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EXHIBIT 5
AGREEMENT
This ("Agreement") is made and entered into as of December 1, 1999, by
and between XXXXXXX X. XXXXXX ("Xxxxxx") and XXXXXX X. XXXXXX ("Xxxxxx").
WHEREAS, Xxxxxx has, on the date hereof, sold to Xxxxxx the number of
shares of the Class A Common Stock, $.001 par value ("Class A Stock") of
Tekgraf, Inc. (the "Corporation") and of the Class B Common Stock, $.001 par
value ("Class B Stock") of the Corporation set forth on Exhibit A hereto (the
"Transferred Shares"), at a per share selling price of $2.10;
Whereas, Xxxxxx is also the owner of the number of shares of Class A
Stock and Class B Stock set forth on Exhibit B hereto (the "Delayed Shares");
Whereas, Xxxxxx would have transferred the Delayed Shares to Xxxxxx on
the date hereof however the Delayed Shares are subject to certain escrow
arrangements under a Pledge, Security and Escrow Agreement dated June 2, 1997
(the "Escrow"), between Xxxxxx and the Corporation;
Whereas, Xxxxxx desires that Xxxxxx purchase beneficial ownership of
the Delayed Shares upon the terms and conditions set forth herein with actual
transfer of the certificates therefor to occur upon such Delayed Shares being
released from the Escrow pursuant to the terms thereof;
Whereas, Xxxxxx is also the owner of the number of shares of Class A
Stock and Class B Stock set forth on Exhibit C hereto (such shares, together
with the Delayed Shares, are herein called the "Retained Shares") which will be
retained by Xxxxxx after the date hereof,
Whereas, Xxxxxx acknowledges that it is a condition precedent to
Xxxxxx'x purchase of the Transferred Shares was Xxxxxx'x entering into the
voting agreements with Xxxxxx set forth herein and to granting 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. Delayed Purchase.
1.1 Purchase of Delayed Shares. Xxxxxx hereby agrees to purchase and Xxxxxx
agrees to sell the Delayed Shares at a price of $2.75 per share (such
amount to be appropriately adjusted in the event of any future stock
split, stock combination, stock dividend, or similar event) for a total
purchase price of $152,900 (the "Delayed Purchase"). It is understood
that the purchase price will be appropriately adjusted in the event
that less than all of the Delayed Shares are released from the Escrow.
As a down payment, Xxxxxx has, on the date hereof, paid to Xxxxxx $.50
per Delayed Share, for a total nonrefundable installment payment of $
27,800 (which is to be credited against the purchase price).
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1.2 Completion of Purchase. At any time within 60 days of written
notification from Xxxxxx or the Corporation that the Delayed Shares have been
released from the Escrow, Xxxxxx shall give Xxxxxx written notice of the date
(the "Closing") for the completion of the purchase of the Delayed Shares, which
date must be reasonably satisfactory to Xxxxxx.
1.3 Payment and Delivery of Certificate(s). In connection with the
Closing, (a) Xxxxxx will pay the aggregate purchase price for the Delayed
Shares to Xxxxxx by delivery of a certified or bank cashier's check payable to
the order of Xxxxxx (less the $.50/share down payment), and (b) Xxxxxx will
deliver to Xxxxxx, free and clear of any encumbrance whatsoever, a certificate
or certificates representing the Delayed Shares as well as a properly executed
blank stock power therefor.
1.4 Failure to Close. Should the Delayed Shares not be released from
Escrow by December 1, 2000, or should they be released from Escrow prior to
such date but Xxxxxx fails to timely deliver the notice to complete the
purchase of the Delayed Shares as set forth in Section 1.2 above, then the
purchase of the Delayed Shares shall be cancelled and of no further force or
effect, Xxxxxx shall retain the Delayed Shares and the $.50/share down payment,
and Xxxxxx will have no liability or obligation to Xxxxxx relative to the
Delayed Shares or for his (Xxxxxx'x) election to not cause the completion of
the transfer of the Delayed Shares.
2. Agreement to Vote Shares.
2.1 Agreement To Vote Shares.
(a) At every meeting of the shareholders of the Corporation
and at every adjournment thereof, and on every action or approval by written
consent of the shareholders of Corporation, Xxxxxx shall cause Xxxxxx'x
Retained Shares to be voted, or such action to be taken or approval given, in
favor of every matter recommended by the Corporation's Board of Directors
(including any amendment to the Corporation's Articles of Incorporation).
(b) Xxxxxx 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 any recommendation of the Corporation's Board of
Directors.
2.2 Additional Securities. Xxxxxx agrees that any securities that
Xxxxxx purchases or receives, or with respect to which Xxxxxx 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.
3. Irrevocable Proxy. Concurrently with the execution of this Agreement, Xxxxxx
agrees to deliver to Xxxxxx a proxy, substantially in the form attached hereto
as Exhibit D (the "Proxy"), appointing Xxxxxx as an attorney-in-fact and proxy
of Xxxxxx 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, Xxxxxx shall immediately execute a substitute proxy that is
effective, and during any period that the Proxy is not in effect, Xxxxxx agrees
to attend all meetings of shareholders, and to vote
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Xxxxxx'x Retained Shares and take all other actions as provided in Section 2
hereof. A copy of the executed Proxy shall be submitted to the Corporation.
4. Agreement to Vote Shares and Proxy Termination. The obligations of
Xxxxxx under Section 2 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.
5. Representations and Warranties of Xxxxxx. Xxxxxx represents and
warrants (which representations and warranties survive closing) that Xxxxxx (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, and, the Delayed Shares if transferred to Xxxxxx,
will be transferred free and clear of any liens, encumbrances or security
interests of any kind; (ii) is the owner (beneficial or otherwise) of the
Delayed Shares and the Retained Shares, which as of the date hereof are free
and clear of any liens, encumbrances or security interests of any kind (other
than the Escrow); (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.
6. Representations and Warranties of Xxxxxx. Xxxxxx represents and warrants
(which representations and warranties survive closing) 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; (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.
7. Releases By Xxxxxx and Xxxxxx. Other than the representations set forth
in Section 6, Xxxxxx hereby releases, acquits and forever discharges Xxxxxx and
the Corporation, and each of the Corporation's parents, subsidiaries,
affiliates, successors, assigns, shareholders, directors, officers, employees,
agents, representatives 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 (other than a failure of Xxxxxx to pay for
the Delayed Shares), based on or arising from the Transferred Shares, the
Delayed Purchase, the Delayed Shares, the Retained Shares, the voting
agreements set forth herein, the Proxy or Xxxxxx'x ownership of any of the
Corporation's securities; provided, however, notwithstanding the foregoing,
Xxxxxx is not releasing any person or party as to (i) any right of
indemnification for claims made by third parties that Xxxxxx may have under
Georgia law, the Corporation's Articles of Incorporation or Bylaws, or pursuant
to that certain Indemnification Agreement dated July 19, 1999 between the
Corporation and Xxxxxx, to the extent resulting from Xxxxxx'x current or former
capacities as an employee, officer, director, agent or fiduciary of the
Corporation or its predecessor corporations, or (ii) any claims against the
Corporation that exist as of the date hereof, but are unknown to Xxxxxx, or
that arise after the date hereof, based on a transaction where shares of any
class of the Corporation then held by Xxxxxx are treated differently by the
Corporation in such transaction than shares of that same class then held by all
other shareholders of the Corporation. Other than the representations set forth
in Section 5, Xxxxxx hereby releases, acquits and forever discharges Xxxxxx and
Xxxxxx'x 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
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date hereof (other than a failure by Xxxxxx to deliver the Delayed Shares as
required hereunder), based on or arising from the Transferred Shares, the
Delayed Purchase, the Delayed Shares, the Retained Shares, the voting
agreements set forth herein or the Proxy.
8. Additional Documents. Xxxxxx hereby covenants and agrees to execute
and deliver any additional documents necessary to carry out the intent of this
Agreement.
9. Miscellaneous.
9.1 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.
9.2 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 neither this
Agreement nor any of the rights, interests or obligations of Xxxxxx may be
assigned by Xxxxxx without the prior written consent of Xxxxxx (it being
understood that Xxxxxx may in his discretion assign any and all of his rights,
interests and/or obligations under this Agreement). Xxxxxx further agrees not
to transfer any Retained Shares now owned or hereafter acquired by Xxxxxx
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 Xxxxxx without such an agreement by the
intended transferee shall be null and void.
9.3 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 Xxxxxx. If
requested by Xxxxxx, Xxxxxx will execute a new shareholder voting agreement and
irrevocable proxy with respect to the securities of the Surviving Entity (as
prepared by Xxxxxx on substantially the same terms and for the same purposes as
this Agreement), 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.
9.4 Legend. Upon execution of this Agreement, Xxxxxx shall submit
Xxxxxx'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.
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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.
9.5 Amendments and Modification. This Agreement may not be amended
or supplemented except in writing by the parties hereto.
9.6 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
Xxxxxx 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.
9.7 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.
9.8 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 noncompulsory 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.
9.9 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.
9.10 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.
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9.11 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
SIGNATURES
The parties have executed and delivered this Agreement on the date stated on
the first page.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
XXXXXX X. XXXXXX
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
XXXXXXX X. XXXXXX
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
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EXHIBIT A
TRANSFERRED SHARES
Certificate No. Number of Shares
--------------- ----------------
Class A Stock 41,955
Class B Stock 189,045
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EXHIBIT B
DELAYED SHARES
Certificate No. Number of Shares
-------------- ----------------
Class A Stock NONE
Class B Stock 55,600
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EXHIBIT C
RETAINED SHARES*
Certificate No. Number of Shares
-------------- ----------------
Class A Stock NONE
Class B Stock 69,500
* Includes Delayed Shares
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EXHIBIT D
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): ---------------------------------
XXXXXX X. XXXXXX
0000 Xxxxxxx Xxxxxx
Class A Common: N/A Xxxxxxx, XX 00000
Class B Common: 69,500
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ACKNOWLEDGED: /s/
---------------------------------
XXXXXXX X. XXXXXX
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
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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/ Xxxxxx X. Xxxxxx
otherwise): --------------------------
XXXXXX X. XXXXXX
0000 Xxxxxxx Xxxxxx
Class A Common: N/A Xxxxxxx, XX 00000
Class B Common: 69,500
ACKNOWLEDGED: /s/ Xxxxxxx X. Xxxxxx
------------ ---------------------------
XXXXXXX X. XXXXXX
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, XX 00000
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