISBURSEMENT OF THE ESCROWED
SHARES. (a) Within ten (10) business days after the Receivables Determination
Date, IDG shall
-3-
4
cause to be prepared a reconciliation of collections of the Guaranteed
Receivables, which reconciliation shall set forth the amount of the Guaranteed
Receivables remaining uncollected as of the Receivables Determination Date and
the Claims with respect to which a Claims Notice has been given on or before the
Receivables Determination Date, as described in paragraph (b) below (the
"Receivables Reconciliation"), and shall provide a copy of such reconciliation
to the Escrow Agent and the Selling Stockholders.
(b) (i) From time to time on or before the Escrow Termination Date, IDG or
any Selling Indemnified Party may give notice to the Escrow Agent and the
Selling Stockholders (the "Claims Notice") with respect to a claim for
reimbursement for any of the Guaranteed Receivables remaining uncollected as of
the Receivables Determination Date, or indemnification of a potential
Indemnified Loss by any Seller Indemnified Party that such party may have under
Article IX of the Acquisition Agreement against any or all of the Selling
Stockholders (each individually a "Claim"); provided, however, that in order for
IDG to assert any claim for reimbursement of any Guaranteed Receivables
uncollected as of the Receivables Determination Date, the Claims Notice with
respect thereto must be provided by IDG to the Escrow Agent and the Selling
Stockholders by 5:00 p.m., Eastern Time, on or before the due date thereof, or
such claim shall be deemed to have been waived by IDG and IDG shall be forever
barred from asserting a right to any such reimbursement. Any Claims Notice shall
specifically set forth in reasonable detail (i) the nature of the Claim, (2) the
Selling Stockholders against whom the Claim is being asserted, and (3) the
dollar amount of the Claim (and if such amount is not known, a reasonable
estimate thereof). IDG or any Seller Indemnified Party may make more than one
Claim with respect to any underlying state of facts or against one or more of
the Selling Stockholders. Escrow Agent shall, within five (5) business days
after receipt of the Claims Notice, either (x) notify IDG or the Selling
Indemnified Party who delivered the Claims Notice, as appropriate, that the
Claims Notice failed to include all of the information required (in which case,
such Claims Notice shall be deemed to be defective and of no force or effect, or
(y) notify the Selling Stockholders in writing of its receipt, enclosing a copy
of the same. The failure of Escrow Agent to deliver a copy of the Claims Notice
or provide the notice to the Selling Stockholders required herein, shall not
affect the validity of any Claim of the Seller Indemnified Party set forth in
the Claims Notice. If Escrow Agent has not actually received a Dispute Notice
(as defined in Section 4(b)(ii) below) by 5:00 p.m., Eastern Time, on or before
the date that is fifteen (15) business days after the date Escrow Agent received
the Claims Notice (the "Cut-Off Date"), then the amount of damages set forth in
the Claims Notice shall be deemed established for purposes of this Escrow
Agreement and the Acquisition Agreement against one or more of the Selling
Stockholders, as set forth in the Claims Notice, and Escrow Agent shall
distribute to IDG, for itself or on behalf of the Seller Indemnified Parties,
from the Escrowed Shares or the Escrowed Property, as appropriate, allocated
among the Selling Stockholders as set forth in the Claims Notice, within three
(3) business days immediately following the Cut-Off Date, an aggregate number of
the Escrowed Shares equal to the amount of such Claim (as set forth in the
Claims Notice) divided by the Escrowed Shares Price (as defined in Section 4(c)
below) along with appropriate stock powers, or the cash equal to the amount of
such Claim, as appropriate depending upon the nature of the Escrowed Property
held in escrow as of the date of such required disbursement (for purposes
hereof, Escrow Agent shall first disburse Escrowed Shares
-4-
5
(rounded to the nearest whole share) to the extent such shares are held in
escrow and have not previously been converted into cash or other securities as
permitted in this Escrow Agreement).
(ii) If any of the Selling Stockholders against whom a Claim is being
asserted objects, for itself or on behalf of any other Selling Stockholder, to
all or any portion of such Claim as set forth in the Claims Notice, such Selling
Stockholder must, prior to the Cut-Off Date, actually deliver to Escrow Agent
and to IDG and the other Selling Stockholders written objection to the Claim, or
any portion thereof, certifying in reasonable detail the basis for the objection
(a "Dispute Notice"). The failure by any Selling Stockholder against whom a
Claim is being asserted to timely deliver a Dispute Notice (unless such Dispute
Notice is delivered by a Selling Stockholder for itself and on behalf of another
Selling Stockholder, but only if the Selling Stockholder on whose behalf such
Dispute Notice is being delivered is jointly obligated with the Selling
Stockholder providing such Dispute Notice), in the aforesaid manner and within
the time specified, and objection to only a portion of a Claim, shall constitute
acceptance by the respective Selling Stockholder or Selling Stockholders of the
matters set forth in the Claims Notice, or portion of the Claim not objected to,
and the Selling Stockholder or Selling Stockholders shall be forever barred from
objecting to same in any manner and in any forum. If a Dispute Notice is timely
received by the Escrow Agent objecting with respect to only a portion of the
Claim, the Escrow Agent shall (A) distribute to IDG, on behalf of the Seller
Indemnified Parties, such Escrowed Property, allocated against the Selling
Stockholders as set forth in the Claims Notice, equal in value to the portion of
the Claim not objected to, in the same manner and time frame set forth in
Section 4(b)(i) as if no Dispute Notice had been received, and the parties shall
follow the procedures in Section 4(b)(iii) with respect to the amount of the
Claim set forth in the Dispute Notice as being in dispute (the "Disputed
Amount").
(iii) If the Selling Stockholder or Selling Stockholders who filed one
or more Dispute Notices and IDG or the Seller Indemnified Party, as appropriate,
cannot agree upon a resolution of a dispute between them as it relates to a
Claim (and a Dispute Notice issued in respect thereof was timely received by the
Escrow Agent), within thirty (30) days of the receipt of the relevant Dispute
Notice, then Escrow Agent shall tender an aggregate number of the Escrowed
Shares equal in value to the Disputed Amount, each valued at the Escrowed Shares
Price, or such Other Property in the manner set forth in Section 4(b)(i), into
the registry or custody of any court of competent jurisdiction and initiate
legal proceedings with respect to the Disputed Amount, and thereupon be
discharged from further duties or liabilities with respect to such Disputed
Amount to the extent permitted by applicable law; provided, however, Escrow
Agent shall still be bound by the terms of this Escrow Agreement until its
termination, and if the Seller Indemnified Party is finally determined by such
legal proceeding not to be entitled to the Disputed Amount, such Disputed Amount
shall be tendered to the Escrow Agent to hold pursuant to the terms of this
Escrow Agreement if this Escrow Agreement is still then in effect.
(iv) Notwithstanding anything herein to the contrary, as soon as
reasonably practicable after final resolution of any timely filed Claim for
reimbursement for any of the Guaranteed Receivables remaining uncollected as of
the Receivables Determination Date, Escrow Agent shall distribute to the Selling
Stockholders from the Escrowed Shares or the Other Property, as appropriate,
allocated among the Selling Stockholders as appropriate, such number
-5-
6
of Escrowed Shares or Other Property held in escrow such that, after such
distribution, Escrow Agent does not hold in escrow more than sixty percent (60%)
of the number of Escrowed Shares, or cash equivalent for such Escrowed Shares,
originally deposited by each respective Selling Stockholder hereunder. Escrow
Agent shall be entitled to withhold from such distribution the number of
Escrowed Shares, or the cash equivalent thereof, that Escrow Agent determines in
its sole discretion is reasonably necessary to cover any Claim for which a
Claims Notice had already been received by Escrow Agent before the time of such
proposed distribution and which has not reached its final determination prior to
such distribution. Upon the final determination of such Claim, Escrow Agent
shall, as soon as reasonably practicable thereafter, complete the distribution
as set forth hereinabove.
(c) For purposes of this Escrow Agreement, the Escrowed Share Price shall
mean the greater of the (i) IPO Price and (ii) the average of the closing
prices, as the same shall be certified in writing by IDG to Escrow Agent at
Escrow Agent's request, for shares of the IDG Common Stock (trading symbol:
MROP) on the Nasdaq Stock Market for each of the ten (10) consecutive trading
days immediately preceding the relevant determination date, rounded upwards to
the nearest one-sixteenth of a point if necessary, provided, however, if the IDG
Common Stock shall not be listed on any national exchange or the Nasdaq Stock
Market quotation system, the Escrowed Share Price shall mean the book value per
share as reasonably determined by the Board of Directors of IDG. The calculation
of the Escrowed Share Price as determined by Escrow Agent shall be final and
binding on the parties absent manifest error.
(d) Each Selling Stockholder hereby irrevocably constitutes and appoints
IDG as its attorney-in-fact to transfer the Escrowed Shares so distributed by
the Escrow Agent to IDG, for the benefit of the Seller Indemnified Parties, in
accordance with this Escrow Agreement on the books of the IDG, with full power
of substitution in the premises.
(e) The Escrowed Shares distributed to IDG, on behalf of a Seller
Indemnified Party, shall be accompanied by appropriate stock powers and the
distribution of the Escrowed Shares by Escrow Agent shall be conditioned upon
the IDG's stock transfer agent being instructed to return certificates to Escrow
Agent which represent the balance between the Escrowed Shares evidenced by the
surrendered certificate and deliverable to IDG, on behalf of a Seller
Indemnified Party, pursuant to a Claim and the remaining number of shares
represented by such certificate. Any shares so returned to Escrow Agent shall
be, and continue to be, Escrowed Shares for all purposes of this Escrow
Agreement.
5. TERM. This Escrow Agreement shall terminate when all Escrowed Property
has been distributed by the Escrow Agent in accordance herewith. All Escrowed
Property held by Escrow Agent hereunder on the Escrow Termination Date (as
defined below), shall be distributed to each Selling Stockholder, within five
(5) business days after the Escrow Termination Date, in accordance with his or
her respective ownership of the Escrowed Shares, less the number of Escrowed
Shares or, if appropriate, an amount of the Escrowed Property equal in value (as
determined in accordance with Section 4(b)(i) above) to any pending claim or
claims for an Indemnified Loss for which IDG or any Selling Indemnified Party
has asserted that one or more of the Selling Stockholders are liable for in
accordance with Section 4(b)(i) above. As used
-6-
7
herein, the "Escrow Termination Date" shall be the date that ends immediately
prior to the second anniversary of the date of this Escrow Agreement.
6. COMPENSATION OF ESCROW AGENT. IDG and the Selling Stockholders agree
to pay to Escrow Agent from time to time reasonable compensation for all
services rendered by Escrow Agent under this Agreement in accordance with
Exhibit "B" attached hereto, and related expenses and disbursements. The fee due
Escrow Agent for the first year of this Escrow Agreement shall be due and
payable at the time the Escrowed Shares are placed in Escrow. IDG and the
Selling Stockholders shall share in equally in the payment of the fees and
expenses of the Escrow Agent hereunder (with the Selling Stockholders sharing
their portion of such fees and expenses pro rata among themselves based upon the
number of Escrowed Shares placed into this escrow by each Selling Stockholder);
provided, however, if Escrow Agent incurs any fees or expenses that can be
specifically identified to a claim of IDG or any Seller Indemnified Party
against one or more Selling Stockholders for a Stockholder Indemnified Loss,
then such specifically identified fees and expenses shall be allocated solely to
such Selling Stockholder or Selling Stockholders.
7. DUTIES OF THE ESCROW AGENT. (a) The duties and responsibilities of
Escrow Agent hereunder shall be limited to those expressly set forth in this
Escrow Agreement, and Escrow Agent shall not be bound in any way by any other
contract or agreement between IDG and the Selling Stockholders, whether or not
Escrow Agent has knowledge of any such contract or agreement or terms or
conditions thereof.
(b) Escrow Agent shall not be liable to anyone for any damages, losses, or
expenses incurred as a result of any act or omission of Escrow Agent, unless
such damages, losses, or expenses are caused by Escrow Agent's willful
misconduct or gross negligence. Accordingly, Escrow Agent shall not incur any
such liability with respect to (i) any action taken or omitted in reliance upon
any instrument, including any written notice or instruction provided for herein,
not only as to its due execution by an authorized person and as to the validity
and effectiveness of such instrument, but also as to the truth and accuracy of
any information contained therein that Escrow Agent shall in good faith believe
to be genuine, to have been signed by a proper person or persons, and to conform
to the provisions of this Escrow Agreement, and (ii) any action taken or omitted
in reliance upon the advice of counsel (which may be of Escrow Agent's own
choosing).
(c) IDG and each Selling Stockholder hereby jointly and severally agree to
indemnify and hold harmless Escrow Agent to the fullest extent permitted by law
from and against any and all losses, claims, damages, expenses (including
reasonable fees and disbursements of counsel), actions, proceedings, or
investigations (whether formal or informal), or threats thereof (all of the
foregoing being hereinafter referred to as "Liabilities"), based upon, relating
to, or arising out of, the provision of services hereunder; provided, however,
that no party hereunder shall be liable under this Section 7(c) for any amount
paid in settlement of claims without their consent, which consent shall not be
unreasonably withheld, or to the extent that a court of competent jurisdiction
finally judicially determines that such Liabilities resulted from the willful
misconduct or gross negligence of Escrow Agent.
-7-
8
(d) If a dispute between any of the parties hereto sufficient in the
discretion of Escrow Agent to justify its doing so shall occur, Escrow Agent
shall be entitled to tender the Escrowed Shares, or any other Escrowed Property
then in its possession, into the registry or custody of any court of competent
jurisdiction, to initiate such legal proceedings as it deems appropriate, and
thereupon to be discharged from all further duties and liabilities under this
Escrow Agreement. Any such legal action may be brought in any such court as
Escrow Agent shall determine to have jurisdiction over the Escrowed Shares and
Escrowed Property. The filing of any such legal proceedings shall not deprive
Escrow Agent of its compensation earned prior to such filing.
(e) If all or any part of the Escrowed Shares or Escrowed Property shall
be attached, garnished, or levied upon pursuant to any court order, or the
delivery thereof shall be stayed or enjoined by a court order, or any other
order, judgment, or decree shall be made or entered by any court affecting the
Escrowed Shares or the Escrowed Property, or any part thereof, or any act of
Escrow Agent, Escrow Agent is hereby expressly authorized to obey and comply
with all final writs, orders, judgments, or decrees so entered or issued by any
court, without the necessity of inquiring whether such court has jurisdiction,
and if Escrow Agent obeys or complies with any such writ, order, judgment, or
decree, it shall not be liable to any of the parties hereto or to any other
person by reason of such compliance.
(f) If at any time any attempt should be made to amend this Escrow
Agreement in a manner that would increase the duties and responsibilities of
Escrow Agent, or in any manner that Escrow Agent shall reasonably deem
undesirable, or at any other time, Escrow Agent may resign by notifying the
other parties hereto by certified mail in accordance with Section 8 below. From
the date upon which such notice is received by the IDG and the Selling
Stockholders until the earlier of (i) the acceptance by a successor escrow agent
as shall be appointed (A) by an agreement of such parties, or (B) if the parties
are unable to agree within twenty (20) days following the last party to receive
such notice, by the senior active Judge of the United States District Court for
the Northern District of Georgia, Atlanta Division, upon application by IDG or
the Selling Stockholders, and (ii) thirty (30) days following the date upon
which notice was mailed, Escrow Agent's sole obligation hereunder shall be to
perform its duties hereunder in accordance with the terms of this Escrow
Agreement prior to any attempted amendment hereof.
8. NOTICES. All notices or other communications required or permitted to
be given or made hereunder shall be in writing and delivered personally or sent
by pre-paid, first class, certified or registered air mail, or by facsimile
transmission (with an original sent by first class mail) to the intended
recipient thereof at its address or facsimile number specified below. Any such
notice or communication shall be deemed to have been duly given immediately if
given in person or made by confirmed facsimile, or if mailed, three business
days after such mailing, and in proving same it shall be sufficient to show that
the envelope containing the same was duly addressed, stamped and posted. The
addresses and facsimile numbers of the parties for purposes of this Escrow
Agreement are:
-8-
9
(a) If to IDG: Industrial Distribution Group, Inc.
0000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn.: Chief Executive Officer
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: W. Xxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) If to the Selling Stockholders: Addressed or sent to each Selling
Stockholder as set forth under their
respective names on the signature
page hereto
(c) If to the Escrow Agent:
Any party may change the address or facsimile number to which notices or other
communications to such party shall be delivered or mailed by giving written
notice thereof to the other parties hereto in the manner provided herein.
9. COUNTERPARTS. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
10. GOVERNING LAW. This Escrow Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Georgia
(without regard to its conflicts of law rules).
11. SEVERABILITY. Whenever possible, each provision of this Escrow
Agreement shall be interpreted in such manner as to be effective and valid under
Georgia law, but if any provision shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective to
-9-
10
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Escrow Agreement.
12. ENTIRE AGREEMENT; BINDING EFFECT. Except for the Acquisition
Agreement, this Escrow Agreement contains the sole and entire agreement among
the parties hereto with respect to the subject matter hereof and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
13. MODIFICATION. Subject to Section 7(f) above, this Escrow Agreement may
not be revoked, rescinded, amended or terminated except upon the mutual written
consent of all of the parties hereto.
14. WAIVER. Any term or condition of this Escrow Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but only if
such waiver is evidenced by a writing signed by such party. No failure on the
part of any party hereto to exercise, and no delay in exercising, any right,
power, or remedy created hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or remedy by any such party
preclude any other or further exercise thereof or the exercise of any other
right, power, or remedy. No waiver by any party hereto of any breach of or
default in any term or condition of this Escrow Agreement shall constitute a
waiver of or assent to any succeeding breach of or default in the same or any
other term or condition hereof.
15. EFFECT OF CAPTIONS AND HEADINGS. The captions and headings contained
herein are for convenience only, do not constitute a part of this Escrow
Agreement, and shall not be used in construing it.
[Remainder of Page Intentionally Left Blank]
-10-
11
IN WITNESS WHEREOF, this Escrow Agreement has been executed by the parties
hereto as of the day and year first above written.
INDUSTRIAL DISTRIBUTION
GROUP, INC., A DELAWARE CORPORATION
BY:
------------------------------------
NAME:
-------------------------------
TITLE:
------------------------------
ESCROW AGENT
BY:
------------------------------------
NAME:
-------------------------------
TITLE:
------------------------------
SELLING STOCKHOLDERS
---------------------------------------
NAME:
ADDRESS:
-------------------------------
-------------------------------
-------------------------------
FACSIMILE NO.:
-------------------------
---------------------------------------
NAME:
ADDRESS:
-------------------------------
-------------------------------
-------------------------------
FACSIMILE NO.:
-------------------------
-11-
12
---------------------------------------
NAME:
ADDRESS:
-------------------------------
-------------------------------
-------------------------------
FACSIMILE NO.:
-------------------------
---------------------------------------
NAME:
ADDRESS:
-------------------------------
-------------------------------
-------------------------------
FACSIMILE NO.:
-------------------------
-12-
