Exhibit "99"
ESCROW AGREEMENT
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THIS AGREEMENT (the "Escrow Agreement") is made as of the 1st day of
November, 1995, by and among ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, both
individual residents of the State of Georgia (collectively, the "Shareholders"),
GRAPHIC INDUSTRIES, INC., a Georgia corporation ("Graphic"), QUADRAS ACQUISITION
COMPANY, a Georgia corporation and wholly-owned subsidiary of Graphic
("Quadras"), and NATIONSBANK OF GEORGIA, N.A., as Escrow Agent ("Escrow Agent").
Graphic, Quadras, the Shareholders and QQQ, Inc., a Georgia corporation
("QQQ") have entered into that certain Agreement and Plan of Reorganization of
even date (the "Agreement"), pursuant to which QQQ will be merged into and with
Quadras (the "Merger") and the Shareholders will receive, in exchange for their
stock in QQQ, certain shares of the Common Stock, $.10 par value, of Graphic
("Graphic Common Stock"), of which, a certain number are to be issued and held
in escrow as provided for in the Agreement and herein.
The Merger is to become effective upon the filing of Articles of Merger
with the Secretary of State of Georgia, which filing will be made on or about
the date hereof. The date of such filing shall be the "Effective Date" for
purposes of this Escrow Agreement.
Escrow Agent has agreed to serve in such capacity in accordance with the
terms and conditions hereof.
Any capitalized terms used in this Escrow Agreement and not defined herein
shall not be binding upon the Escrow Agent.
THEREFORE, in consideration of the mutual promises and covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows.
1. Deposit of Escrow Shares.
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(a) On the Effective Date, Graphic shall cause to be issued to and
deposited with Escrow Agent, a total of 30,661 shares of Graphic Common Stock
(the "Escrow Shares") in connection with the Merger. The number of Escrow
Shares shall equal, rounded to the nearest whole number of shares, ten percent
(10%) of the total
number of shares of Graphic Common Stock to be issued in connection with the
Merger. The Escrow Shares shall be issued in the name of Escrow Agent or in
such nominee name as Escrow Agent may elect, all for the benefit of the parties
to this Agreement, and the Escrow Shares shall be held by Escrow Agent pursuant
to the terms and conditions hereof, and not disposed of or disbursed except in
accordance with the terms and conditions of this Agreement.
(b) The term "Escrow Shares" shall also include any dividends, other
distributions or proceeds thereof and all interest or income earned on such
dividends or proceeds relating to the Escrow Shares, and any additional shares
of Graphic Common Stock delivered to Escrow Agent due to an increase in the
number of shares of Graphic Common Stock to be issued in the Merger in
accordance with the Agreement.
2. Escrow Shares. Upon receipt of the Escrow Shares, Escrow Agent shall
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hold the Escrow Shares and invest any such proceeds, interest and dividends as
set forth herein. The Escrow Shares and the proceeds thereof, including
interest and dividends, shall be held intact and delivered to Graphic or the
Shareholders or both, pursuant to the terms hereof. Escrow Agent shall make no
distributions of any Escrow Shares except in strict compliance with the terms
and conditions of this Agreement.
3. No Dispositions. During the term of this Agreement no party shall be
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entitled to, and Escrow Agent shall not, sell, assign, hypothecate, encumber or
otherwise dispose of any of the Escrow Shares.
4. Voting Rights. During the term of this Agreement, and pending any
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distribution of any of the Escrow Shares to Graphic as herein provided, the
Escrow Agent shall vote the Escrow Shares in accordance with the instructions
given, which must be unanimous, by the Shareholders; provided, however, that if
the Escrow Agent does not receive such instructions on or before five (5) days
prior to any shareholder meeting date, the Escrow Agent shall not be required to
vote the Escrow Shares. Escrow Agent shall execute proxies or other voting
instruments so as to follow the voting instructions given by the Shareholders.
5. Term. The term of this Escrow Agreement shall be six (6) months from
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the Effective Date or until there are no Escrow Shares held pursuant hereto,
whichever occurs sooner (the "Term") , unless the term hereof is extended by the
mutual written consent of the
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parties hereto or unless there shall be Claims, as defined below, pending at the
original termination date, in which event, the Term shall automatically be
extended until all such Claims that arose and were made known in writing to the
Shareholders within six (6) months from the Effective Date are resolved.
Notwithstanding the foregoing, the indemnification to Escrow Agent set forth in
Section 9 hereof shall survive the termination of this Escrow Agreement or the
resignation of Escrow Agent.
6. Releases from Escrow.
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(a) The Escrow Shares, or the appropriate portion thereof, shall be
returned to Graphic in accordance with the procedures set forth herein and upon
the occurrence of any of the following events: (i) any reductions in the
consideration to be paid the Shareholders as set forth in Section 2.10 of the
Agreement; (ii) any and all claims for indemnification by Graphic pursuant to
the Agreement; (iii) in the event any accounts or notes receivable of QQQ shown
on the Closing Balance Sheet (as defined in the Agreement and net of any bad
debt reserves set forth on such Closing Balance Sheet) remain uncollected for
more than 120 days after the date of such Closing Balance Sheet; or (iv) any
breach(es) has or have occurred by the Shareholders in their respective
employment agreements with Quadras after the Closing Date. All of the foregoing
matters are hereinafter referred to collectively as "Claims" or individually as
a "Claim."
(b) Upon the occurrence of a Claim, Graphic shall deliver written
notice thereof to Escrow Agent and the Shareholders, which notice shall set
forth the nature and amount of the Claim and the number of Escrow Shares, plus
cash, which equals the amount of each Claim. If the Shareholders do not notify
Escrow Agent of their objection to a Claim, in writing, within fifteen (15) days
after receipt of such written notice, Escrow Agent shall forthwith charge the
Escrow Shares with the full amount of such Claim, remit the applicable Escrow
Shares directly to Graphic and give written notice of such action to the
Shareholders. During the Term, Escrow Agent shall be authorized to rely solely
upon said written notice from Graphic, and in accordance with such written
notice shall charge the Escrow Shares for the amount specified in such written
notice if it receives no timely written objection from the Shareholders.
(c) In the event any Shareholder shall inform Escrow Agent that there
is any dispute between Graphic and the
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Shareholders with respect to any Claim, such dispute shall be resolved as
provided for in the Agreement, to-wit: (i) if such Claim relates to any
adjustments made in the Closing Balance Sheet (as defined in the Agreement),
such dispute shall be resolved in the manner set forth in Section 2.10(b) of the
Agreement; and (ii) if such Claim relates to any matter for which Graphic claims
the right to indemnification under the Agreement (other than for uncollected
accounts or notes receivable as set forth above and in Section 2.10(c) of the
Agreement), or for breach of the employment agreements, such dispute shall be
resolved in the manner set forth in Section 9.5 of the Agreement. Upon
resolution of any such disputes as herein provided, Escrow Agent shall
distribute the Escrow Shares in accordance with such resolution. If the amount
in dispute does not represent the full value of the Escrow Shares (determined as
of the Closing Date in accordance with the Agreement), Escrow Agent shall
distribute to Graphic such number of Escrow Shares (rounded to the nearest whole
number of such shares) as may be in excess of the amount in dispute.
(d) If the amount of Claims asserted by Graphic by the end of the Escrow
Period does not equal the value of the Escrow Shares (at the then current market
value of Graphic Common Stock), then the Escrow Agent shall distribute to the
Shareholders that number of Escrow Shares that are in excess of the amount of
Claims then pending.
(e) Upon the expiration of the Term (including any extensions), if all the
Escrow Shares have not been returned to Graphic in accordance with the foregoing
provisions of this Section 6, Escrow Agent shall deliver the remaining Escrow
Shares to the Shareholders based upon the percentages set forth on Exhibit "A"
attached hereto. If the calculation for distribution purposes results in an odd
number of Escrow Shares, the Escrow Agent shall be authorized to sell one Escrow
Share at the market so that the final distribution shall be equal between the
Shareholders. Graphic agrees to take such action as shall be necessary to assist
Escrow Agent in reissuing the Escrow Shares, if any, in the names of the
Shareholders at the end of the Term.
(f) Nothing contained in this Agreement shall require the Escrow Agent to
make any calculation or determination with respect to the number of Escrow
Shares to be held or distributed (except with respect to the final distribution
as set forth in subparagraph (e) above), and all such calculations shall be the
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responsibility of the parties hereto other than the Escrow Agent.
7. Investment of Escrow Funds. Escrow Agent shall hold the Escrow Shares
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delivered to it under the terms of this Escrow Agreement, and to invest any
income or dividends thereon held by it hereunder in a mutual fund which invests
solely in U.S. Government securities.
8. Agreement of Escrow Agent. Escrow Agent shall be responsible only for
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the safekeeping and the investment of the Escrow Shares and the disbursements or
delivery thereof in accordance with the terms of this Escrow Agreement. Escrow
Agent shall not be responsible for the appropriateness, sufficiency or accuracy
of information contained in any written notice given to Escrow Agent.
9. Performance of Escrow Agent.
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(a) In performing its duties under this Escrow Agreement, or upon the
claimed failure to perform its duties hereunder, Escrow Agent shall not be
liable to anyone for any damages, losses, or expenses which they may incur as a
result of Escrow Agent so acting, or failing to act; provided, however, Escrow
Agent shall be liable for damages arising out of its willful default or gross
negligence under this Agreement. Accordingly, Escrow Agent shall not incur any
such liability with respect to: (i) any action taken or omitted to be taken in
good faith upon advice of its counsel or counsel for any other party hereto
given with respect to any questions relating to the duties and responsibilities
of Escrow Agent hereunder; or (ii) to any action taken or omitted to be taken in
reliance upon any document, including any written notice or instructions
provided for in this Escrow Agreement, not only as to its due execution and to
the validity and effectiveness of its provisions 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 proper person
or persons and to conform with the provisions of this Escrow Agreement.
(b) Graphic, Quadras and the Shareholders agree to indemnify and hold
harmless Escrow Agent (each party being one-half responsible) against any and
all losses, claims, damages, liabilities and expenses, including without
limitation, reasonable costs of investigation and reasonable counsel fees and
disbursements which may be imposed by Escrow Agent or incurred by
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it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of the duties hereunder, including, without
limitation any litigation arising from this Escrow Agreement or involving the
subject matter hereof; except, that if Escrow Agent shall be found guilty of
willful default or gross negligence under this Agreement, then, in that event,
Escrow Agent shall bear all such losses, claims, damages and expenses.
(c) In the event of a dispute between any of the parties hereto
sufficient in the discretion of Escrow Agent to justify its doing so, Escrow
Agent shall be entitled to tender into the registry or custody of any court or
arbitrator of competent jurisdiction all money or property in its hands under
the terms of this Agreement, and may commence such legal proceedings as it deems
appropriate, and thereupon to be discharged from all further duties under this
Agreement. Any such legal action may be brought in any such court as Escrow
Agent shall determine to have jurisdiction thereof. The filing of any such legal
proceedings shall not deprive Escrow Agent of its compensation earned prior to
such filing.
10. Fees of Escrow Agent. For its ordinary services hereunder (which
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shall include receipt, investment and disbursement of the Escrow Shares in the
manner described herein), Escrow Agent shall receive compensation in accordance
with the Schedule of Fees set forth on Exhibit "B" attached hereto. Graphic and
the Stockholders, as a group, shall each pay one-half of such fees.
11. Resignation of Escrow Agent. Escrow Agent or any successor may resign
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its position hereunder by giving ten (10) business days written notice to the
parties hereto, and such resignation shall take effect at the end of such ten
(10) business days, provided the Escrow Shares have been tendered into the
registry or custody of any court of competent jurisdiction or upon the earlier
appointment of, and delivery of the Escrow Shares to, a successor. From and
after the effective date of such resignation or appointment of a successor,
Escrow Agent shall not be obligated to perform any of the duties of Escrow Agent
hereunder and will not be liable for any nonperformance thereof nor for any act
or failure to act whatsoever on the part of any successor Escrow Agent.
12. Successor to Escrow Agent. Any corporation resulting from any merger
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or consolidation to which Escrow Agent or any successor to it shall be a party,
or any corporation in any manner succeeding to all or substantially all of the
business of Escrow
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Agent or any successor, provided such corporation shall be a banking
corporation, with trust powers, organized under the laws of the United States of
America or of the State of Georgia, shall be the successor escrow agent
hereunder without the execution or filing of any paper or any further acts on
the part of any of the parties hereto.
13. Instructions and Notices. In executing and performing its duties
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hereunder, Escrow Agent shall be entitled to rely upon instructions of Graphic
and the Shareholders. Any notice, payment, demand, instruction or communication
required or permitted to be given by this Escrow Agreement shall be in writing
and shall be given by hand delivery, overnight messenger, by facsimile, or
certified mail, return receipt requested, addressed to the appropriate party at
the address stated below:
If to Graphic or Quadras:
Graphic Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇, President
telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Gold, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Gold, Esq.
telecopy: ▇▇▇-▇▇▇-▇▇▇▇
If to the Shareholders:
▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
telecopy: telecopy:
With a copy to:
▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esquire
telecopy: 404-262-1222
If to Escrow Agent:
NationsBank of Georgia, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice-President
telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Any notice sent by facsimile, overnight messenger or hand delivery shall be
deemed made on the date received, and any notice sent by certified mail shall be
deemed made three (3) days after mailing.
14. Governing Law. This Escrow Agreement shall be governed by and
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construed in accordance with the laws of the State of Georgia.
15. Headings. The headings in this Escrow Agreement are inserted for
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convenience and identification only and are in no way intended to interpret,
define or limit the scope, extent or intent of this Escrow Agreement or any
provision hereof.
16. Severability. Each provision of this Escrow Agreement is
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intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such illegality or invalidity shall not affect the
validity or enforcement of the remainder of this Escrow Agreement.
17. Counterparts. This Escrow Agreement, and any amendment hereto, may be
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executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
18. Amendment. No modification or amendment to this Escrow
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Agreement shall be valid unless produced in writing and signed by all of the
parties hereto.
19. Successors. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legatees, assigns and
transferees, as the case may be. Escrow Agent shall not be bound by or incur any
liability with respect to the Agreement or any other agreement or understanding
between Graphic and the Shareholders, except as herein expressly provided.
Escrow Agent shall not have any duties hereunder except those specifically set
forth herein.
20. Taxes. The Shareholders shall indemnify Graphic for any tax liability
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relating to the income (other than from dividends) earned on the Escrow Shares
which will be reported for tax purposes by Graphic, based upon the portion of
Escrow Shares distributed to each party and such indemnification may be
withdrawn from the income (other than from dividends) earned. Escrow Agent
shall cause the Form 1099-Div to be issued to the Shareholders for the dividends
paid on the Escrow Shares during the term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed under seal as of the date first above written by the respective
officers thereunder duly authorized.
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▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (SEAL)
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▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM THE PREVIOUS PAGE]
GRAPHIC INDUSTRIES, INC.
By: ▇▇▇▇ ▇. ▇▇▇▇
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Its:
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[Corporate Seal]
QUADRAS, INC.
By: ▇▇▇▇ ▇. ▇▇▇▇
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Its:
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[Corporate Seal]
ESCROW AGENT:
NATIONSBANK OF GEORGIA, N.A.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Its: VICE PRESIDENT
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EXHIBIT "A"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 50%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 50%
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