EXHIBIT 10.37
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated this 26th day of February, 1999,
is entered into by and among ANSWERTHINK CONSULTING GROUP, INC., a Florida
corporation ("BUYER"), FIRST UNION NATIONAL BANK ("ESCROW AGENT") and those
certain shareholders, vested optionholders and warrantholders of triSpan Inc., a
Pennsylvania corporation (the "COMPANY") listed on the signature page hereof
(collectively, the "SELLERS").
RECITALS
A. Buyer, ACG-triSpan Sub, Inc., a Delaware corporation and
wholly owned subsidiary of Buyer ("NEWCO"), triSpan Inc. ("TRISPAN") and the
Sellers have entered into a Merger Agreement dated as of February 26, 1999 (the
"MERGER AGREEMENT") pursuant to which triSpan will merge with and into Newco,
with Newco being the surviving corporation, and the shares of capital stock of
triSpan being converted into the right to receive the Purchase Price as
specified in SECTION 2.8(A) of the Merger Agreement;
B. Terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Merger Agreement; and
C. This Escrow Agreement is entered into pursuant to ARTICLES
II and VIII of the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the parties
do hereby agree as follows:
1. DEPOSIT OF BUYER STOCK.
(a) Promptly after the closing contemplated by SECTION
2.10 of the Merger Agreement, Buyer will deposit with the Escrow Agent shares of
Buyer Common Stock, par value $0.01 per share (the "BUYER STOCK"), with the
aggregate of such shares valued at the sum of $948,575 (as determined in
accordance with SECTION 2.8 of the Merger Agreement) and consisting of 34,291
shares of Buyer Stock with a Purchase Price Per Share of $27.6625 (the
"ESCROW").
(b) All shares of the Buyer's Common Stock required to
be held in the Escrow pursuant to SECTION 2.12 of the Merger Agreement that may
be issued to one or more of the Sellers in accordance with the terms of their
respective option arrangements shall be deposited by Buyer with the Escrow Agent
promptly after Buyer receives notice from a Seller that he, she or it is
exercising their rights under their New Buyer Option, and all such shares shall
be treated as Buyer Stock and subject to the restrictions and limitations set
forth herein.
(c) The Escrow is to be retained by the Escrow Agent
pursuant to this Agreement, and the Escrow and income thereon may be disbursed
by the Escrow Agent only in accordance with this Agreement.
2. THE ESCROW.
The Buyer Stock held in the Escrow shall be valued for all
purposes under this Agreement at $27.6625 per share, which is their Fair Market
Price at Closing (as defined in the Merger Agreement). The shares of Buyer Stock
held in the Escrow shall initially be registered in the name of the Escrow
Agent, as attorneys for the benefit
of Buyer; PROVIDED, HOWEVER, that the Sellers must enter into the Equity
Subscription Agreement in respect of such shares of Buyer Stock held in the
Escrow.
3. DUTIES OF THE ESCROW AGENT.
(a) The Escrow Agent shall receive, hold and invest (as
applicable) the Escrow pursuant to the terms of this Agreement. Except as
hereinafter provided, on the first anniversary of the Closing Date, the balance
of the Escrow not previously claimed by or paid or subject to a pending claim by
Buyer pursuant to an Escrow Claim shall be disbursed to the Sellers (based on
their relative contributions to the Escrow) after being registered in the name
of the appropriate Sellers. The Sellers and Buyer agree that each will execute
and deliver such instruments and documents as are furnished by the other party
to enable such furnishing party to receive those portions of the Escrow to which
the furnishing party is entitled under the provisions of the Merger Agreement
and this Agreement, including without limitation the removal of the Escrow
Legend.
(b) Upon written notice from Buyer to Escrow Agent and
the Sellers of any claim under the Merger Agreement against Sellers and the
Escrow, setting forth a description of the facts upon which the claim is based
and the amount of the claim (a "CLAIM", with the notice thereof referred to as
the "CLAIM NOTICE"), the Escrow Agent immediately shall reserve the number of
shares of Buyer Stock equal in value to the claim specified in the Claim Notice
(the "RESERVED SHARES").
(c) Buyer shall notify the Escrow Agent and the Sellers
of a Claim by mailing a copy of the Claim Notice to both Sellers and the Escrow
Agent by certified mail, return receipt requested or by personal service as
provided in Paragraph 7(e) hereof. In the event that the Sellers do not notify
the Escrow Agent and Buyer and Newco in writing of their objection to the Claim
within thirty (30) days of the receipt by the Escrow Agent of the Claim Notice,
the Escrow Agent shall deliver the Reserved Shares to Buyer.
(d) In the event a Claim Notice is received by the
Escrow Agent and the Escrow Agent receives a written objection to the Claim from
the Sellers within thirty (30) days of the receipt by the Escrow Agent of the
Claim Notice to the Sellers, the Escrow Agent shall continue to hold the
Reserved Shares until it either (i) receives a joint written direction from the
Buyer on the one hand and the Sellers on the other with respect to the
disposition of such reserved portion of the Escrow, (ii) until Buyer and the
Sellers have resolved the claim, or (iii) receives a determination from an
arbitrator pursuant to the dispute resolution procedures outlined in SECTION 8.8
of the Merger Agreement; or (iv) an order from a court of competent
jurisdiction.
(e) Any dividends, interest or other income earned, if
applicable, by the Escrow, net of any transaction costs associated with
investment thereof shall be paid to the Sellers from time to time at the sole
discretion of the Sellers.
(f) The Escrow Agent shall provide Buyer, Newco and the
Sellers with quarterly reports of assets, if applicable, held and income earned
by the Escrow.
(g) The Escrow Agent shall exercise any voting or
consent rights associated with the Buyer's Stock in such manner as may be
directed in writing by the Sellers.
4. REPLACEMENT OF ESCROW AGENT; RESOLUTION OF DISPUTES.
(a) In the event of any conflict of interest in respect
of the Escrow Agent hereunder (as reasonably determined by Buyer), Buyer shall
have the option to replace the Escrow Agent with a neutral third party Escrow
Agent (which shall be a bank or trust company having a capital and surplus of
not less than $50,000,000) designated jointly by Buyer and Sellers.
(b) All disputes between the Sellers and either Buyer or
Newco with respect to (a) the Escrow, (b) the allowance or disallowance of a
Claim by Buyer or Newco, or (c) the terms of this Agreement or the rights and
obligations of the Sellers, Buyer and Newco hereunder, which cannot be resolved
promptly by mutual agreement, will be resolved by binding arbitration in
accordance with the rules of the American Arbitration Association as provided in
SECTION 8.8 of the Merger Agreement.
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(c) If any controversy arises between the parties hereto
or with any third person, the Escrow Agent, shall not be required to resolve the
same or to take any action to do so but may, at its discretion, institute such
interpleader or other proceedings as it deems proper. The Escrow Agent may rely
on any joint written instructions as to the disposition of funds, assets
documents, or other assets held in escrow.
5. OPERATIONS.
The Sellers, Buyer and Newco hereby agree with the Escrow
Agent that:
(a) The Escrow Agent shall have no duties or
responsibilities except as expressly provided for in this Agreement.
(b) The Escrow Agent shall not be responsible for the
identity, authority or rights of any person, firm or corporation executing or
delivering or purporting to execute or deliver this Agreement or any document or
security deposited hereunder or any endorsement thereon or assignment thereof.
(c) The Escrow Agent shall not be responsible for the
sufficiency, genuineness or validity of or title to any document or security
deposited or to be deposited with it pursuant to this Agreement or of any
endorsement thereon or assignment thereof.
(d) The Escrow Agent may rely upon any instrument or
writing believed by it to be genuine and sufficient and properly presented, and
shall not be liable or responsible for any action taken or omitted in accordance
with the provisions thereof.
(e) The Escrow Agent shall not be liable or responsible
for any act it may do or omit to do in the exercise of reasonable care.
(f) In case any property held by the Escrow Agent
hereunder shall be attached, garnished or levied upon under any order of any
court or the delivery thereof shall be stayed or enjoined by any order of any
court, or any other order, judgment or decree shall be made or entered by any
court affecting such property or any part thereof or any acts of the Escrow
Agent, the Escrow Agent is hereby authorized, in its exclusive discretion, to
obey and comply with all writs, orders, judgments, or decrees so entered or
issued, whether with or without jurisdiction, and, if the Escrow Agent obeys and
complies with any such writ, order, judgment or decree, it shall not be liable
to any of the parties hereto, their successors, heirs or personal
representatives or to any other person, firm or corporation, by reason of such
compliance notwithstanding such writ, order, judgment or decree be subsequently
reversed, modified, annulled, set aside or vacated.
(g) The Escrow Agent shall be entitled to reasonable
compensation for its services and may employ agents and attorneys for (i) the
reasonable protection of the property held hereunder; or (ii) representation in
any dispute resolution process or court proceeding as a stockholder.
(h) Buyer, Newco and the Sellers jointly and severally
agree to indemnify and hold Escrow Agent harmless from any and all costs,
expenses, claims, losses, liabilities and damages (including reasonable
attorneys' fees) that may arise out of or in connection with Escrow Agent's
acting as Escrow Agent under the terms of this Escrow Agreement, except in those
instances where Escrow Agent has been guilty of gross negligence or willful
misconduct.
6. FEES AND EXPENSES. All fees and expenses of the Escrow
Agent shall be paid the Buyer, except that any expenses of the Escrow Agent in
connection with any litigation hereunder shall be paid by the party obligated
for the cost of such litigation. The Escrow Agent shall be compensated for its
services in accordance with SCHEDULE A attached hereto and, in addition, the
Escrow Agent shall be reimbursed for all of its reasonable out-of-pocket
expenses, including attorney's fees, travel expenses, telephone and facsimile
transmission costs, postage (including express mail and overnight delivery
charges), copying charges and the like. All of the compensation and
reimbursement obligations set forth in this SECTION 6 shall be payable upon
demand by the Escrow Agent.
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7. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, and no other persons shall have any rights herein. No transferee,
successor or assign of any Seller or Newco or Buyer shall have any rights
hereunder until each notice thereof has been given and evidence of each
transfer, assignment or succession is provided to Escrow Agent. This Agreement,
together with the Merger Agreement and related exhibits and schedules, contains
the entire understanding of the parties hereto with respect to the transactions
contemplated hereby and may be amended, modified, supplemented or altered only
by a writing duly executed by the Escrow Agent, the Sellers and Buyer, and any
prior agreements or understandings, whether oral or written, are entirely
superseded hereby.
(b) This Agreement may be executed and endorsed in one
or more counterparts and each of such counterparts shall, for all purposes, be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Signatures sent to the other parties by facsimile
transmission shall be binding as evidence of acceptance of the terms hereof by
such signatory party.
(c) A successor Escrow Agent may be appointed at any
time as provided in SECTION 4 hereof.
(d) The Escrow Agent agrees to hold the assets of the
Escrow in a segregated and separate account or vault, if applicable, outside the
reach of its general creditors.
(e) Any notice, statement or other communication which
is required may be given, including Claim Notices, hereunder shall be in writing
and shall be sufficient in all respects if delivered personally or by certified
United States mail, postage prepaid, return receipt requested as follows:
THE ESCROW AGENT:
First Union National Bank
Corporate Trust Administration, VA 3279
800 East Main Street, Lower Mezzanine
Richmond, Virginia 23219
Attention: Gregory N. Jordan
Fax No. (804) 343-6699
Tel No.: (804) 343-6058
SELLER OR NEWCO:
AnswerThink Consulting Group, Inc.
1001 Brickell Bay Drive, 30th Floor
Miami, Florida 33131
Attention: Ted A. Fernandez and John F. Brennan
Fax No.: (305) 379-8810
Tel No.: (305) 375-8005
WITH A COPY TO:
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, NW
Washington, D.C. 20004-1109
Attention: J. Hovey Kemp
Fax No.: (202) 637-5910
Tel No.: (202) 637-5623
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THE SELLERS:
John Louchheim, COO and Founder
triSpan Inc.
The Clock Tower
1001 Washington Street
Conshohocken, PA 19428
Fax No.: (610) 995-9005
Tel No.: (610) 995-9000
George H. Spencer
JK&B Capital
205 North Michigan Avenue, Suite 808
Chicago, IL 60601
Tel: (312) 946-1200
Fax: (312) 946-1103
WITH COPIES TO:
James L. Learner
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Tel No.: (312) 861-2000
Fax No.: (312) 861-2200
David R. Richie, II
Stevens & Lee
111 North Sixth Street
Reading, PA 19603
Tel No.: (610) 478-2127
Fax No.: (610) 376-5610
The address of a party may be changed from time to time by giving notice in the
manner prescribed in this paragraph. All such notices or communications will be
effective upon mailing, if mailed, and upon receipt, if personally delivered.
(f) The validity, enforcement and construction of this
Agreement shall be governed by the laws of the State of New York without giving
effect to the conflict of laws principles thereof.
(g) Each of the parties hereto agrees to cooperate with
the other parties hereto in effectuating this Agreement and to execute and
deliver such further documents or instruments and to take such further actions
as shall be reasonably requested in connection therewith.
(h) If any one or more provisions in this Agreement, for
any reason, shall be determined to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of any such provision in any
other respect and the remaining provisions of this Agreement shall not be in
anyway impaired.
(i) The Escrow Agent may resign as such by delivering
written notice to that effect at least thirty (30) days prior to effective date
of such resignation to Buyer and the Sellers. Buyer and the Sellers, acting
jointly, may terminate the Escrow Agent from its position as such by delivering
to the Escrow Agent written notice to that effect executed by Buyer and the
Sellers at least thirty (30) days prior to the effective date of such
termination. In the event of such resignation or termination of the Escrow
Agent, a successor Escrow Agent shall be appointed by mutual agreement between
Buyer and the Sellers. From and after the appointment of a successor Escrow
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Agent pursuant to this SECTION 7(J), all references herein to the Escrow Agent
shall be deemed to be to such successor Escrow Agent.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the day and year first above written.
BUYER:
ANSWERTHINK CONSULTING GROUP, INC.
By: /s/ TED A. FERNANDEZ
------------------------------------------
Name: Ted A. Fernandez
Title: President and CEO
AGENT:
FIRST UNION NATIONAL BANK
By: /s/ GREGORY N. JORDAN
------------------------------------------
Name: Gregory N. Jordan
Title: Corporate Trust Officer
SELLERS:
/s/ JOHN LOUCHHEIM
------------------------------------------
John Louchheim
/s/ DENNIS M. MCGRATH
------------------------------------------
Dennis M. McGrath
JK&B CAPITAL L.P.
By: JK&B MANAGEMENT, L.L.C.
General Partner
By: /s/ DAVID KRONFELD
-----------------------------------------
Name: David Kronfeld
Its: Manager
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JK&B CAPITAL II, L.P.
By: JK&B MANAGEMENT, L.L.C.
General Partner
By: /s/ DAVID KRONFELD
-----------------------------------------
Name: David Kronfeld
Its: Manager
APEX INVESTMENT FUND III, LP
By: APEX MANAGEMENT III, LLC,
ITS MANAGER
By: FIRST ANALYSIS MANAGEMENT CO. III, LLC
MANAGING MEMBER
By: /s/ BRET R. MAXWELL
----------------------------------------
Name: Bret R. Maxwell
Its: Member
APEX STRATEGIC PARTNERS, LLC
By: APEX MANAGEMENT III, LLC,
ITS MANAGER
By: FIRST ANALYSIS MANAGEMENT CO. III, LLC
MANAGING MEMBER
By: /s/ BRET R. MAXWELL
-----------------------------------------
Name: Bret R. Maxwell
Its: Member
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management, L.P.
By: /s/ PETER A. HURWITZ
-----------------------------------------
Name: Peter A. Hurwitz
Its: Attorney in Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors L.L.C.
By: /s/ PETER A. HURWITZ
-----------------------------------------
Name: Peter A. Hurwitz
Its: Manager
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BOSTON CAPITAL VENTURES III
By: /s/ DAVID KRONFELD
-----------------------------------------
Name: David Kronfeld
Its: General Partner
VELOCITY CAPITAL, LLC
By: /s/ DAVID A. VOGEL
----------------------------------------
Name: David A. Vogel
Its: Member/Manager
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SCHEDULE A
ESCROW COMPENSATION
The ESCROW AGENT shall receive the following fees from ACQUIRER and TRANSFERORS:
1. WAIVED - Set-up Fee:
Includes the preparation and review of documents and establishment of the escrow
account.
2. $1,500 Annual Advance Administration Fee:
3. $25.00 Investment Transactions:
For purchases, sales and maturities of securities
** THIS FEE DOES NOT APPLY TO FUNDS INVESTED IN ONE OF ESCROW AGENT'S
PROPRIETARY MONEY MARKET VEHICLES.
4. Disbursement Charges:
$25.00 per Wire Transfer
$15.00 per Check
5. Recovery of out-of-pocket expenses will be billed at cost.
6. Tax Reporting
$10.00 per Form 1099-INT
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