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EXHIBIT 2.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of June 29, 1999 (including the
exhibits and schedules attached hereto, this "AGREEMENT"), is by and among
Towne Services, Inc., a Georgia corporation (the "PARENT"), Dan Paul and Allen
Merrill, each in their capacity as a Stockholder Representative (collectively,
the "STOCKHOLDERS' REPRESENTATIVES") and First Union National Bank, a National
Banking Association (the "ESCROW AGENT").
W I T N E S S E T H :
WHEREAS, the Parent, Forseon Corporation, a Delaware corporation (the
"COMPANY") and certain of the stockholders of Company (the "MANAGEMENT
STOCKHOLDERS") have entered into an Agreement and Plan of Merger, dated as of
March 25, 1999 (including the exhibits, annexes, schedules, amendments and
attachments thereto, the "MERGER AGREEMENT"), pursuant to which the Parent has
agreed to acquire all of the capital stock of Company through the merger of TSI
Acquisition One, Inc., a Georgia corporation and wholly-owned subsidiary of
Parent, with and into Company; and
WHEREAS, it is contemplated under the Merger Agreement that the Parent
will deposit or cause to be deposited into escrow a certificate representing
ten percent (10%) of the Parent Common Stock to be issued in connection with
the Merger (the "ESCROW SHARES") to be held and disbursed by the Escrow Agent
in accordance with this Agreement; and
WHEREAS, pursuant to the terms of the Merger Agreement the Escrow
Shares are to be held by the Escrow Agent to satisfy any obligation of Company
and the Company Stockholders to indemnify Parent and the Parent Indemnified
Parties under the terms of the Merger Agreement; and
WHEREAS, the Parent and the Company desire to appoint the Escrow Agent
as escrow agent for the purpose of receiving, holding and distributing the
Escrow Fund (as defined below), and the Escrow Agent is willing to act as the
Escrow Agent subject to and in accordance with the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, and intending to be legally bound hereby, the parties hereby
agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall have
the meanings provided in the Merger Agreement. As used in this
Agreement, the following terms shall have the following meanings:
(a) "Distribution Date" shall mean that date which is one year
from the Effective Time of the Merger.
(b) "Value Per Share" shall mean the fair market value of a share
of Parent Common Stock at the Effective Time of the Merger.
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2. Appointment and Agreement of Escrow Agent. The Parent and the
Stockholders' Representatives (on behalf of themselves and all Company
Stockholders) hereby appoint the Escrow Agent to serve as, and the
Escrow Agent hereby agrees to act as, escrow agent upon the terms and
conditions of this Agreement.
3. Establishment of the Escrow Fund.
(a) Pursuant to Section 2.1(d) of the Merger Agreement, the
Parent shall deliver the Escrow Shares to the Escrow Agent on
the date hereof. The Escrow Agent shall hold the Escrow
Shares and any and all substitutions and replacements
thereof, all dividends, shares and other amounts issued with
respect thereto or earned thereon, and all cash and non-cash
proceeds from any sale or other disposition thereof, if any
(the "ESCROW FUND"), in escrow pursuant to this Agreement.
(b) Each of the Parent and the Stockholders' Representatives
confirms to the Escrow Agent and to each other that the
Escrow Fund is free and clear of all Liens except as may be
created or disclosed by this Agreement and the Merger
Agreement.
(c) The Escrow Agent acknowledges receipt of the Escrow Shares
and agrees to hold and disburse the Escrow Shares for the
benefit of Parent and the Company Stockholders, as the case
may be, in accordance with the provisions of this Agreement.
The portion of the Escrow Shares initially allocated to each
Company Stockholder is indicated on Exhibit A attached
hereto. Exhibit A shall be revised from time to time pursuant
to changes to the Escrow Fund made pursuant to Section 6 and
pursuant to distributions made in accordance with Section 4
below. The parties shall cooperate with Escrow Agent and
deliver to Escrow Agent such confirmations, certificates,
affirmations, information and other documents as Escrow Agent
shall reasonably request in the performance of its
obligations under this Agreement, including any and all such
items as Escrow Agent shall deem necessary to evidence
termination of this Agreement and to evidence the parties'
consent to the final distribution of the Escrow Fund in
accordance with the terms of this Agreement.
(d) The parties shall cooperate with each other to insure the
proper and timely disbursement of the Escrow Fund in
accordance with the terms of this Agreement.
4. Distributions from the Escrow Fund. The Escrow Agent shall make
distributions of the Escrow Fund in accordance with the following:
(a) Pursuant to the procedures set forth in this Agreement and
the Merger Agreement, the Escrow Agent shall distribute to
Parent, a number of Escrow Shares equal to the dollar amount
sought by Parent or any Parent Indemnified Parties divided by
the Value Per Share in respect of all Indemnifiable Damages
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which may be owed to Parent or any other Parent Indemnified
Parties, as the case may be, as indicated on a Notice of
Claim submitted by Parent or any other Parent Indemnified
Parties in accordance with this Agreement, that arise out of
or result from any of the events listed in Sections 10.1(a),
(b) or (c) of the Merger Agreement. Claims under Notices of
Claims which are the subject of an objection by the
Stockholder Representatives shall be governed by Article 10
of the Merger Agreement and Section 4(g) hereof.
(b) In no event shall the actual damages chargeable by Parent or
any other Parent Indemnified Party for claims considered
"general contingencies" under a "pooling of interests" exceed
the product of (i) ten percent (10%) of the Value Per Share
multiplied by (ii) the number of shares of Parent Common
Stock issued as Merger Consideration. All "general
contingencies" shall be settled and resolved no later than
(i) the date of the first audit of financial statements
containing combined operations for those items that would be
expected to be encountered in the audit process, or (ii) one
year after the Effective Time for other items. All "specific
contingencies" shall be resolved as promptly as practicable;
however, the parties acknowledge that some specific
contingencies may not be resolved until after one year from
the Effective Time. In such event, a Notice of Claim shall be
submitted by Parent to the Escrow Agent (with a copy sent to
the Stockholders' Representatives) with respect to any
unresolved specific contingencies and the requisite number of
Escrow Shares (as provided in paragraph (e) below) shall be
held back in escrow beyond the Distribution Date until such
claims are resolved. Any such distribution shall be made 30
days after receipt by the Escrow Agent of such Notice of
Claims if the Escrow Agent does not receive a written
objection to such distribution from the Stockholder
Representatives within 30 days after receipt by the Escrow
Agent of such Notice of Claims. Claims under Notices of
Claims which are the subject of an objection by the
Stockholder Representatives shall be governed by Article 10
of the Merger Agreement and Section 4(g) hereof.
(c) The Escrow Agent shall distribute to the appropriate party in
accordance with a written disbursement notice signed by both
Parent and the Stockholder Representatives and delivered to
the Escrow Agent.
(d) The Escrow Agent shall distribute to Parent, a number of
Escrow Shares equal to the dollar amount awarded to Parent in
response to a Notice of Claim divided by the Value Per Share,
if such Notice of Claim is accompanied by and in accordance
with a final arbitration award or judgment of a court of
competent jurisdiction against the Company in favor of Parent
or the Parent Indemnified Parties.
(e) The Escrow Agent shall distribute to the Company Stockholders
on the Distribution Date, the Escrow Shares remaining
following any distributions under a., b., c. or d. above, if
any, less a number of Escrow Shares equal to the
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quotient of the dollar amount of all pending and disputed
claims under all Notices of Claims divided by the Value Per
Share.
(f) Escrow Shares left following the Distribution Date shall be
distributed in accordance with a., b., c. and d. above, or to
the Company Stockholders upon delivery by a Stockholder
Representative of a request for distribution of the remaining
shares accompanied by a final arbitration award or judgment
of a court of competent jurisdiction dismissing all pending
and disputed claims.
(g) No later than 290 days subsequent to the Effective Time,
Parent shall deliver to the Stockholder Representatives a
list of all Indemnifiable Damages remaining subject to this
Agreement, and the total damages relating to each item (the
"CLAIMS SCHEDULE"). If the Stockholder Representatives
dispute the correctness of the Claims Schedule, they, acting
together, shall notify Parent of their objections within ten
(10) business days after delivery of the Claims Schedule and
shall set forth in reasonable detail in such notice the
reason for the Stockholder Representatives' objections. If
the Stockholder Representatives fail to deliver such notice
within such time period, the Company and the Company
Stockholders shall be deemed to have accepted Parent's
calculation of the Specified Liabilities and other items set
forth on the Claims Schedule. If the Stockholder
Representatives deliver such notice, Parent and the
Stockholder Representatives shall endeavor in good faith to
resolve their dispute concerning the Claims Schedule within
fifteen (15) business days after the receipt by Parent of
such notice. If they are unable to do so within such
15-business-day period, the dispute shall be submitted to an
audit partner experienced in the technology-based retail
inventory tracking and analysis industry of an independent
nationally-recognized accounting firm in the United States as
shall be mutually acceptable to Parent, on the one hand, and
the Stockholder Representatives, on the other hand (an
"INDEPENDENT ACCOUNTING FIRM"), whom the parties initially
designate to be PriceWaterhouseCoopers, LLP, who shall act as
an expert and not as an arbitrator, and who shall resolve the
dispute within 30 days of the submission of such dispute, or
if no such Independent Accounting Firm is available to a
mutually agreed neutral arbitrator (the "ARBITRATOR"). The
decision of the Independent Accounting Firm or the
Arbitrator, as the case may be, as to the Claims Schedule
shall be final and binding upon Parent and the Company
Stockholders. The expense of the Independent Accounting Firm
or the Arbitrator, as the case may be, shall be borne in
proportion to the difference between the final determined
amount of the Independent Accounting Firm or the Arbitrator,
as the case may be, and such amounts proposed by Parent, on
the one hand, and the Stockholder Representatives acting for
the Company Stockholders on the other hand. The Stockholder
Representatives and Parent shall cooperate with the other
party in the determination of the Claims Schedule, including
without limitation, allowing the Stockholder Representatives
access after the Effective Time to the books and records of
the Surviving Corporation and to the accounting and other
representatives and advisors of the Surviving
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Corporation and its books and records for the purposes of
making such determination. Within three business days
following final determination of the Claims Schedule, the
Escrow Agent shall return to Parent that portion of the
Escrow Fund, valued at the Value Per Share, of Parent Common
Stock equal to the total Indemnifiable Damages listed on the
Claims Schedule and/or deliver the remaining portion of the
Escrow Fund to the Company Stockholders hereunder in
accordance with the written instructions of the Stockholders'
Representatives.
(h) If any certificate representing shares of Parent Common Stock
is to be made in a name other than that in which the
certificate theretofore surrendered for exchange is
registered, it shall be a condition of such exchange that the
certificate so surrendered be properly endorsed or otherwise
in proper form for transfer and that the person requesting
such transfer either pay to Parent any transfer or other
Taxes required by reason of the transfer to a person other
than the registered holder of the certificate surrendered or
establish to the satisfaction of Parent that such Tax has
been paid or is not payable.
(i) If the Merger Agreement is terminated, the Stockholders'
Representatives and the Parent shall notify the Escrow Agent
in writing to such effect, and the Escrow Agent shall,
immediately after its receipt of such notice, return all
contents of the Escrow Fund to Parent.
5. Suspension of Performance; Disbursement Into Court. If at any time
there shall exist any dispute among the Parent, Parent Indemnified
Parties, the Company, any of the Company Stockholders, and the Escrow
Agent, or between any of them, with respect to the holding or
disposition of any portion of the Escrow Shares or any other
obligations of the Escrow Agent under this Agreement, or if at any
time the Escrow Agent is unable to determine, to the Escrow Agent's
sole satisfaction, the proper disposition of any portion of the Escrow
Shares or the Escrow Agent's proper actions with respect to his
obligations under this Agreement, or if Parent and the Stockholder
Representatives have not within 30 days of the furnishing by the
Escrow Agent of a notice of resignation, appointed a successor escrow
agent to act under this Agreement, then the Escrow Agent may, in its
sole discretion:
(a) suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this
Agreement until such dispute or uncertainty shall be resolved
to the sole satisfaction of the Escrow Agent or until a
successor escrow agent shall have been appointed (as the case
may be); provided, however, that the Escrow Agent shall
continue to maintain the Escrow Fund and hold the
certificates for the Escrow Shares; and/or
(b) petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in
any venue convenient to the Escrow Agent, for instructions
with respect to such dispute or uncertainty, and to the
extent required by law, deliver to such court, for holding
and disposition in
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accordance with the instructions of such court, the
certificates for the Escrow Shares.
The Escrow Agent shall have no liability to the Parent, Parent
Indemnified Parties, Company, any of the Company Stockholders or any
other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or
claimed liability that may arise, or be alleged to have arisen, out of
or as a result of any delay in the disbursement of the Escrow Shares
or any delay in or with respect to any other action required or
requested of the Escrow Agent.
6. Dividends; Voting and Other Rights. Prior to disbursement from
the Escrow Fund, any and all cash dividends or other cash or non-cash
income or proceeds with respect to the Escrow Shares shall be paid
into and become part of the Escrow Fund and shall be disbursed in
accordance with Section 4 hereof in the same manner as the Escrow
Shares to which such dividends, income or proceeds relates. Each
Company Stockholder shall have the right to direct the Escrow Agent in
writing as to the exercise of voting rights with respect to his or her
Escrow Shares, and the Escrow Agent shall comply with any such
directions if received in a timely manner. In the absence of such
directions, the Escrow Agent shall not vote any Escrow Shares.
7. Investments.
(a) Subject to restrictions on transfer imposed by "pooling of
interests" and applicable law, the cash portion, if any, of
the Escrow Fund shall be invested and reinvested by the
Escrow Agent in Permitted Investments (as defined below) as
directed by the Stockholder Representatives. In giving such
instructions, the Stockholder Representatives shall undertake
in good faith to direct the making of Permitted Investments
that mature or are subject to redemption on or prior to the
date or dates on which the Stockholder Representatives
reasonably anticipate that distributions will be required
from the Escrow Fund, but the Escrow Agent shall, upon
written instructions from the Stockholder Representatives,
have the authority to liquidate any investments in order to
make distributions pursuant to this Agreement. The Escrow
Agent shall have no liability for losses arising from
liquidations of investments. The Escrow Agent may make all
Permitted Investments through its own bond department or the
trust department of any bank or trust company under common
control with the Escrow Agent or through the trust department
of any bank with which the Escrow Agent has a correspondent
relationship.
(b) For the purposes of this Agreement, "Permitted Investments"
shall be denominated in U.S. dollars and shall be limited to:
(i) direct general obligations of, or obligations the
payment of principal of and interest on which are
unconditionally guaranteed by, the United
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States of America, any agency thereof, any State, or
any political subdivision or other agency thereof;
(ii) certificates of deposit or other evidences of
indebtedness issued by any bank which is insured by
the Federal Deposit Insurance Corporation;
(iii) prime commercial paper (including variable demand
notes) of companies whose commercial paper is rated
A-1 or P-1 by Moody's or Standard & Poor's;
(iv) repurchase agreements collateralized by United
States treasuries; and
(v) A money market fund maintained by the Escrow Agent.
In the absence of written instructions, the funds will be
invested in accounts or funds described in clause (v).
(c) All income and profits arising from Permitted Investments of
all or any portion of the Escrow Fund shall be reinvested by
the Escrow Agent and made a part of the principal of the
Escrow Fund. Such income and profits shall be distributed to
the parties on the Distribution Date as set forth in Section
4 hereof.
8. Stock Splits; Stock Dividends. In the event of any stock split or
stock dividend with respect to Parent Common Stock that becomes
effective during the term of this Agreement, the additional shares so
issued with respect to the Escrow Shares shall be added to the Escrow
Shares and subject to the escrow covered by this Agreement and any
other references herein to a specific number of shares of Parent
Common Stock, the Value Per Share, and any other references herein to
prices for or the number of shares of Parent Common Stock shall be
adjusted accordingly.
9. Maintenance of the Escrow Fund; Termination of the Escrow Fund. The
Escrow Agent shall continue to maintain the Escrow Fund and hold the
Escrow Shares until the earlier of (i) the time at which the Escrow
Fund is disbursed in accordance with Section 4 hereof and (ii) the
termination of this Agreement. Notwithstanding the foregoing, the
Escrow Agent shall have the power to release and transfer portions of
the Escrow Fund whenever the Escrow Agent shall be required to release
all or any portion of the Escrow Fund pursuant to Section 4 hereof.
10. Assignment; Successors. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of
the other parties hereto (which consent may be granted or withheld in
the sole discretion of such other parties); provided, however, that
the Parent may, without the consent of the other parties, assign this
Agreement prior to the disbursement of the Escrow Fund and delivery of
the Escrow Fund pursuant to Section 4 hereof to an entity who controls
Parent or to an entity controlled by Parent to which the Parent has
assigned any of its rights under the Merger Agreement, but no such
assignment shall relieve the Parent of any of its obligations
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under this Agreement. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their permitted
assigns.
11. Escrow Agent.
(a) Except as expressly contemplated by this Agreement or by
written instructions given by a Company Stockholder after
Parent has advised Escrow Agent in writing that the ASR 135
restriction period has expired, the Escrow Agent shall not
sell, transfer or otherwise dispose of in any manner all or
any portion of the Escrow Fund, except pursuant to an order
of a court of competent jurisdiction.
(b) The duties and obligations of the Escrow Agent shall be
determined solely by this Agreement, and the Escrow Agent
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Agreement. The Escrow Agent shall neither be responsible for
or under, nor chargeable with knowledge of the terms and
conditions of, any other agreement, instrument or document in
connection herewith, including but not limited to the Merger
Agreement.
(c) In the performance of its duties hereunder, the Escrow Agent
shall be entitled to rely upon any document, instrument or
signature believed by it in good faith to be genuine and
signed by any party hereto or an authorized officer or agent
thereof, and shall not be required to investigate the truth
or accuracy of any statement contained in any such document
or instrument. The Escrow Agent may assume that any person
purporting to give any notice in accordance with the
provisions of this Agreement has been duly authorized to do
so. The Escrow Agent shall have no responsibility for the
contents of any such writing contemplated herein and may
conclusively rely without any liability upon the contents
thereof.
(d) The Escrow Agent shall not be liable for any error of
judgment, or any action taken, suffered or omitted to be
taken, hereunder except in the case of its gross negligence,
bad faith or willful misconduct. The Escrow Agent may consult
with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with
the opinion of such counsel.
(e) The Escrow Agent shall have no duty as to the collection or
protection of the Escrow Fund or income thereon, nor as to
the preservation of any rights pertaining thereto, beyond the
safe custody of any such property actually in its possession.
(f) The Escrow Agent shall be paid its fees and shall be
reimbursed upon request for all expenses, disbursements and
advances, including reasonable fees of outside counsel, if
any, incurred or made by it in connection with the
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preparation of this Agreement and the carrying out of its
duties under this Agreement. All such fees and expenses shall
be the responsibility of the Parent.
(g) To the extent that the Escrow Agent becomes liable for the
payment of Taxes, including withholding Taxes, in respect of
income derived from the investment of funds held hereunder
and/or possession of the Escrow Shares or any payment made
hereunder, the Escrow Agent may pay such Taxes. The Escrow
Agent may withhold from any payment of monies held by it
hereunder such amount, as directed by the Company and the
Parent in writing, to be sufficient to provide for the payment
of such Taxes not yet paid, and may use the sum withheld for
that purpose. Each of the Company and the Parent shall furnish
to Escrow Agent such information as may be reasonably
requested by the Escrow Agent so that the Escrow Agent may
prepare and file with the Internal Revenue Service any
required Tax reports.
(h) Parent shall reimburse and indemnify the Escrow Agent, its
employees, directors, officers and agents for, and hold each
harmless against, any loss, liability or expense, including,
without limitation, reasonable attorneys' fees, incurred
without gross negligence, bad faith or willful misconduct on
the part of the Escrow Agent arising out of, or in connection
with the acceptance of, or the performance of, its duties and
obligations under this Agreement; provided that the Company
Stockholders shall reimburse and indemnify the Escrow Agent
for, and hold it harmless against, any such loss, liability
or expense incurred as a result of gross negligence, bad
faith or willful misconduct on the part of Company, the
Company Stockholders or the Stockholders' Representatives.
Promptly after the receipt by the Escrow Agent of notice of
any demand or claim or the commencement of any action, suit
or proceeding, the Escrow Agent shall, if a claim in respect
thereof is to be made against any of the other parties
hereto, notify such other parties thereof in writing; but the
failure by the Escrow Agent to give such notice shall not
relieve such party from any liability which it may have to
the Escrow Agent hereunder, except to the extent such
indemnifying party is materially prejudiced by such failure.
For the purposes hereof, the term "expense or loss" shall
include all amounts paid or payable to satisfy any claim,
demand or liability, or in settlement of any claim, demand,
action, suit or proceeding settled with the express written
consent of the indemnifying party, and all reasonable costs
and expenses, including, but not limited to, counsel fees and
disbursements paid or incurred in investigating or defending
against any such claim, demand, action, suit or proceeding.
The Escrow Agent shall have no right of setoff under this
Agreement or otherwise against amounts in the Escrow Fund.
(i) The Escrow Agent may at any time resign by giving 20 business
days' prior written notice of resignation to the Stockholders'
Representatives and the Parent. The Stockholders'
Representatives and the Parent may at any time jointly remove
the Escrow Agent by giving 10 business days' prior written
notice signed by each of them to the Escrow Agent. If the
Escrow Agent shall
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resign or be removed, a successor Escrow Agent, which shall
be a bank or trust company having assets in excess of $1
billion, shall be appointed by the Stockholders'
Representatives and the Parent by written instrument executed
by the Stockholders' Representatives and the Parent and
delivered to the Escrow Agent and to such successor Escrow
Agent and, thereupon, the resignation or removal of the
predecessor Escrow Agent shall become effective and such
successor Escrow Agent, without any further act, deed or
conveyance, shall become vested with all right, title and
interest to all cash and property held hereunder of such
predecessor Escrow Agent, and such predecessor Escrow Agent
shall, on the written request of the Stockholders'
Representatives, the Parent or the successor Escrow Agent,
deliver to such successor Escrow Agent all the right, title
and interest hereunder in and to the Escrow Fund and the
Escrow Shares of such predecessor Escrow Agent and all other
rights hereunder of such predecessor Escrow Agent. If no
successor Escrow Agent shall have been appointed within 20
business days of a notice of resignation by the Escrow Agent,
the Escrow Agent's sole responsibility shall thereafter be to
hold the Escrow Fund and the Escrow Shares until its receipt
of designation of a successor Escrow Agent, and the Escrow
Agent shall be entitled to apply to a court of competent
jurisdiction for the appointment of a successor. Upon its
resignation and delivery of the Escrow Fund and the Escrow
Shares as set forth above, the Escrow Agent shall be
discharged from any and all further obligations arising in
connection with the escrow contemplated by this Agreement.
12. Termination. This Escrow Agreement shall terminate on the date on
which there is no property remaining in the Escrow Fund and the Escrow
Shares have been delivered or returned in accordance with Section 4
hereof; provided that the rights of the Escrow Agent and the other
parties hereto under Section 4 hereof shall survive the termination
hereof and the resignation or removal of the Escrow Agent; provided
further that nothing herein shall relieve any party from liability for
any breach of this Agreement.
13. Further Assurances. From time to time on and after the date hereof,
the other parties hereto shall deliver or cause to be delivered to the
Escrow Agent such further documents and instruments and shall do and
cause to be done such further acts as the Escrow Agent shall
reasonably request (it being understood that the Escrow Agent shall
have no obligation to make any such request) to carry out more
effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to secure itself that it is protected in acting
hereunder.
14. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by telecopy or by
registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given
in accordance with this Section 14):
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if to the Parent:
Towne Services, Inc.
3950 Johns Creek Court, Suite 100
Suwanee, GA 30024
Telecopy: 678-475-5252
Attention: Drew W. Edwards,
Chief Executive Officer
with a copy (which shall not constitute notice) to:
Nelson Mullins Riley & Scarborough, L.L.P.
999 Peachtree Street, Suite 1400
Atlanta, GA 30309
Telecopy: (404) 817-6050
Attention: Susan L. Spencer, Esq.
if to the Stockholders' Representatives:
Forseon Corporation
6600 Jurupa Avenue
Riverside, CA 92504
Telecopy: (909) 689-4124
Attention: Allen Merrill, Senior Vice President
and Chief Financial Officer
with a copy (which shall not constitute notice) to:
Gibson, Dunn & Crutcher LLP
4 Park Plaza
Irvine, California 92614
Telecopy: (949) 475-4665
Attention: Mark W. Shurtleff, Esq.
if to the Escrow Agent, to:
First Union National Bank
999 Peachtree Street, NE
Eleventh Floor
Atlanta, GA 30309
Telecopy: (404) 827-7305
Attention: Mr. Brian Justice
15. Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
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16. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated by this Agreement are consummated as
originally contemplated to the greatest extent possible.
17. Entire Agreement. This Agreement and the Merger Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and undertakings, both written
and oral, among the Company, the Parent and the Escrow Agent with respect
to the subject matter hereof.
18. No Third Party Beneficiaries. This Agreement is for the sole benefit of
the parties hereto, their permitted assigns and the Company Stockholders
and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
19. Amendment. This Agreement may not be amended or modified except: (i) by an
instrument in writing signed by, or on behalf of, the Company, the Parent
and the Escrow Agent; or (ii) by a waiver in accordance with Section 20
hereof.
20. Waiver. Any party hereto (the "WAIVING PARTY") may: (i) extend the time
for the performance of any obligation or other act of any other party
hereto owed to the Waiving Party; or (ii) waive compliance with any
agreement or condition contained herein (it being understood and agreed
that such an extension or waiver shall not constitute, by itself, an
extension or waiver by any other party hereto of any such obligation, act,
agreement or condition owed to, or for the benefit of, such third party).
Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
Any waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement.
The failure of any party to assert any of its rights hereunder shall not
constitute a waiver of any of such rights.
21. Governing Law. This Agreement shall be governed by the laws of the State
of Georgia. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any Georgia state or federal
court and the parties hereto irrevocably submit
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to the jurisdiction of such courts and waive any defense of an
inconvenient forum to the maintenance of any such action or
proceeding.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an
original but all of which when taken together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Escrow Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
TOWNE SERVICES, INC.
By: /s/ Bruce F. Lowthers, Jr.
-------------------------------
Name: Bruce F. Lowthers, Jr.
Title: Chief Financial Officer
STOCKHOLDERS' REPRESENTATIVE
/s/ Dan Paul
-------------------------------
Dan Paul
/s/ Allen Merrill
-------------------------------
Allen Merrill
FIRST UNION NATIONAL BANK
By: /s/ Brian K. Justice
-------------------------------
Name: Brian K Justice
Title: Assistant Vice President
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Forseon Corporation acknowledges and agrees to the foregoing provisions of this
Escrow Agreement and hereby constitutes and appoints the Escrow Agent as its
attorney-in-fact for the purpose of effecting any and all transfers of any
portion of the Escrow Fund contemplated or required by this Agreement. Pursuant
to this authority, the Escrow Agent shall have authority to take such action
and execute on behalf of Company such documents as may be necessary to effect
transfers of Escrow Shares or other property in the Escrow Fund, including
without limitation, stock powers and transfer orders.
FORSEON CORPORATION
By: /s/ Allen Merrill
----------------------------
Name: Allen Merrill
Title: Chief Financial Officer
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