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ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made effective as of the 9th
day of January, 1996, by and among MASADA SECURITY, INC., a Delaware
corporation ("Purchaser"); XXXX XXXXXXXXX and XXXX XXXXXXXXX, husband and wife
residing in Austin, Texas (collectively the "Seller"); and SOUTHTRUST BANK OF
ALABAMA, N.A. ("Escrow Agent").
RECITALS
WHEREAS, Seller and Purchaser have entered into a Stock Purchase
Agreement dated January 8, 1996 (the "Purchase Agreement"), pursuant to which
the Seller agrees to sell and Purchaser agrees to purchase all of the stock in
Kristynik Security Systems, Inc., a Texas corporation, as more fully described
therein;
WHEREAS, the Purchase Agreement requires Escrow Agent to hold
$74,177.25 of the purchase price in escrow for approximately six months pending
certain possible adjustments in accordance with the Purchase Agreement and
$203,023.64 of the purchase price in escrow for approximately one year pending
certain possible adjustments in accordance with the Purchase Agreement;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. ESCROW AGENT: Purchaser and Seller hereby designate and
appoint the Escrow Agent as the Escrow Agent for the purposes herein set forth.
The Escrow Agent hereby accepts such appointment on the terms and conditions
herein set forth. Escrow Agent is not a party to and is not bound by any
agreement between Purchaser and Seller except this Agreement.
2. DEPOSIT IN ESCROW:
(a) Escrow Agent hereby acknowledges the receipt from
Purchaser of ________________________ ($74,177.25) Dollars (the "Six Months
Escrowed Funds") and of ________________________ ($203,023.64) Dollars (the
"One Year Escrowed Funds") (the Six Months Escrowed Funds and the One Year
Escrowed Funds are collectively referred to as the "Escrowed Funds"). Escrow
Agent agrees to hold and dispose of said sum, and all interest and gains earned
thereon, in accordance with all the terms, conditions and provisions of this
Agreement. Escrow Agent acts hereunder as a depository. All deposits are
warranted by Purchaser to be valid deposits.
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(b) Escrow Agent shall invest the Escrowed Funds as
directed by the joint written instructions of Seller and Purchaser. All
earnings received by Escrow Agent as a result of such investment shall be added
to the Escrowed Funds. In the absence of any joint direction by Seller and
Purchaser to the contrary, Escrow Agent, in its discretion, shall invest all
portions of the Escrowed Funds in certificates of deposit (90 day), and/or
money market funds.
3. DISTRIBUTIONS:
(a) On or after July 8, 1996, Purchaser and Seller shall
jointly give signed written notice ("Payment Notice") to Escrow Agent which
Payment Notice shall list the parties entitled to the Six Months Escrowed Funds
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 Six
Months Escrowed Funds within ten 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 Six Months Escrowed Funds.
(b) On or after Xxxxxx 0, 0000, Xxxxxxxxx and Seller
shall jointly give a Payment Notice to Escrow Agent which Payment Notice shall
list the parties entitled to the One Year Escrowed Funds 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 Escrowed Funds
within ten 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 Escrowed Funds.
(c) If the Escrow Agent receives a Payment Notice
pursuant to Paragraph 3(a) or 3(b) which is (i) signed by Purchaser but not by
Seller, or (ii) signed by Seller but not by Purchaser, 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 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 ten days after the expiration of such seven day period. If the
Non-Signing Party gives 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 Escrowed Funds, but shall not pay any
portion of the Escrowed Funds subject to dispute, which disputed funds shall
continue to be held by the Escrow Agent pending resolution of such dispute and
further direction from Purchaser and Seller, or from an authorized arbitrator.
(d) In the event of any disagreement resulting in adverse
claims or demands being made in connection with the subject matter of this
Agreement, or in the event that the Escrow Agent is in doubt as to what action
it should take hereunder, the Escrow Agent may, at its option, refuse to comply
with any claim or demand on it, or refuse to take any other action hereunder,
so long as such disagreement continues or such doubt exists, and in any such
event,
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the Escrow Agent shall not be or become liable in any way or to any person for
its failure or refusal to act, and the Escrow Agent shall be entitled to
continue to so refrain from acting until (i) the rights of all parties have
been fully and finally decided by an arbitrator selected in accordance with
Section 2.7(c) of the Purchase Agreement, which is incorporated herein by this
reference, or (ii) all differences shall have been decided and all doubt
resolved by agreement between Purchaser and Seller, and the Escrow Agent shall
have been notified thereof in a writing signed by Purchaser and Seller. In
addition to the foregoing remedies, the Escrow Agent is hereby authorized in
the event of any doubt as to the course of action it should take under this
Agreement, to petition the United States District Court for the Northern
District of Alabama and/or the Circuit Court in and for Jefferson County,
Alabama for instructions or to interplead the funds or assets so held into such
court. For purposes of this Agreement the parties agree to the jurisdiction of
either of said courts over their persons as well as the Escrowed Funds and
agree that service of process by certified mail, return receipt requested, to
the address set forth in Paragraph 9 below shall constitute adequate service.
Purchaser and Seller hereby agree to indemnify and hold the Escrow Agent
harmless from any liability or losses occasioned thereby and to pay any and all
of its costs, expenses, and reasonable attorney's fees incurred in any such
action and agree that on such petition or interpleader action that the Escrow
Agent, its servants, agents, attorneys, employees and officers will be relieved
of further liability. Escrow Agent is hereby given a lien upon, security
interest in, and right of setoff against, the Escrowed Funds to secure Escrow
Agent's rights to payment or reimbursement for any and all costs, expenses, and
fees incurred by it hereunder.
(e) If a Non-Signing Party shall be determined by (i) a
court of competent jurisdiction, (ii) an arbitrator's binding award, or (iii) a
written release between the parties, to have acted in a frivolous manner and in
bad faith, the other party shall be entitled to reimbursement of all its
reasonable costs incurred in connection with the Payment Notice (including,
without limitation, reasonable attorney's fees).
4. TERMINATION: This Agreement shall terminate on the date that
no Escrowed Funds continue to be held by the Escrow Agent.
5. LIMITATIONS ON LIABILITY OF ESCROW AGENT: In order to induce
the Escrow Agent to act as the escrow agent under this Agreement, Seller and
Purchaser agree as follows:
(a) The Escrow Agent may rely upon and shall be protected
in acting or refraining from acting upon any written notice, instruction or
request received by the Escrow Agent and believed by the Escrow Agent in good
faith to be genuine and signed by Seller and Purchaser. The Escrow Agent shall
not be responsible for the sufficiency, correctness, genuineness or validity of
any notice or instructions delivered to the Escrow Agent. The Escrow Agent
shall not be liable for any error of judgment, or any act or omission under
this Agreement taken in good faith, except for the Escrow Agent's own gross
negligence or willful misconduct.
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(b) Seller and Purchaser shall jointly and severally
indemnify and hold harmless the Escrow Agent from and against any claims,
costs, damages, reasonable attorney's fees, expenses, obligations or charges
made against the Escrow Agent by reason of its action or failure to act in
connection with any of the transactions contemplated by this Agreement, unless
caused by the Escrow Agent's gross negligence or willful misconduct.
(c) In the event the Escrow Agent receives or becomes
aware of conflicting instructions, demands or claims with respect to this
Agreement or the sums deposited hereunder, the Escrow Agent shall have the
right to discontinue any and all further acts until such conflict is resolved
to the Escrow Agent's satisfaction. The Escrow Agent shall have the further
right to commence or defend any action or proceeding for the termination of
such conflict. Seller and Purchaser jointly and severally agree to pay all
costs, damages, judgments and expenses, including reasonable attorneys' fees,
suffered or incurred by the Escrow Agent in connection with such action or
proceeding. In the event the Escrow Agent files a suit in interpleader, the
Escrow Agent shall thereupon be fully released and discharged from all further
obligations imposed by this Agreement with respect to sums deposited with a
court of competent jurisdiction pursuant to such suit in interpleader.
6. ESCROW FEES: The Escrow Agent shall not be entitled to
receive a fee for serving as the Escrow Agent; provided, however, that the
Escrowed Funds shall be subject to the Escrow Agent's standard fees and service
charges as provided in the Escrow Agent's Rules and Regulations Governing
Deposit Accounts.
7. RESIGNATION: The Escrow Agent may resign at any time upon
giving the parties hereto 30 days advance written notice to that effect. In
such event, the successor escrow agent shall be mutually selected by Seller and
Purchaser. However, in no instance shall the Escrow Agent's resignation be
effective until a successor escrow agent has agreed to act but, Escrow Agent
shall have the right to discontinue any and all future acts until such
successor escrow agent has agreed to act.
8. INTEREST INFORMATION: Unless otherwise agreed to in writing
by both parties: (i) the Escrow Agent shall list the social security number of
the Seller for one-half of the Escrowed Funds for federal, state and local tax
purposes and for other necessary purposes; (ii) the Escrow Agent shall list the
employer tax identification number of Purchaser for one-half of the Escrowed
Funds for federal, state and local tax purposes and for other necessary
purposes; and (iii) any and all of Escrow Agent's fees and charges as provided
for in Paragraph (6) of this Agreement shall first be charged against interest
earned and then charged against principal.
9. NOTICE: Any notice or other communication hereunder shall be
in writing and shall be (i) delivered by hand, (ii) delivered by an overnight
courier service with guaranteed next day delivery, (iii) sent by telecopy, or
(iv) mailed by certified mail, postage prepaid, return receipt requested, and
addressed as follows:
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IF TO PURCHASER AT:
Masada Security, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
FACSIMILE: 0-000-000-0000
WITH COPY TO:
Xxxx & Xxxxxx
3100 SouthTrust Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000
IF TO SELLER AT:
0000 Xxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx and Xxxx Xxxxxxxxx
FACSIMILE: (000) 000-0000
WITH COPY TO:
Xxxxxx, Xxxxxx & Xxxxxxxxx, P. C.
000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxx Xxxxxxxxx, Jr., Esq.
FACSIMILE: (000) 000-0000
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IF TO ESCROW AGENT:
SouthTrust Bank of Alabama, N.A.
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
FACSIMILE: (000) 000-0000
or to such other address as may have been furnished to the party giving notice
by the party to whom notice is to be given. Notice shall be deemed given upon
the earlier of (i) three days after deposit in the U.S. Mail by certified mail,
or (ii) actual receipt thereof.
10. MISCELLANEOUS:
(a) SUCCESSORS AND ASSIGNS: This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
(b) COUNTERPARTS: This Agreement may be executed in any
number of counterparts, each of which shall be an original, but which together
shall constitute one and the same instrument.
(c) GOVERNING LAW: This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of
Alabama.
(d) AMENDMENT: This Agreement may not be modified,
changed, waived or terminated, in whole or in part, except by a supplemental
agreement signed by all of the parties hereto.
(e) HEADINGS: The headings assigned to Paragraphs of
this Agreement are for convenience only and shall be disregarded in construing
this Agreement.
(f) NO ASSIGNMENT: Neither Seller nor Purchaser shall
pledge, hypothecate or otherwise transfer or attempt to transfer any right,
title or interest hereunder without the prior written consent to the other
party hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
MASADA SECURITY, INC.
By: /s/
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Its: VP Corp Development
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Tax I.D. No.: 63 111 0400
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
Tax I.D. No.: ###-##-####
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
Tax I.D. No.: ###-##-####
SOUTHTRUST BANK OF ALABAMA, N.A.
By: Xxxxxx X. Xxxxxxxxx
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Its: Senior Vice President
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