ESCROW AGREEMENT
This Agreement is entered into as of this 6th day of April, 2000, by
and among Amherst Computer Products Southwest, LP, a Texas limited partnership
("Amherst Southwest"), Allstar Systems, Inc., a Delaware corporation
("Allstar"), and Compass Bank, a bank organized under the laws of the State of
Alabama, as escrow agent (the "Escrow Agent").
RECITALS
A. Pursuant to that certain Asset Purchase Agreement (the "Purchase
Agreement") dated as of March 16, 2000, among Amherst Southwest, Allstar and
Amherst Technologies, L.L.C., as amended by Amendment No. 1 to Asset Purchase
Agreement, Amherst Southwest is acquiring certain assets of Allstar's CP
Division and El Paso IT Business. Capitalized terms used in this Agreement,
unless otherwise defined, shall have the meanings ascribed to them in the
Purchase Agreement.
B. The execution and delivery of this Escrow Agreement is required by
Amendment No. 1 to Asset Purchase Agreement, which requires Amherst Southwest to
deposit the sum of Five Hundred Thousand Dollars ($500,000) (the "Escrow Fund")
with the Escrow Agent pursuant to the terms of the Purchase Agreement and this
Escrow Agreement.
NOW THEREFORE, in consideration of the promises and covenants set forth
below, the parties hereto agree as follows:
1. Appointment; Delivery of Escrow Fund at Closing. Upon the terms and
subject to the conditions of this Escrow Agreement and the Voting Agreement,
Amherst Southwest and Allstar hereby appoint the Escrow Agent to act as escrow
agent with respect to the Escrow Fund (which shall include any earnings
thereon), and the Escrow Agent hereby accepts such appointment and agrees to
hold and deliver the Escrow Fund in accordance with the terms and provisions
hereof. The Escrow Fund shall be held by the Escrow Agent in a separate account
for the benefit of Amherst Southwest and Allstar as provided in this Escrow
Agreement.
2. Disbursement of Escrow Fund. The Escrow Agent shall disburse the Escrow
Fund in accordance with (1) the joint written instructions of Allstar and
Amherst Southwest, or (2) the terms of any arbitration or Court order obtained
pursuant to Section 3 hereof. Allstar and Amherst Southwest acknowledge their
respective obligations to provide joint written instructions for the
disbursement of the Escrow Fund pursuant to the terms of the Purchase Agreement.
3. Resolution of Disputed Claims.
(a) All disputes arising out of or relating to (i) this Agreement or any
notice or instrument delivered pursuant to the terms hereof, or the transactions
contemplated hereby, or (ii) the validity, interpretation, breach, or violation
or termination hereof (including disputes arising under this Section 3 (each a
"Dispute"), shall be finally and solely determined and settled by a nationally
recognized certified public accounting firm selected by mutual agreement of the
Parties, which firm is not rendering (and during the preceding two-year period,
has not rendered) services to any of the parties or their respective Affiliates
(the "Arbitrating Accountant"). In connection with the resolution of any Dispute
hereunder, the Arbitrating Accountant shall have access to all documents,
records, work papers, facilities and personnel necessary to perform its function
as arbitrator. The award of the Arbitrating Accountant shall be (1) the sole and
exclusive remedy of the parties, (2) enforceable in any court of competent
jurisdiction and (3) final and binding (absent manifest error) on the parties
hereto. Amherst Southwest, on the one hand, and Allstar, on the other hand,
shall each pay one-half of the fees and expenses of the Arbitrating Accountant
with respect to any Dispute.
(b) In the event that Allstar and Amherst Southwest are unable to mutually
agree on the Arbitrating Accountant within thirty (30) days, the Dispute shall
be finally and solely determined and settled by arbitration in Houston, Texas in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and this Section 3. Such arbitration shall be conducted by a single
arbitrator, whom Allstar and Amherst Southwest shall request to be experienced
in legal, financial and accounting matters. In any such arbitration proceedings,
the arbitrator shall adopt and apply the provisions of the Federal Rules of
Civil Procedure relating to discovery so that each party shall allow and may
obtain discovery of any matter not privileged which is relevant to the subject
matter involved in the arbitration to the same extent as if such arbitration
were a civil action pending in a United States District Court for the Southern
District of Texas. The arbitrator may proceed to an award notwithstanding the
failure of any party to participate in such proceedings. The prevailing party in
the arbitration proceeding shall be entitled to an award of reasonable
attorneys' fees incurred in connection with the arbitration in such amount as
may be determined by the arbitrator. The award of the arbitrator shall be (i)
the sole and exclusive remedy of the parties, (ii) enforceable in any court of
competent jurisdiction and (iii) final and binding (absent manifest error) on
the parties hereto.
4. Inspection of Escrow Records. At any time during the Escrow Agent's regular
business hours, Amherst Southwest or Allstar may inspect the Escrow Agent's
records insofar as they relate to the Escrow Fund, to determine whether the
Escrow Agent is complying with the provisions of this Escrow Agreement. Within
30 days of the end of each calendar quarter during the period in which the
Escrow Fund is held by Escrow Agent, the Escrow Agent shall send quarterly
statements to Amherst Southwest and Allstar detailing any earnings on the Escrow
Fund for such calendar quarter and for all periods since the deposit of the
Escrow Fund with the Escrow Agent.
5. Investment of Escrow Fund. The Escrow Agent shall invest and reinvest the
Escrow Fund and any earnings thereon in the Expedition Investor Services Shares,
unless otherwise instructed in writing by Amherst Southwest and Allstar.
6. Resignation of Escrow Agent. Notwithstanding any other provisions of this
Escrow Agreement, the Escrow Agent may resign as Escrow Agent at any time by
notifying the parties hereto, and until a successor escrow agent is appointed by
Amherst Southwest and Allstar and accepts such appointment, the Escrow Agent's
only duty shall be to hold the funds in accordance with the terms of this
Agreement. If an instrument of acceptance by a successor escrow agent shall not
have been delivered to the Escrow Agent within thirty (30) days after the giving
of such notice of resignation, the Escrow Agent may, notwithstanding the
provisions of Section 3, and at the expense of Amherst Southwest and Allstar,
petition any court of competent jurisdiction for the appointment of a successor
escrow agent.
7. Liability of Escrow Agent; Advice of Counsel; Indemnification.
(a) The Escrow Agent shall be obligated to perform only the duties
described in this Escrow Agreement. The Escrow Agent may rely on any instrument
or signature believed by it to be genuine and to have been signed or presented
by the proper party or parties duly authorized to do so. The Escrow Agent shall
not be liable for any action taken or omitted by it in good faith and believed
by it to be authorized, nor for any action taken or omitted by it in accordance
with advice of counsel, and shall not be liable for any mistake of fact or error
of judgment or for any acts or omissions of any kind unless caused by its
willful misconduct or gross negligence.
(b) The Escrow Agent shall be entitled to consult with competent and
responsible counsel of its choice with respect to the interpretation of the
provisions hereof, and any other legal matters relating thereto, and be fully
protected in taking any action or omitting to take any action in good faith in
accordance with the advice of such counsel.
(c) Amherst Southwest and Allstar agree to hold the Escrow Agent harmless
and indemnify the Escrow Agent against any loss, liability, expense (including
reasonable attorneys' fees and expenses), claim or demand arising out of or in
connection with the performance of its obligations in accordance with the
provisions of this Agreement, except for gross negligence or willful misconduct
of the Escrow Agent. The foregoing indemnities in this Section 7 shall survive
the resignation of the Escrow Agent or the termination of this Escrow Agreement.
8. Escrow Agent's Fee. The Escrow Agent shall be entitled to compensation for
its services at an annual fee equal to $5000.00, payable as mutually agreed by
the parties. The fee agreed upon for services rendered hereunder is intended as
full compensation for the Escrow Agent's services as contemplated by this Escrow
Agreement and shall be borne equally by Allstar and Amherst Southwest. Should
litigation or arbitral proceedings be instituted by or against any of the
parties hereto requiring additional duties of the Escrow Agent, or appearance in
court or before an arbitrator, the Escrow Agent shall be reimbursed in equal
shares by Allstar and Amherst Southwest for its services and for its reasonable
expenses incurred therein.
9. Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two Business
Days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Allstar:
Allstar Systems, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: 000-000-0000
If to Amherst Southwest:
Amherst Computer Products Southwest, LP
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
With a copy to:
Xxxxxxx X. Xxxxxx
X'Xxxxxx & Xxxxxx LLC
000 X. Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
If to the Escrow Agent:
Compass Bank
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxx
Facsimile: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, request, demands, claims, and other
communications hereunder are to be delivered by the other Parties notice in the
manner herein set forth.
10. Termination. The Escrow Agent's duties pursuant to this Escrow Agreement
shall be terminated upon the full and final release of the Escrow Fund and all
earnings thereon in accordance with the provisions of this Escrow Agreement, and
thereupon this Escrow Agreement shall expire and be of no further force or
effect (except to the extent any provisions hereof expressly survive such
termination).
11. Modifications and Waivers. Any change, amendment, supplement, modification
or waiver of any provision of this Escrow Agreement shall be valid and binding
only if it is in writing and signed by the parties hereto. No waiver of any
breach, term or condition of this Escrow Agreement by any party shall constitute
a subsequent waiver of the same or any other breach, term or condition.
12. Payments. All disbursements made by the Escrow Agent pursuant to this
Escrow Agreement shall be made by wire transfer of immediately available funds
to accounts designated in writing by the party entitled to such funds.
13. Counterparts. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Severability. If any provisions of this Escrow Agreement or the application
of such provision to any person or circumstance shall be held invalid by a court
or arbitrator of competent jurisdiction, then the remainder of this Escrow
Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid by such court or arbitrator, shall
not be affected thereby so long as the parties' manifest intent under this
Escrow Agreement is not defeated.
15. Governing Law; Binding Effect. This Escrow Agreement shall be interpreted,
and the rights and liabilities of the parties hereto determined, in accordance
with the laws of the State of Delaware without regard to conflicts of law
principles. This Escrow Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.
16. Waiver of Offset Rights. The Escrow Agent hereby waives any and all rights
to offset that it may have against the Escrow Fund including, without
limitation, claims arising as a result of any claims, amounts, liabilities,
costs, expenses, damage or other losses that the Escrow Agent may be otherwise
entitled to collect from any party to this Escrow Agreement.
17. Time is of the Essence. Time is of the essence in the performance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as
of the date first written above.
AMHERST COMPUTER PRODUCTS ALLSTAR SYSTEMS, INC.
SOUTHWEST, LP
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxx
Its: CFO Its: President/CEO
COMPASS BANK
By: /s/ G. Xxx Xxxxxxx
Its: Vice President
