EXHIBIT 2
ESCROW AGREEMENT
ESCROW AGREEMENT made as of this 19 day of September,
1996, by and between SHARED RESOURCE EXCHANGE, INC., a Delaware
corporation ("SRX"), SRX OF FLORIDA, INC., a Delaware corporation
("SRX FLORIDA"), TELTRONICS, INC., a Delaware corporation
("Teltronics")(SRX Florida and Teltronics are sometimes
collectively referred to as "Buyer"), and XXXXX XXXXX XXXXXXX
MANAGEMENT COMPANY ("Xxxxx Xxxxx"), as Escrow Agent.
WITNESSETH
WHEREAS, SRX, Teltronics and SRX Florida have entered
into an Agreement of Sale of even date herewith ("Agreement of
Sale"), pursuant to which SRX sold to SRX Florida substantially
all the assets of SRX, and SRX Florida assumed certain Assumed
Liabilities (as defined in the Agreement of Sale) of SRX; and
WHEREAS, SRX, Teltronics and SRX Florida have entered
into a Payment of Allowed Claims Agreement, of even date herewith
("Allowed Claims Agreement"), pursuant to which SRX Florida and
Teltronics have agreed to provide to SRX up to $120,000 to fund
the payment of certain Allowed Claims (as defined in the Allowed
Claims Agreement); and
WHEREAS, Section 9 of the Agreement of Sale provides
for the indemnification by SRX of SRX Florida, as provided in
Sections 9(a)(i) through and including 9(a)(vii) thereof; and
WHEREAS, the Allowed Claims Agreement provides for the
reimbursement by SRX of any amounts funded by SRX Florida or
Teltronics under the Allowed Claims Agreement; and
WHEREAS, to facilitate (i) the indemnification by SRX
of SRX Florida under Section 9 of the Agreement of Sale and (ii)
the reimbursement by SRX of SRX Florida or Teltronics for any
amounts funded under the Allowed Claims Agreement which have not
been reimbursed by SRX in cash, SRX has agreed to deliver to the
Escrow Agent 120,000 shares of the Teltronics common stock issued
to SRX in connection with the Agreement of Sale ("Teltronics
Stock"), to be held by the Escrow Agent in escrow, subject to the
terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. APPOINTMENT OF ESCROW AGENT. SRX, Teltronics and
SRX Florida hereby appoint Xxxxx Xxxxx as escrow agent (the
"Escrow Agent") and Xxxxx Xxxxx accepts such appointment.
2. DELIVERY OF SHARES. Upon closing of the
transactions contemplated by the Agreement of Sale, SRX shall
deliver to the Escrow Agent 120,000 shares of the shares of
Teltronics voting common stock received by SRX at such closing
from Teltronics, 100,000 of which shall be held by the Escrow
Agent to provide funds for the payment of any indemnification
liability of SRX under the Agreement of Sale (the
"Indemnification Shares") and 20,000 of which shall be held by
the Escrow Agent to provide funds for the reimbursement of any
Allowed Claims paid by Buyer under the Allowed Claims Agreement
(the "Allowed Claims Shares"). The Escrow Agent shall retain
custody of the Indemnification Shares and Allowed Claims Shares
for purposes of implementing the provisions of this Agreement.
3. SUBMISSION OF INDEMNIFICATION CLAIMS. On or
before December 15, 1997, Buyer shall submit to SRX a notice
("Final Notice of Claim") setting forth the details of all claims
of Buyer or Buyer's Indemnified Persons (as defined in the
Agreement of Sale) for indemnification by SRX under Section 9(a)
of the Agreement of Sale ("Final Notice of Claim") which may not
thereafter be modified or amended by Buyer of Buyer's Indemnified
Persons (as defined in the Agreement of Sale) without the consent
of SRX, except as set forth below. SRX shall have 30 days after
receipt of such Final Notice of Claim to review the details
thereof and dispute any or all of the claims or claim amounts set
forth therein. If SRX disputes the claims or claim amounts for
indemnification set forth by the Buyer and Buyer's Indemnified
Persons in the Final Notice of Claim, and the Buyer and SRX
cannot within ten days after SRX notifies the Buyer of its
disagreement with such amount claimed, reach agreement with
respect to the amount claimed, then the Buyer and SRX agree that
the Final Notice of Claim shall be submitted to an arbitrator in
Dallas, Texas in accordance with the rules of the American
Arbitration Association, as then in effect. The decision of the
arbitrator as to the validity of the claims and the amount for
which SRX is liable under the terms of the Agreement of Sale
shall be final and binding on all parties. If SRX agrees with
the claims or claim amounts made by the Buyer and Buyer's
Indemnified Persons set forth in the Final Notice of Claim, or
upon the decision of the arbitrator, as the case may be, SRX
shall thereupon, at its option, (i) pay such amount due Buyer and
Buyer's Indemnified Persons in cash in accordance with the terms
of the Agreement of Sale; or (ii) such amount shall be paid by
Escrow Agent from the Indemnification Shares held by the Escrow
Agent with the Indemnification Shares being valued at $6 per
share for the purposes hereof. After the payment of the amount
of all undisputed claims and claims allowed by the arbitrator,
either in cash or from the Indemnification Shares, the Escrow
Agent shall release to SRX any remaining Indemnification Shares
then held by the Escrow Agent.
4. ALLOWED CLAIMS REIMBURSEMENT. Until the earlier
of (i) such time as Buyer has no further obligation to pay Claims
(as defined in the Allowed Claims Agreement) and SRX has
reimbursed Buyer for all such Claims paid by Buyer under the
Allowed Claims Agreement, either in cash of in Allowed Claims
Shares, or (ii) such time as the Maximum Payment Amount (as
defined in the Allowed Claims Agreement) has been reimbursed to
Buyer in cash and/or Allowed Claims Shares, pursuant to Section 4
of the Allowed Claims Agreement, the Escrow Agent shall retain
the Allowed Claims Shares and disburse such shares only to Buyer
upon the written instruction of SRX to do so in accordance with
the terms of, and in satisfaction of any reimbursement amount due
Buyer from SRX under, the Allowed Claims Agreement, which written
instruction shall indicate the number of such Allowed Claims
Shares to be so disbursed. Upon the earlier of (i) such time as
Buyer has no further obligation to pay Claims (as defined in the
Allowed Claims Agreement) and SRX has reimbursed Buyer for all
such Claims paid by Buyer under the Allowed Claims Agreement,
either in cash of in Allowed Claims Shares, or (ii) such time as
the Maximum Payment Amount (as defined in the Allowed Claims
Agreement) has been reimbursed to Buyer, the Escrow Agent shall
release to SRX any remaining Allowed Claims Shares then held by
the Escrow Agent.
5. RIGHTS, DUTIES AND RESPONSIBILITIES OF ESCROW
AGENT.
(a) The parties hereto understand and agree that
the duties of the Escrow Agent hereunder are purely
ministerial in nature.
(b) The Escrow Agent shall not be responsible for
or required to enforce any of the terms or conditions
of any agreement between any of the parties hereto.
The Escrow Agent shall not be responsible for the
performance by any of the parties hereto of their
respective obligations under the Agreement of Sale or
the Allowed Claims Agreement.
(c) The Escrow Agent shall be entitled to rely
upon the accuracy, act in reliance upon the contents
and assume the genuineness of any notice, instruction,
certificate, signature, instrument or other document
which is given to the Escrow Agent pursuant to this
Agreement without the necessity of the Escrow Agent
verifying the truth or accuracy thereof. The Escrow
Agent shall not be obligated to make any inquiry as to
the authority, capacity, existence or identity of any
person purporting to give any such notice or
instructions or to execute any such certificate,
instrument or other document.
(d) If the Escrow Agent is uncertain as to its
duties or rights hereunder or shall receive
instructions which, in its sole determination, are in
conflict either with other instructions received by it
or with any provision of this Agreement, it shall be
entitled, at its sole election, to: continue to hold
the Indemnification Shares and Allowed Claims Shares
pending the resolution of such uncertainty to its sole
satisfaction, by final judgment of a court or
otherwise; or deposit the Indemnification Shares and
Allowed Claims Shares, or a portion thereof, with a
court of competent jurisdiction and seek resolution of
such uncertainty in a proceeding in which all parties
in interest are joined. Upon the deposit by the Escrow
Agent of the Indemnification Shares and Allowed Claims
Shares with such court of competent jurisdiction, the
Escrow Agent shall be relieved of all further
obligations and released from all liability hereunder
with respect thereto.
(e) The Escrow Agent shall not be liable for any
action taken or omitted, for the misconduct of any of
its employees or agents or any attorney appointed by it
or for any loss, liability, claim, damage, cost or
expense, except in the case of willful misconduct or
gross negligence on the part of the Escrow Agent. The
Escrow Agent shall be entitled to consult with counsel
of its own choosing and shall not be liable for any
action taken, suffered or omitted by it in accordance
with the advice of such counsel.
(f) The Escrow Agent shall have no responsibility
at any time to ascertain whether or not any security
interest exists in the Indemnification Shares or the
Allowed Claims Shares, or any part thereof, or to file
any financing statement under the Uniform Commercial
Code with respect to such shares, or any part thereof.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
XXXXX XXXXX XXXXXXX MANAGEMENT COMPANY
By: Xxx X. Xxxxxxx
President
SHARED RESOURCE EXCHANGE, INC.
By: Xxxxxx X. Xxxxxxxx
President
SRX OF FLORIDA, INC.
By: Xxxx Xxxxxxx
President
TELTRONICS, INC.
By: Xxxx Xxxxxxx
President
