1
ESCROW AGREEMENT
This Agreement is made as of the 3rd day of June, 1996 by and among
MASADA SECURITY, INC., a Delaware corporation ("Masada"), XXXXXXX X. XXXXX, an
individual residing in Miami, Florida ("Xxxxx"), XXXXXX X. XXXXX, an individual
residing in Miami Beach, Florida ("Moses"), XXXXX X. XXXXXXXX, an individual
residing in Miami, Florida ("Xxxxxxxx") and XXXXXX X. XXXXXXX, an individual
residing in Ft. Lauderdale, Florida ("Xxxxxxx") (Jones, Moses, Xxxxxxxx and
Xxxxxxx being referred to herein collectively as the "Sellers") and SUNTRUST
BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION (the "Escrow Agent").
WHEREAS, Masada and the Sellers are parties to a Stock Purchase
Agreement dated as of the 31st day of May, 1996 (the "Stock Purchase
Agreement") which provides for the sale by the Sellers to Masada of all of the
outstanding common stock (the "Stock") of Alarms by HRD, Inc., a Florida
corporation (the "Company"); and
WHEREAS, pursuant to Section 2.5(b)(ii) of the Stock Purchase
Agreement a portion of the purchase price for the Stock is to be held in escrow
for three separate time periods following the closing of the transactions
contemplated by the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the payment to the Escrow Agent
more particularly described on Schedule A and mutual promises set forth in this
Agreement, the parties agree as follows:
1. Appointment of Escrow Agent. Masada and the Sellers hereby
designate SunTrust Bank, Central Florida, National Association to act as Escrow
Agent hereunder and Escrow Agent hereby accepts such appointment.
2. Deposit of Escrow. Upon the execution of this Agreement,
Masada will deliver to the Escrow Agent, and the Escrow Agent will receive an
amount specified on Schedule 2 attached hereto to be held for a period of at
least three months (the "Three Months Deposit"), an amount specified on
Schedule 2 attached hereto to be held for a period of at least nine months
(the "Nine Months Deposit"), an amount specified on Schedule 2 attached hereto
to be held for a period of at least one year (the "One Year Deposit") (the
"Three Months Deposit", the "Nine Months Deposit" and the "One Year Deposit"
shall collectively be referred to as the "Deposit"). The Deposit shall be
deposited by the Escrow Agent into an interest bearing account at SunTrust
Bank, Central Florida, National Association, with interest to be added to the
Deposit.
3. Earnings on Deposit; Investment of Deposit. All income paid
or earned on the Deposit shall be deemed to have been paid or earned by the
Sellers, for income tax purposes, but shall be received and held by the Escrow
Agent and constitute part of the Deposit. The Deposit may only be invested in
obligations purchased in accordance with the Corporate Cash Management Master
Repurchase Agreement. All income received in cash from investment of Deposit,
less all
2
disbursement provided hereunder, shall be immediately reinvested by the Escrow
Agent in accordance with the terms of this Section 3.
4. Taxes and Charges on Escrow Property. The Sellers shall
disclose on the signature page hereof to the Escrow Agent each of their social
security numbers, and the Escrow Agent shall annually issue a Form 1099 to each
Seller reflecting the amount of income earned on the Deposit for such
applicable period by such Seller.
5. Disposition of Escrow.
(a) On or after September 1, 1996, Masada and the Sellers
shall jointly give signed written notice ("Payment Notice") to Escrow Agent
which Payment Notice shall list the parties entitled to the Three Months
Deposit and a breakdown of the amounts each party is entitled to. Upon receipt
of the Payment Notice, the Escrow Agent shall pay to the appropriate parties
the Three Months Deposit within two days after the receipt of such Payment
Notice. The Payment Notice shall set forth a brief description of the basis
entitling such parties to be paid the Three Months Deposit.
(b) On or after March 3, 1997, Masada and the Sellers
shall jointly give a Payment Notice to Escrow Agent which Payment Notice shall
list the parties entitled to the Nine Months Deposit and a breakdown of the
amounts each party is entitled to. Upon receipt of the Payment Notice, the
Escrow Agent shall pay to the appropriate parties the Nine Months Deposit
within two days after the receipt of such Payment Notice. The Payment Notice
shall set forth a brief description of the basis entitling such parties to be
paid the Additional Deposit.
(c) On or after June 3, 1997, Masada and the Sellers
shall jointly give a Payment Notice to Escrow Agent which Payment Notice shall
list the parties entitled to the One Year Deposit and a breakdown of the
amounts each party is entitled to. Upon receipt of the Payment Notice, the
Escrow Agent shall pay to the appropriate parties the One Year Deposit within
two days after the receipt of such Payment Notice. The Payment Notice shall
set forth a brief description of the basis entitling such parties to be paid
the One Year Deposit.
(d) If the Escrow Agent receives a Payment Notice
pursuant to Section 3(a), 3(b) or 3(c) which is (i) signed by Masada but not by
at least three out of four of the Sellers, or (ii) signed by at least three out
of four of the Sellers but not by Masada, the Escrow Agent shall give notice,
along with a copy of such Payment Notice, to the other party (the "Non-Signing
Party"). If the Non-Signing Party gives written notice to the Escrow Agent of
its agreement with the Payment Notice, or fails to respond to the notice from
the Escrow Agent, within seven days after the date of such notice, then the
Escrow Agent shall pay to Seller (or its designee) the Escrowed Funds, within
two days after the expiration of such seven day period. If the Non-Signing
Party gives written notice to the Escrow Agent of its disagreement with the
Payment Notice within such seven day period, then the Escrow Agent shall pay
the undisputed portion, if any, of the Deposit, but shall not pay any portion
of the Deposit subject to dispute, which disputed
2
3
funds shall continue to be held by the Escrow Agent pending resolution of such
dispute and further direction from Masada and the Sellers.
(e) If a Non-Signing Party shall be determined by (i) a
court of competent jurisdiction, or (ii) a written release between the parties,
to have acted in a frivolous manner and in bad faith, the other party(ies)
shall be entitled to reimbursement of all its reasonable costs incurred in
connection with the Payment Notice (including, without limitation, reasonable
attorney's fees).
6. Provisions Relating to Escrow Agent.
(a) The Escrow Agent shall be protected in acting upon
any written notice, statement, certificate, waiver, consent or other instrument
or document which the Escrow Agent believes to be genuine.
(b) It is understood and agreed that the duties of the
Escrow Agent hereunder are purely ministerial in nature and that the Escrow
Agent shall not be liable for any error or judgment, or for any act done or
step taken or omitted in good faith, or for anything which the Escrow Agent may
do or refrain from doing in connection with this Agreement, except that the
Escrow Agent shall be liable for its own gross negligence or willful
misconduct. In no event shall the Escrow Agent be required to account for any
application of funds subsequent to disposition thereof in accordance with this
Agreement by the Escrow Agent. The Escrow Agent shall not be liable for any
consequential or incidental damages arising from its actions hereunder.
(c) The Escrow Agent may consult with and obtain advice
from legal counsel in the event of any dispute or question as to the
construction of any of the provisions hereof or the Escrow Agent's duties
hereunder, the Escrow Agent shall incur no liability and shall be fully
protected in acting in accordance with the opinion of its legal counsel. The
Escrow Agent shall not be responsible in any manner whatsoever for any failure
or inability of any of the other parties hereto, or anyone else, to perform or
comply with any provisions of this Agreement or any other agreement or
undertaking.
(d) If at any time the Escrow Agent shall be in doubt as
to any of its duties under this Agreement, the Escrow Agent may apply to the
Court for a determination of such duties, and the Escrow Agent shall incur no
liability therefor.
(e) If at any time the Escrow Agent shall receive
conflicting notices, claims, demands or instructions with respect to the
Deposit and the interest earned thereon, or if for any other reason it shall be
unable in good faith to determine the party or parties to whom the Deposit and
the interest earned thereon are to be distributed, the Escrow Agent may refuse
to make such disbursement until the Escrow Agent shall have received
instructions in writing signed by all of the other parties hereto, or until
directed by a final order of the Court (in an action brought by the
3
4
Escrow Agent hereunder or by any other person), whereupon the Escrow Agent
shall make such disbursement in accordance with such instructions or order.
(f) The Escrow Agent may resign and be discharged from
its duties or obligations hereunder by giving 10 days notice in writing of such
resignation. The Escrow Agent may be removed and a successor escrow agent
appointed by agreement of the other parties to this Agreement. The Escrow
Agent shall comply with the joint instructions of the other parties to this
Agreement with respect to the disposition of the Deposit and the interest earned
thereon upon its resignation or removal, provided that if the other parties to
this Agreement have not designated a successor escrow agent to which Deposit and
the interest earned thereon are to be delivered, the Escrow Agent may either
continue to hold the Deposit and such interest hereunder or place the Deposit
and such interest into the custody of the Court. If the Escrow Agent gives
notice of resignation, the other parties will use their best efforts to agree
upon and designate a successor escrow agent prior to the date on which the
Escrow Agent's resignation becomes effective.
(g) The Escrow Agent shall not be required to take any
action hereunder involving incurrence of expense to third parties unless
payment shall be provided for in a manner satisfactory to the Escrow Agent.
7. Termination. The Escrow Agent will be deemed to be terminated
as escrow agent and released from its obligations hereunder on the earlier to
occur of its resignation pursuant to Section 6(f) above or the time at which
the Escrow Agent delivers the Deposit and the interest thereon in accordance
with the terms of this Agreement.
8. Notices. All notices provided for in this Agreement shall be
in writing and shall be addressed to the parties as follows:
IF TO THE ESCROW AGENT: SunTrust Bank, Central Florida, National Association
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Corporate Trust Division
Telecopy: (000) 000-0000
IF TO MASADA: Masada Security, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
4
5
WITH A COPY TO: Xxxx & Xxxxxx
3100 SouthTrust Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: W. Xxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
IF TO THE SELLERS:
------------------------------------------
------------------------------------------
Attn:
------------------------------------------
Telecopy:
------------------------------------------
WITH A COPY TO: Zack, Xxxxxxx, Xxxxxxxxx, Xxxxxx & Xxxxxx, P.A.
One International Place
000 Xxxxxxxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as may be designated by notice. Notices delivered by
(i) United States mail shall be deemed received by the addressee on the third
business day after deposit if sent by postage prepaid certified or registered
mail, return receipt requested, or (ii) telecopier transmission shall be deemed
delivered on the date of transmission if followed by a copy sent by certified
mail, postage prepaid, or private overnight delivery service on the date of
transmission; provided, that any party may act on notice delivered by
telecopier transmission regardless of whether confirmation is delivered.
9. General. The waiver or failure of either party to exercise in
any respect any right provided for in this Agreement shall not be deemed a
waiver of any further or future right under it. This Agreement shall be
governed by, subject to and construed according to the laws of the State of
Florida and venue for any action relating to this Agreement shall be in any
court of competent jurisdiction in Dade County in the State of Florida. Rights
and obligations under this Agreement shall be binding upon, and inure to the
benefit of, successors and assigns of the parties. This Agreement may be
amended only be written agreement signed by the Escrow Agent, Masada and the
Sellers. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Confirmation of execution by telefacsimile of a
facsimile signature page shall be binding upon that party so confirming.
5
6
10. Matters to be Arbitrated. Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
binding arbitration in accordance with Section 11 of the Stock Purchase
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date and year first above written.
MASADA SECURITY, INC.
By: /s/ ???
------------------------------------------
Title: Vice President
---------------------------------------
/s/ Xxxxxxx X. Xxxxx
---------------------------------------------
XXXXXXX X. XXXXX
Social Security No. ###-##-####
--------------------------
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
XXXXXX X. XXXXX
Social Security No.
--------------------------
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
XXXXX X. XXXXXXXX
Social Security No. ###-##-####
--------------------------
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
XXXXXX X. XXXXXXX
Social Security No. ###-##-####
--------------------------
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
Escrow Agent
By: /s/ ???
------------------------------------------
Title: Senior Vice President
---------------------------------------
6
