Exhibit 10.28
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made as of the 1st day of July, 1998, by and
among MLC Holdings, Inc., a Delaware corporation ("MLC"), Crestar Bank, a
Virginia banking association, as escrow agent (the "Escrow Agent"), and Nadim
Achi, as representative of the Stockholders (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of July
1, 1998 (the "Merger Agreement"), among MLC, MLC Network Solutions of Virginia,
Inc., a Virginia corporation and a wholly owned subsidiary of MLC ("Network
Solutions"), PCPlus, Inc. ("PCPlus"), and the stockholders of PCPlus
(collectively, the "Stockholders"), PCPlus was merged with and into Network
Solutions (the "Merger");
WHEREAS, in connection with the Merger, all of the outstanding shares
of PCPlus' common stock held by the Stockholders will be canceled and converted
into the right to receive the Merger Consideration (as defined in the Merger
agreement), which includes an aggregate of 263,478 shares of MLC's common stock,
$.01 par value (the "MLC Common Shares");
WHEREAS, the Merger Agreement provides that, as soon as practicable
after the Closing Date (as defined in the Merger Agreement), MLC Common Share
certificates representing five percent (5%) of the Merger Consideration based on
the Merger Share Price (as defined below) (the "Escrowed Shares") and stock
powers (executed in blank) with respect thereto shall be deposited by the
Stockholders in escrow (the "Escrow Deposit"), to be held and disposed of by the
Escrow Agent as provided herein;
WHEREAS, pursuant to the Merger Agreement, each of the Stockholders has
appointed Nadim Achi (or such individual as may succeed Nadim Achi pursuant to
the provisions of Section 3 hereof) as his exclusive agent (Nadim Achi or such
other individual being hereinafter referred to as the "Representative") to act
with full authority for him and on his behalf in all matters relating to the
subject matter of this Agreement; and
WHEREAS, MLC and the Representative wish to appoint the Escrow Agent to
serve as the escrow agent hereunder, and the Escrow Agent is willing to do so
upon the terms and conditions hereinafter set forth.
NOW THEREFORE, it is agreed:
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SECTION 1
APPOINTMENT OF ESCROW AGENT; CREATION OF ESCROW DEPOSIT
1.1. Appointment of Escrow Agent. MLC and the Representative hereby appoint the
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Escrow Agent, and the Escrow Agent hereby agrees to act, as depository and
administrator of the Escrow Deposit, upon the terms and conditions set forth
below.
1.2. Creation of Escrow Deposit. Simultaneously with the execution and delivery
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of this Agreement, the Stockholders, pursuant to the Merger Agreement, (i) have
executed and delivered to MLC irrevocable instructions to deduct the Escrowed
Shares from the number of MLC Common Shares otherwise deliverable to the
Stockholders in connection with the Merger and to deposit on behalf of the
Stockholders the Escrowed Shares with the Escrow Agent in the Escrow Deposit and
(ii) have delivered to the Escrow Agent, for deposit into the Escrow Deposit,
stock powers (executed in blank) covering the Escrowed Shares, the receipt of
such Escrowed Shares and stock powers is hereby acknowledged by the Escrow
Agent. In addition, the Representative hereby (i) authorizes MLC to deliver
directly to the Escrow Agent all dividends and other distributions made in
respect of any Escrowed Shares held in the Escrow Deposit (whether paid in cash,
securities or other property), all of which dividends and other distributions
shall be added to and become part of the Escrow Deposit, and (ii) agrees to
deliver or cause to be delivered to the Escrow Agent such additional stock
powers and other instruments of transfer (executed in blank) as MLC shall
reasonably request from time to time in respect of all securities and other
property deposited into the Escrow Deposit pursuant to clause (i) of this
sentence.
1.3. Stockholder Rights. While any MLC Common Shares are held in the
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Escrow Deposit, and pending the disbursement thereof to MLC or the Stockholders,
as the case may be, in connection with any disbursement of property from the
Escrow Deposit in accordance with Section 2, the Stockholders shall have all
rights with respect thereto (including, without limitation, the right to vote
such shares), except (i) the right of possession thereof, (ii) the right to
assign or pledge such shares or any interest therein and (iii) the right to
possession of any dividends or other distributions received in respect thereof.
1.4. Stockholder Percentage Interest in Escrow Deposit. Attached hereto as
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Schedule 1.4 is a schedule listing each Stockholder, such Stockholder's address
and Social Security or other tax identification number and such Stockholder's
interest in the Escrow Deposit (expressed as a percentage, based on the number
of Escrowed Shares delivered to the Escrow Agent at the Closing Date on behalf
of such Stockholder).
1.5. Merger Share Price. The average share price is $13.50 per Escrowed Share
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(the "Merger Share Price").
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SECTION 2
DISPOSITION OF ESCROW DEPOSIT
2.1. Term of Escrow Deposit.
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2.1.a. The Escrowed Shares held in the Escrow Deposit shall be held by the
Escrow Agent on the terms and subject to the conditions set forth herein and in
the Merger Agreement (but the Escrow Agent shall have no responsibility with
respect to the Merger Agreement other than to perform as provided in this
Agreement) to satisfy the indemnification obligations of the Stockholders
pursuant to Section 12 of the Merger Agreement. The Escrow Agent shall release a
portion of the Escrow Deposit to the Representative on the close of business on
the first anniversary of the Closing Date (the "Initial Expiration Date"),
subject to the terms and conditions set forth in Sections 2.7(a) and 2.8.
2.1.b. The Escrowed Shares held in the Escrow Deposit after the Initial
Expiration Date shall be held by the Escrow Agent on the terms and subject to
the conditions set forth herein and in the Arrow Agreement until the first
anniversary of the Closing Date (the "Final Expiration Date" and collectively
with the Initial Expiration Date, the "Expiration Dates"). Notwithstanding the
foregoing, any amount that constitutes a Claim Reserve (as defined in Section
2.6) shall be released prior to the Final Expiration Date in accordance with
Section 2.8. On the Final Expiration Date, the Escrow Agent shall release the
remaining Escrowed Purchase Price held in the Escrow Deposit to the Selling
Persons, subject to the terms and conditions set forth in Sections 2.7(b) and
2.8
2.2. MLC Indemnity Claims. In the event of the occurrence of an event which MLC
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in its reasonable judgment asserts constitutes a MLC Indemnity Claim (as defined
in the Merger Agreement), MLC shall furnish notice of such event (the "Indemnity
Notice") to the Representative and the Escrow Agent promptly (and in any event
on or prior to the Expiration Date), setting forth MLC's then good-faith
estimate of the reasonably foreseeable maximum amount of its MLC Indemnity
Claim, and shall make available to the Representative all relevant information
which is material to such MLC Indemnity Claim and which is in the possession of
MLC.
2.3. MLC Indemnity Claims Not Disputed by Representative. If, within thirty (30)
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days after receipt of the Indemnity Notice, the Representative does not give the
notice provided for in Section 2.4, MLC shall be entitled to make demand upon
the Escrow Agent that it retain for future return to MLC as and when the amount
is determined, if the amount is not then determined, or that it then disburse to
MLC, if the amount has then been determined, a number of Escrowed Shares having
a value equal to the lesser of (i) the full amount set forth in the Indemnity
Notice (plus the value of all property held in the Escrow Deposit which arose in
respect of dividends and distributions on such Escrowed Shares) or (ii) the
entire Escrow Deposit. For purposes of this Agreement, the value of each
Escrowed Share returned to MLC in satisfaction of MLC Indemnity Claims shall be
calculated based upon the Merger Share Price.
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2.4. MLC Indemnity Claims Disputed by Representative in Whole. If the
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Representative disputes either the MLC Indemnity Claim described in the
Indemnity Notice or the amount MLC seeks as indemnity on account of such MLC
Indemnity Claim, the Representative shall, within thirty (30) days after his
receipt of the Indemnity Notice, notify the Escrow Agent and MLC of such
dispute, setting forth the basis therefor in reasonable detail, based on his
then good-faith belief. In the event the Representative disputes the entire MLC
Indemnity Claim, the Escrow Agent shall not distribute any amount with respect
thereto until the Escrow Agent receives a written agreement signed the
Representative and MLC stating the amount to which MLC is entitled in connection
with such MLC Indemnity Claim, or a copy of a court order or judgment together
with an opinion of counsel reasonably acceptable to the Escrow Agent to the
effect that such order or judgment is a final order or judgment of a court of
competent jurisdiction binding on MLC and the Stockholders from which no appeal
may be taken or for which the time to appeal has expired (a "Final Judgment"),
at which time the Escrow Agent shall disburse to MLC the lesser of (i) a number
of Escrowed Shares having a value (based on the Merger Share Price) equal to the
amount set forth in such agreement or Final Judgment (plus the value of all
property held in the Escrow Deposit which arose in respect of dividends and
distributions on such Shares) or (ii) the entire Escrow Deposit.
2.5. MLC Indemnity Claims Disputed by Representative in Part. In the event the
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Representative disputes part of, but not all of, a MLC Indemnity Claim, the
Escrow Agent shall, if the amount is undetermined, retain for future return to
MLC, or, if the amount is determined, return to MLC, the lesser of (i) a number
of Escrowed Shares having a value (based on the Merger Share Price) equal to an
amount attributable to that portion of the MLC Indemnity Claim which is not
disputed by the Representative (together with all property held in the Escrow
Deposit which arose in respect of dividends and distributions on such Escrowed
Shares) or (ii) the entire Escrow Deposit. The Escrow Agent shall not distribute
any amount with respect to the balance of such MLC Indemnity Claim except in
accordance with the procedures set forth in Section 2.4.
2.6. Notice to Withhold on the Expiration Dates. On or prior to the any of the
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Expiration Dates, MLC shall notify the Escrow Agent and the Representative of
the amount, if any, to be retained on account of MLC Indemnity Claims concerning
which MLC has given the notice specified in Section 2.2 which, in its reasonable
judgment, continue to constitute MLC Indemnity Claims and which are not, at such
time, absolute as to liability or liquidated as to amount, such notice to
contain the information specified in Section 2.2 to the extent it requires
supplementation or change based on MLC's knowledge on the notice date, whereupon
the Escrow Agent shall retain that portion of the Escrow Deposit (the "Claim
Reserve") having a value (determined in accordance with the last sentence of
Section 2.3 with respect to Escrowed Shares) equal to the amount set forth in
the notice given by MLC pursuant to this Section 2.6 (plus all property held in
the Escrow Deposit which constitutes, or arose in respect of, dividends,
distributions or interest on the Escrow Deposit). In the event MLC does not
timely provide the notice required by this Section 2.6, and continues to fail to
provide such notice within ten (10) business days after delivery by th
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Representative to MLC (with a copy to the Escrow Agent) of a demand that the
notice required by this Section 2.6 be delivered, all remaining property held in
the Escrow Deposit shall be distributed by the Escrow Agent to the Stockholders
in accordance with Section 2.7.
2.7. Distribution Following Expiration Dates.
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2.7.a. As soon as practicable following the Initial Expiration Date,
one-half of the Escrowed Shares and such other property as shall remain in the
Escrow Deposit after deduction of (i) all portions of the Escrow Deposit
required by MLC to be retained pursuant to notice given under Section 2.6 as a
Claim Reserve and (ii) all property held in the Escrow Deposit which
constitutes, or arose in respect of, dividends, other distributions or interest
on the Escrow Deposit referred to in clause (i) of this sentence shall be
released from the provisions of this Agreement and distributed promptly by the
Escrow Agent, as directed by the Representative, to the Stockholders, by a
nationally recognized overnight courier (at the risk of the Stockholders) to
such persons at the address as shall have been specified in a written notice to
the Escrow Agent from the Representative, with any cash amounts paid by wire
transfer to an account designated in writing by the Representative. In any such
notice, the Representative shall designate how much of the amount to be released
pursuant to Section 2.7(a) shall be payable in the form of Escrowed Shares
valued at the Average Share Price and how much shall be payable in the form of
cash..
2.7.b. As soon as practicable following the Final Expiration Date, the
remaining portion of the Escrow Deposit after deduction of (i) all amounts of
the Escrow Deposit required by MLC to be retained pursuant to notice given under
Section 2.6 and (ii) all property held in the Escrow Deposit which constitutes,
or arose in respect of, dividends, other distributions or interest on the Escrow
Deposit referred to in clause (i) of this sentence shall be released from the
provisions of this Agreement and distributed promptly by the Escrow Agent, as
directed by the Representative, to the Stockholders, by registered or certified
first class mail to such persons at the address as shall have been specified in
a written notice to the Escrow Agent from the Representative, with any cash
amounts paid in the form of a check issued by and drawn on the Escrow Agent.
2.8. Retention of Escrow Deposit After Expiration Dates. Upon receipt of a
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notice pursuant to Section 2.6, the Escrow Agent shall continue to hold after
the Expiration Dates, with respect to each MLC Indemnity Claim included in such
notice, the Claim Reserve until such time as the Escrow Agent receives a written
agreement signed by the Representative and MLC stating the amount, if any, to
which MLC is entitled from the Escrow Deposit in connection with such MLC
Indemnity Claim, or a copy of a Final Judgment with respect to such MLC
Indemnity Claim, at which time the Escrow Agent shall return to MLC, with
respect to such MLC Indemnity Claim, the portion of the Claim Reserve having a
value (determined in accordance with the last sentence of Section 2.3 with
respect to Escrowed Shares) equal to the amount specified in such agreement or
Final Judgment (plus the value of all property held in the Escrow Deposit which
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constitutes, or arose in respect of, dividends, distributions or interest on the
amount of the Claim Reserve to be distributed to MLC) and shall distribute, as
directed by the Representative, to the Stockholders, the remainder of the Claim
Reserve plus all property held in the Escrow Deposit which constitutes, or arose
in respect of, dividends, distributions or interest on such remainder; provided,
however, that, to the extent the distribution of the remainder of the Claim
Reserve to the Stockholders would cause the value of the property remaining in
the Escrow Deposit after such distribution to fall below the amount (as
stipulated in MLC's Section 2.6 notice) of all still unresolved MLC Indemnity
Claims identified in the Section 2.6 notice, such remainder shall be retained by
the Escrow Agent in the Escrow Deposit and shall be available for distribution
to MLC upon the resolution of any unresolved MLC Indemnity Claims, and such
remainder shall not be distributed to the Stockholders until such time, if any,
as such distribution can be made without causing the value of all property
remaining in the Escrow Deposit to fall below the amount of all remaining
unresolved MLC Indemnity Claims identified in the Section 2.6 notice.
2.9. Allocation of Escrowed Shares Distributed to MLC. In the event Escrowed
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Shares are retained by the Escrow Agent or distributed to MLC pursuant to any
provisions of this Section 2, such Escrowed Shares shall be taken from the
Escrowed Shares deposited by each Stockholder in proportion to such
Stockholder's percentage interest in the Escrow Deposit as set forth on Schedule
1.4.
2.10. Reservation of MLC's Rights. The rights of MLC to receive disbursements
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from the Escrow Account in respect of MLC Indemnity Claims shall be without
prejudice to any other rights MLC may have, under the Merger Agreement, to seek
indemnity for MLC Indemnity Claims.
2.11. Fractional Escrowed Shares. In the event that a payment of any MLC
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Indemnity Claim would involve fractional Escrowed Shares, the Escrow Agent shall
round the amount of Escrowed Shares necessary to settle such MLC Indemnity Claim
to the nearest whole number.
SECTION 3
INVESTMENT OF ESCROW DEPOSIT AND ACCOUNTING
3.1. Investment of Escrow Deposit. All cash held in the Escrow Deposit shall be
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invested by the Escrow Agent in Crestfunds US Treasury Money Funds, so long as
such fund is rated in the highest investment category by Standard & Poor's
Rating Group or Moody's Investors Service, Inc., or in such other investments as
MLC and the Representative may agree in a writing delivered to the Escrow Agent.
In the event that the Crestfunds US Treasury Money Funds shall cease to be rated
in the highest investment category by Standard & Poors Rating Group or Moody's
Investment Service, Inc., the Escrow Agent shall notify MLC and the
Representative in writing and promptly deposit all cash held in the Escrow
Deposit in a fund that has such rating until such time as MLC and the
Representative shall direct the Escrow Agent in writing to deposit such funds
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elsewhere. All interest and other income earned on the Escrow Deposit shall be
added to, and become part of, the Escrow Deposit, and the distribution thereof
shall be subject to the terms of this Agreement.
3.2. Accounting. The Escrow Agent shall provide a written account to MLC and the
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Representative at the end of each month prior to the Expiration Date (and
thereafter to the extent any amounts remain in escrow pursuant to Section 2.8)
listing all transactions with respect to the Escrow Deposit during the
immediately preceding month.
SECTION 4
ESCROW AGENT
4.1. Duties. The duties and obligations of the Escrow Agent shall be determined
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solely by the express provisions of this Agreement and shall be limited to the
performance of such duties and obligations as are specifically set forth in this
Agreement, as it may be amended from time to time with the Escrow Agent's
written consent as provided in Section 5.7.
4.2. Reliance. In the performance of its duties hereunder, the Escrow Agent
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shall be entitled to rely upon any document or instrument reasonably believed by
it to be genuine and signed by MLC or the Representative. The Escrow Agent may
assume that any person purporting to give any notice in accordance with the
provisions hereof has been duly authorized to do so. 4.3. Liability. The Escrow
Agent shall not be liable for any error of judgment, or any action taken or
omitted to be taken hereunder in good faith, except in the case of its bad
faith, gross negligence or willful misconduct. The Escrow Agent shall be
entitled to consult with counsel of its choosing (including internal counsel)
and shall not be liable for any act suffered or omitted by it in good faith in
accordance with the advice of such counsel.
4.4. Disputes. In the event that the Escrow Agent shall be uncertain as to its
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duties or rights hereunder, or shall receive instructions from any party hereto
with respect to the Escrow Deposit which, in its opinion, are in conflict with
any of the provisions of this Agreement, it shall be entitled to refrain from
taking any action until such time as there has been a final determination of the
rights of MLC and the Stockholders with respect to the Escrow Deposit (or
relevant portion thereof). For purposes of this Section 4.4, there shall be
deemed to have been a final determination of the rights of MLC and the
Stockholders with respect to the Escrow Deposit (or relevant portion thereof) at
such time as Escrow Agent shall receive (i) an executed counterpart of an
agreement between the Representative and MLC or (ii) a copy of a Final Judgment
which provides for the disposition of the Escrow Deposit (or relevant portion
thereof).
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4.5. Resignation. The Escrow Agent may resign at any time and be discharged of
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the duties imposed hereunder (but without prejudice for any liability in the
case of its bad faith, gross negligence or willful misconduct hereunder) by
giving notice to the Representative and MLC at least sixty (60) business days
prior to the date specified for such resignation to take effect, in which case,
upon the effective date of such resignation:
4.5.a. all property then held by the Escrow Agent hereunder shall be
delivered by it to such person as may be designated in writing by MLC and the
Representative, whereupon the Escrow Agent's obligations hereunder shall cease
and terminate;
4.5.b. if no such person has been designated by such date, all obligations
of the Escrow Agent hereunder shall, nevertheless, cease and terminate, subject
to clause (c) below; and
4.5.c. the Escrow Agent's sole responsibility thereafter shall be to keep
all property then held by it (and to make the investments as hereinbefore
provided) and to deliver the same to the successor escrow agent designated in
writing by MLC and the Representative or, if no such successor escrow agent
shall have been so designated, in accordance with the directions of a Final
Judgment, and the provisions of Section 4.7 and Section 4.8 shall remain in
effect.
4.6. Removal of Escrow Agent. MLC and the Representative may, upon at least
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thirty (30) business days prior written notice to the Escrow Agent, dismiss the
Escrow Agent hereunder and appoint a successor. In such event, the Escrow Agent
shall promptly account for and deliver to the successor escrow agent named in
such notice the balance of the Escrow Deposit, including all investments thereof
and accrued income thereon, on the date of such accounting and delivery. Upon
acceptance thereof and of such accounting by such successor escrow agent, and
upon reimbursement to the Escrow Agent of all expenses due to it hereunder
through the date of such accounting and delivery, the Escrow Agent shall be
released and discharged from all of its duties and obligations hereunder, but
without prejudice to any liability of the Escrow Agent for its bad faith, gross
negligence or willful misconduct hereunder.
4.7. Compensation. From time to time upon the Escrow Agent's written request,
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MLC shall pay the Escrow Agent 100% of its yearly compensation of $1,200 for its
services hereunder, including reasonable legal fees and other out-of-pocket
expenses incurred in the performance of its duties and the enforcement of its
rights hereunder.
4.8. Indemnification. MLC indemnify and hold the Escrow Agent harmless against
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any loss, liability, claim, damage, injury, demand or expense, including
reasonable legal fees, arising out of or in connection with the performance of
the Escrow Agent's obligations hereunder, including the costs and expenses
incurred in connection with the collection of its fees and including the costs
and expenses of defending itself against any claim or liability arising out of
or in connection with the performance of its duties hereunder, except for any
loss, liability, claim, damage, injury, demand or expense resulting from the
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Escrow Agent's bad faith, gross negligence or willful misconduct; provided,
however, that promptly after the receipt by the Escrow Agent of notice of any
claim or the commencement of any suit, action or proceeding, the Escrow Agent
shall, if a claim of indemnification in respect thereof is to be made against
any of the other parties hereto, notify such other parties thereof in writing;
and provided, further, that the indemnifying party or parties shall be entitled,
jointly or severally and at their own expense, to participate in or assume the
defense of any such action, suit or proceeding. The right of the Escrow Agent
(or any successor escrow agent appointed hereunder) to indemnification under
this Section 4.8 shall survive the termination of this Agreement.
MISCELLANEOUS
5.1. Term. This Agreement shall continue in force until the final distribution
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of all amounts held by the Escrow Agent in the Escrow Deposit.
5.2. Notices. All notices and other communications hereunder shall be given in
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writing and delivered personally, by registered or certified mail (postage
prepaid, return receipt requested), by overnight courier (postage prepaid),
facsimile transmission or similar means, to the party to receive such notices or
communications at the address set forth below (or such other address as shall
from time to time be designated by such party to the other parties in accordance
with this Section 5.2):
(a) If to the Representative, addressed to:
Nadim Achi
President
1851 Alexander Bell Drive
Reston, VA 20191 Telecopy: (703) __________
with copy to:
Silverstein and Mullens, P.L.L.C.
1776 K Street, N.W.
Suite 800
Washington, D.C. 20006
Attn: John P. Warner, Esq.
Telecopy: (202) 452-7989
(b) If to MLC, addressed:
MLC Holdings, Inc.
11150 Sunset Hills Road Suite 110
Reston, Virginia
Attention: Kleyton L. Parkhurst
Telecopy: (703)834-5718
with a copy to:
Shaw, Pittman, Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037
Attention: John M. McDonald, Esq.
Telecopy: (202) 663-8007
(c) If to Escrow Agent, addressed:
Crestar Bank
Corporate Trust Department
919 East Main Street, 10th Floor
Richmond, VA 23219
Attention: Mary Brewer
Telecopy: (804) 782-7855
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person to
whom such notice or communication shall have been personally delivered, the
acknowledgment of receipt returned to the sender by the applicable postal
authorities or the confirmation of delivery rendered by the applicable overnight
courier service. A copy of any notice or other communication given by any party
to any other party hereto, with reference to this Agreement, shall be given at
the same time to the other parties to this Agreement.
5.4. Assignment. This Agreement shall be binding upon and inure to the benefit
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of the parties hereto and their respective representatives, successors and
assigns. Neither this Agreement nor any rights, duties or obligations hereunder
shall be assigned by any party hereto without the prior written consent of the
parties hereto; provided, however that no such consent shall be required to
confer the duties, rights, and obligations of the Representative hereunder upon
any person selected as the Representative pursuant to the Merger Agreement.
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5.5 GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT, AND THE
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RESPECTIVE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
VIRGINIA, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREUNDER.
5.6. Counterparts. This Agreement may be executed in one or more counterparts,
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each of which shall be deemed an original.
5.7. Headings. The Section headings in this Agreement are for convenience only
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and do not constitute part of this Agreement.
5.8. Amendment. This Agreement may be amended only by a writing signed by MLC,
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the Escrow Agent and the Representative.
ARBITRATION OF CERTAIN ISSUES
6.1. Scope and Procedure. In the event that the Representative believes that, as
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of any Expiration Date or as of any time after the Final Expiration Date, the
assertion by MLC of any MLC Indemnification Claim or the amount of an such MLC
Indemnification Claim asserted by MLC is not reasonable, the Representative
shall have the right to submit the issue of the reasonableness of such asserted
MLC Indemnification Claim or claim amount to arbitration as provided in this
Section 6. The parties shall mutually agree upon a single arbitrator, who shall
establish the rules applicable to the arbitration and whose decision in the
matter shall be final and binding upon all concerned. In the event that an
agreement on an arbitrator to settle the dispute is not reached within thirty
(30) days after notification of the request for arbitration, it is hereby agreed
that such breach or dispute shall be resolved by final and binding arbitration
in accordance with the commercial arbitration rules then in effect of the
American Arbitration Association; provided, however, that only a single
arbitrator shall be used.
6.2. Effect of Arbitration Decision. MLC agrees to take all action within its
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power necessary, including the execution of any written notices to the Escrow
Agent required under this Agreement, to effect the release from the Escrow
Deposit and the distribution as the Representative directs, of all funds found
by the arbitrator not be to reasonably retained on account of MLC Indemnity
Claims. Judgment upon any award rendered may be entered in any court having
jurisdiction over the person against whom such award is rendered. Any notice
served in connection with any such arbitration or entry of judgment may be
served in or out of the Commonwealth of Virginia or in such other manner as may
be permitted by said rules of any said court. Any expenses of such arbitration
shall be borne by the parties as the arbitrator shall determine; provided,
however, that each party shall bear his or her own attorney and expert witness
fees and expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above set forth.
Amendment No. 3 to
Credit Agreement As of June 30, 1998
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MLC:
MLC HOLDINGS, INC.
/s/ Phillip G. Norton
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By: Phillip G. Norton
Its: Chairman, President & CEO
ESCROW AGENT:
CRESTAR BANK
/s/ M. Brewer
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By: M. Brewer
Its: Trust Officer
REPRESENTATIVE:
Nadim Achi