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TAX INDEMNITY ESCROW AGREEMENT
This Escrow Agreement made this 2nd day of November, 1995, by and among
The 593 Corporation, d/b/a Classic Alarms, a Louisiana corporation ("Seller"),
Masada Security, Inc., a Delaware corporation ("Buyer"), and SouthTrust Bank of
Alabama, N.A. (the "Escrow Agent").
STATEMENT OF FACTS
1. Buyer and Seller are parties to that certain Asset Purchase Agreement
dated as of the date hereof (the "Purchase Agreement"). All capitalized terms
used herein, but not otherwise defined herein, shall have the meanings given
them in the Purchase Agreement.
2. Pursuant to the Purchase Agreement, Buyer agreed to purchase all of
the Assets to be Acquired.
3. Pursuant to the Purchase Agreement, Buyer and Seller agreed that
Buyer would deposit a portion of the Purchase Price with the Escrow Agent to
provide a source to fund the release or other disposition of any tax liens on
the Assets to be Acquired.
NOW, THEREFORE, in consideration of the Statement of Facts and the
mutual covenants and agreements contained herein, the parties, intending to be
legally bound, covenant and agree as follows:
1. Establishment of Escrow Fund.
1.1 Simultaneously with the execution and delivery of this Escrow
Agreement, Buyer shall deposit the sum of One Hundred Forty-Six Thousand Four
Hundred Seventy-Nine Dollars and Six Cents ($146,479.06) (which deposit,
together with interest accrued thereon, shall be referred to as the "Escrow
Fund") with the Escrow Agent.
2. Appointment of Escrow Agent.
2.1 Buyer and Seller hereby appoint the Escrow Agent to serve as escrow
agent under the terms of this Escrow Agreement, and the Escrow Agent hereby
accepts such appointment.
2.2 The Escrow Agent agrees to place the Escrow Fund in an interest bearing
account, to bear interest at the highest rate offered on accounts available for
immediate withdrawal.
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2.3 The Escrow Agent further agrees to carry out the provisions of this
Escrow Agreement on its part to be performed.
3. Purpose of the Escrow Fund.
3.1 The purpose of the Escrow Fund is to deposit a designated portion of
the Purchase Price to provide a source to fund any Chip Change Credit, any
Purchase Price Deduct, the release or other disposition of any tax liens on the
Assets to be Acquired and any indemnification obligation of Seller pursuant to
Section 8.1 of the Purchase Agreement.
4. Distribution of the Escrow Fund.
4.1 The Escrow Agent shall disburse the Escrow Fund, in whole or in part,
(i) upon receipt of joint written instructions executed on behalf of Buyer and
Seller, (ii) upon receipt of Buyer's written instructions accompanied by a
written certification from Buyer that such distribution is to be paid to a
taxing authority pursuant to a negotiated settlement to release one or more tax
liens on the Assets to be Acquired existing at Closing or to avoid foreclosure
on the Assets to be Acquired pursuant to any such tax liens, (iii) on the last
day of the 36th month after the date hereof, (iv) at the direction of the
arbitrators to be selected pursuant to Section 11.3 of the Purchase Agreement
or (v) at the direction of a court of competent jurisdiction.
The Escrow Agent may, at any time, deposit the Escrow Fund with such
arbitrators or court, and upon such deposit, the Escrow Agent shall be relieved
of any further liability or responsibility with respect thereto.
5. Escrow Agent.
5.1 The Escrow Agent shall not in any way be bound or affected by a notice
of modification or cancellation of this Escrow Agreement unless notice thereof
is given to the Escrow Agent by both Seller and Buyer, nor shall the Escrow
Agent be bound by any modification of its obligations hereunder unless the same
shall be consented to by the Escrow Agent in writing. The Escrow Agent shall
be entitled to rely upon any judgment, certification, demand or other writing
delivered to it hereunder without being required to determine the authenticity
or the correctness of any facts stated therein, the propriety or validity of
the service thereof, or the jurisdiction issuing any judgment.
5.2 The Escrow Agent shall not be under any duty to give the property held
by it hereunder any greater care than it gives its own similar property.
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5.3 The Escrow Agent may act in reliance upon any instrument or signature
believed by it to be genuine, and it may assume that any person purporting to
give any notice or make any statement in connection with the provisions hereof
has been duly authorized to do so.
5.4 The Escrow Agent may act in reliance upon advice of counsel in
reference to any matter connected herewith, and shall not be liable for any
mistake of fact or error of judgment, or for any act or omission of any kind
except to the extent that such act or omission constitutes willful misconduct,
gross negligence or fraud.
5.5 The Escrow Agent shall not have any responsibility for the payment of
taxes except with funds furnished to the Escrow Agent for that purpose.
5.6 This Escrow Agreement sets forth exclusively the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. Except as
otherwise expressly provided herein, the Escrow Agent shall not refer to, and
shall not be bound by, the provisions of any other agreement.
5.7 Except with respect to claims based upon the Escrow Agent's willful
misconduct, gross negligence or fraud, Buyer shall indemnify and hold harmless
the Escrow Agent from any claims made against the Escrow Agent by Seller
arising out of or relating to this Escrow Agreement, and Seller shall indemnify
and hold the Escrow Agent harmless from any claims made against the Escrow
Agent by Buyer arising out of or relating to this Escrow Agreement. Buyer and
Seller jointly and severally shall indemnify and hold the Escrow Agent harmless
from any claim made by any third party arising out of or relating to this
Escrow Agreement, such indemnification to include all costs and expenses
incurred by the Escrow Agent, including reasonable attorneys' fees.
5.8 The Escrow Agent shall not be required to institute or defend any
action involving any matters referred to herein or which affect it or its
duties or liability hereunder, unless or until requested to do so by any party
to this Escrow Agreement and then only upon receiving full indemnity, in
character satisfactory to the Escrow Agent, against any and all claims,
liabilities and expenses, including reasonable attorneys' fees, in relation
thereto.
5.9 Upon termination of this Escrow Agreement, the Escrow Agent may
request from Buyer and Seller such additional assurances, certificates,
satisfactions, releases and/or other documents as it may deem appropriate to
evidence the termination of this Escrow Agreement.
5.10 The Escrow Agent shall be entitled to receive a fee for serving as
the Escrow Agent hereunder equal to $250 per year and $25.00 per transaction,
to be shared equally by Buyer and Seller.
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5.11 Buyer and Seller acknowledge that it may be necessary, for federal
income tax or other purposes, for the Escrow Agent to know the employer
identification numbers ("EIN") of Buyer and Seller. Buyer represents that its
EIN is 00-0000000. Seller represents that its EIN is 00-000-0000.
6. Notices.
6.1 All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered when delivered (i)
personally, (ii) by registered or certified mail, (iii) by legible facsimile
transmission or (iv) by overnight courier (fare prepaid), in all cases
addressed as follows:
If to Buyer, to: with a copy to:
Masada Security, Inc. Xxxxxxxx Xxxxxxxxx Professional
Attention: Xxxxxxx X. Xxxxxxxxx Corporation
000 00xx Xxxxxx Xxxxx, Xxx. 000 Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx, XX 00000 00xx Xxxxx, 000 Xxxxx Xxxxxx
Telecopy: 000-000-0000 Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
If to Seller, to: with a copy to:
Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxx
President Suite 2960, Energy Centre
The 593 Corporation 0000 Xxxxxxx Xxxxxx
0000 Xxxxx X-00 Xxxxxxx Xxxx Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Xxxxxxxx, Xxxxxxxxx 00000
Telecopy: 000-000-0000 Telecopy: 000-000-0000
If to the Escrow Agent, to:
SouthTrust Bank of Alabama, N.A.
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telecopy: 000-000-0000
or to such address as such party may indicate by a notice delivered to the
other parties. Notice shall be deemed received the same day (when delivered
personally), five (5) days after mailing
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(when sent by registered or certified mail), or the next business day (when
sent by facsimile transmission or when delivered by overnight courier). Any
party to this Escrow Agreement may change its address to which all
communications and notices may be sent hereunder by addressing notices of such
change in the manner provided.
7. Miscellaneous.
7.1 This Escrow Agreement and the rights and the obligations of the
parties shall be governed by and construed and enforced in accordance with the
laws of the State of Alabama without regard to its conflicts of law provisions.
7.2 The parties: (i) agree that any legal action concerning any and all
claims, disputes, or controversies arising out of or relating to this Escrow
Agreement shall only be commenced in New Orleans, Louisiana; (ii) consent to
the jurisdiction of the arbitrators selected pursuant to the Purchase
Agreement; and (iii) agree to accept service of any pleadings (and such service
shall be valid), if made by certified or registered mail, return receipt
requested, to the respective parties at the addresses set forth in Section 6 of
this Escrow Agreement. IN THE EVENT OF ANY COURT PROCEEDING HEREUNDER, THE
PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY.
7.3 The parties agree to execute and deliver any and all documents and to
take such further action as shall be reasonably required to effectuate the
provisions of this Escrow Agreement.
7.4 This Escrow Agreement contains the entire understandings of the
parties with respect to the subject matter herein contained and shall not be
modified except by a writing signed by all the parties.
7.5 This Escrow Agreement shall inure to the benefit of and be binding
upon the parties and their respective successors and assigns. Seller and the
Escrow Agent cannot assign this Escrow Agreement, but Buyer shall be permitted
to assign this Escrow Agreement and its rights and obligations hereunder to its
affiliates, successors and assigns.
7.6 There shall be no presumption against any party on the ground that
such party was responsible for preparing this Escrow Agreement or any part
hereof. The word "including" means "including without limitation."
7.7 This Escrow Agreement may be executed in one or more counterparts,
each of which when taken together shall comprise one instrument. Delivery of
executed signature pages by facsimile transmission shall constitute effective
and binding execution and delivery.
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IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed and delivered as of the day and year first above written.
THE 593 CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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MASADA SECURITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
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SOUTHTRUST BANK OF ALABAMA, N.A.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Sr. V.P.
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