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ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made effective as of the 5th
day of May, 1995, by and among Masada Security, Inc., a Delaware Corporation
("Purchaser"); Global Security, Inc., formerly known as Global Security Systems
of Virginia, Inc., a Virginia corporation (collectively referred to as
"Seller"); and SouthTrust Bank of Alabama, N.A. ("Escrow Agent").
RECITALS
WHEREAS, Seller and Purchaser have entered into an Asset Purchase
Agreement dated April 14, 1995 (the "Purchase Agreement"), pursuant to which the
Seller agrees to sell and Purchaser agrees to purchase all of the customer
accounts and certain other assets of Seller related to the monitoring of
security alarm systems in Richmond, Virginia, as more fully described therein;
WHEREAS, the Purchase Agreement requires Escrow Agent to hold
$53,937.10 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 the sum of Fifty-three-Thousand-nine-hundred-thirty-seven and
10/100 ($53,937.10) Dollars (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.
(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.
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3. DISTRIBUTIONS:
(a) On or after May 5, 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 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 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 Escrowed Funds.
(b) If the Escrow Agent receives a Payment Notice 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.
(c) 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,
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
3(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
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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.
(d) 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.
(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.
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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 employer tax identification
number of the Seller for federal, state and local tax purposes and for other
necessary purposes; and (ii) all interest earned shall be the sole and exclusive
property of the Seller; 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:
IF TO PURCHASER AT:
Masada Security, Inc.
000 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
FACSIMILE: 0-000-000-0000
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WITH COPY TO:
Xxxx & Xxxxxx
000 Xxxxx 00xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000
IF TO SELLER AT:
Global Security, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxxx
FACSIMILE: (000) 000-0000
WITH COPY TO:
Xxxxxxxx, Xxxxxx & Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, III, Esq.
FACSIMILE: (000) 000-0000
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
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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/ Xxxxx X. Xxxxxxx
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Its: President
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GLOBAL SECURITY, INC.
(f/k/a GLOBAL SECURITY
SYSTEMS OF VIRGINIA, INC.)
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Its: President
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Tax I.D. No.: 00-0000000
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SOUTHTRUST BANK OF ALABAMA,
N.A
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: Senior Vice President
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May 5, 1995
SouthTrust Bank of Alabama, N.A.
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
RE: INVESTMENT OF ESCROWED FUNDS
Dear Xx. Xxxxxxxxx:
Pursuant to an Escrow Agreement dated May 5, 1995 by and between Masada
Security, Inc., a Delaware corporation ("Masada"), your bank and us, Global
Security, Inc. ("Global"), a Virginia corporation, SouthTrust Bank of Alabama,
N.A. ("Bank") is holding in escrow certain funds which are being paid by
Masada to Global.
Please be advised that it is the desire of Global that all such funds be
held in a one (1) year certificate of deposit with the one (1) year term.
Sincerely,
Global Security, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
President
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MASADA SECURITY, INC.
000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
(000) 000-0000/fax (000) 000-0000
May 5, 1995
Xx. Xxxx Xxxxxxxxx
SouthTrust Bank
Birmingham, Alabama
Re: Investment of Global Security, Inc./Masada Security, Inc. Escrow Account
Dear Xxxx:
I concur with investment instructions provided by Xxx Xxxxxxxx of Global
Security in the letter dated May 5, 1995. The funds are to be invested in a
one year Certificate of Deposit with a one year term.
Please do not hesitate to call me if you have questions or require additional
information.
Sincerely,
Xxxxxxx X. Xxxxxxxxx
Vice President of Corporate Development
