ESCROW AGREEMENT
This Escrow Agreement is made by and between INDUSTRIAL DATA SYSTEMS,
CORP., a Nevada corporation ("Corporation"); XXX XXXXXXX, Trustee and XXXXXX
XXXXXXXXXXXXX, Trustee, acting on behalf of the PHD XX. 0 XXXXXXXXX
X-XXXXXXXXXXX XXXXX XXX XX XX. 0 QUALIFIED S-CORPORATION TRUST; XXX X.
XXXXXXXXXXXXX and XXXXXXX X. XXXXXXX, ("Stockholders") and XXXX X. XXXXXXXX,
("Escrow Agent"), this 15th day of August, 1995.
RECITALS
WHEREAS the parties hereto have executed and consummated that certain Stock
Acquisition Agreement dated August 15, 1955 whereby the Corporation acquired
from Trustees 8,000 shares of Class A stock, 2,000 shares of Class B stock and
451,292 shares of Class C stock of THERMAIRE, INC. in exchange for 600,000
shares of INDUSTRIAL DATA SYSTEMS, CORP. common stock, $.01 par value, and
WHEREAS it is the intent of the parties that the Corporation will
repurchase its stock from Stockholders on or before February 15, 1997 for cash
consideration of $1.00 per share or the stock exchange will be rescinded; and
WHEREAS the parties hereto desire to engage Escrow Agent to hold the below
described escrow items and disburse them in accordance with the terms of the
Stock Acquisition Agreement and this Escrow Agreement; and
WHEREAS XXXX X. XXXXXXXX has agreed to act as Escrow Agent subject to the
terms hereof;
NOW THEREFORE the parties hereto have agreed as follows:
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1. ITEMS OF ESCROW. The following items have been delivered to Escrow Agent
on the data(s) set forth following the description of each item:
(i) A true and correct copy of an agreement entitled "Stock Acquisition
Agreement" dated August 15, 1995 between the parties hereto. Received
August 18, 1995. JJM
(ii) Stock Certificate No. 3 issued to INDUSTRIAL DATA SYSTEMS, CORP.
representing 8,000 shares of Class A stock of THERMAIRE, INC.
accompanied by a stock power endorsed to XXX XXXXXXX and XXXXXX
HOLLINGSORTH, Trustees for such shares executed by INDUSTRIAL DATA
SYSTEMS, CORP.
Received August 18, 1995 JJM
(iii) Stock Certificate No. 3 issued to INDUSTRIAL DATA SYSTEMS, CORP.
representing 2,000 shares of Class B stock of THERMAIRE, INC.
accompanied by a stock power endorsed to XXX XXXXXXX and XXXXXX
XXXXXXXXXXXXX, Trustees for such shares executed by INDUSTRIAL DATA
SYSTEMS, CORP.
Received August 18, 1995 JJM
(iv) Stock Certificate No. 3 issued to INDUSTRIAL DATA SYSTEMS, CORP.
representing 316,855 shares of Class C stock of THERMAIRE, INC.
accompanied by a stock power endorsed to XXX X. XXXXXXXXXXXXX, for
such shares executed by INDUSTRIAL DATA
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SYSTEMS, CORP.
Received August 18, 1995 JJM
(v) Stock Certificate No. 4 issued to INDUSTRIAL DATA SYSTEMS, CORP.
representing 134,437 shares of Class C stock of THERMAIRE, INC.
accompanied by a stock power endorsed to XXXXXXX X. XXXXXXX, for such
shares executed by INDUSTRIAL DATA SYSTEMS, CORP.
Received August 18, 1995 JJM
(vi) Stock Certificate No. issued to XXX XXXXXXX and XXXXXX XXXXXXXXXXXXX,
Trustees of PHD NO. 1 QUALIFIED S-CORPORATION TRUST representing
118,966 share of common stock of INDUSTRIAL DATA SYSTEMS, CORP.
accompanied by a stock power endorsed to INDUSTRIAL DATA SYSTEMS,
CORP. for such shares executed by XXX XXXXXXX and XXXXXX
XXXXXXXXXXXXX, Trustees.
Received , 1995
(vii) Stock Certificate No. issued to XXX XXXXXXX and XXXXXX XXXXXXXXXXXXX,
Trustees of BH NO. 1 QUALIFIED S-CORPORATION TRUST representing 29,742
shares of common stock of INDUSTRIAL DATA SYSTEMS, CORP. accompanied
by a stock power endorsed to INDUSTRIAL DATA SYSTEMS, CORP. for such
shares executed by XXX XXXXXXX and XXXXXX XXXXXXXXXXXXX, Trustees.
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Received , 1995
(viii) Stock Certificate No. issued to XXX X. XXXXXXXXXXXXX, representing
316,855 shares of common stock of INDUSTRIAL DATA SYSTEMS, CORP.
accompanied by a stock power endorsed to INDUSTRIAL DATA SYSTEMS,
CORP. for such shares executed by XXX X. XXXXXXXXXXXXX.
Received , 1995
(ix) Stock Certificate No. issued to XXXXXXX X. XXXXXXX, representing
134,437 shares of common stock of INDUSTRIAL DATA SYSTEMS, CORP.
accompanied by a stock power endorsed to INDUSTRIAL DATA SYSTEMS,
CORP. for such shares executed by XXXXXXX X. XXXXXXX.
Received , 1995
2. DELIVERY UPON EXECUTION OF INDUSTRIAL DATA SYSTEMS, CORP. OPTION TO
REACQUIRE ITS STOCK. It is the intent of the parties that the Corporation
exercise its option to reacquire its stock under Article 10.2 of the Stock
Acquisition Agreement, accordingly, upon the delivery to Escrow Agent of
the sum of $600,000.00 U.S. in readily available funds, Escrow Agent is
authorized and directed to deliver to Corporation, escrow items (ii)
through (ix). Escrow Agent shall also immediately deliver to Stockholders,
by way of cashier's check or wire transfer, their respective interest in
the funds.
3. DELIVERY UPON FAILURE OF INDUSTRIAL DATA SYSTEMS, CORP.
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TO REACQUIRE ITS STOCK. It is the intent of the parties that in the event
Corporation fails to timely exercise its option or elects not to exercise
its option to reacquire its stock for the cash consideration specified OR
should it become financially impaired where it is apparent it will not be
able to exercise its option, then in either event, the Stock Acquisition
Agreement dated August 15, 1996, shall be rescinded and the parties shall
be relieved of any further obligations thereunder. For purposes of this
Agreement, Corporation shall be deemed financial impaired at anytime its
current assets (less inventory) is below a multiple of 1.5 times its
non-contingent current liabilities. Corporation shall provide a copy of its
monthly income statement and balance sheet to Stockholders and Escrow Agent
within thirty (30) days following the end of each calendar month.
Should Corporation fail to exercise its option to reacquire its stock
on or before February 15, 1997 OR should Corporation elect not to exercise
its option to reacquire its stock for cash OR should Corporation become
financially impaired during such period and Stockholders notify Escrow
Agent in writing of their desire to rescind the Stock Acquisition Agreement
based upon such financial impairment, in either event, Escrow Agent is
authorized and directed to immediately deliver to Stockholders, escrow
items (ii), (iii), (iv) and (v) and to Corporation escrow items (vi),
(vii), (viii) and (ix).
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4. ESCROW AGENT'S VERIFICATION PERIOD. Escrow Agent shall have a period of
5 business days following the day notice is received by any party in which
to verify authenticity of any facts and perform any action required
hereunder. Any deposit of funds with Escrow Agent must be verified as
"Collected Funds" immediately available for disbursement before Escrow
Agent's time period begins.
5. NOTICE TO ESCROW AGENT. Corporation and Stockholders hereby agree to
notify Escrow Agent in writing of any modifications whatsoever to this or
the Stock Acquisition Agreement. Corporation and Stockholders further agree
that accompanying such notice shall be a true and correct copy of any
instrument proporting to modify this or the Stock Acquisition Agreement.
Escrow Agent may conclusively rely upon any such notice, shall conclusively
evidence that these Agreements have not been modified.
6. DISPUTE BETWEEN THE PARTIES. In the event that any disputes arise
between Corporation and/or Stockholders regarding construction of this or
the Stock Acquisition Agreement or rights arising therefrom, Escrow Agent
is hereby authorized and directed to file and appropriate interpleader
action in a court of competent jurisdiction and shall be entitled to
recover from the Corporation and Stockholders, all costs, fees, and
expenses associated therewith, including reasonable attorney's fees.
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7. TERMINATION OF ESCROW DUTIES. The duties of Escrow Agent shall terminate
upon occurrence of any of the following events: (i) delivery of the escrow
items pursuant to Paragraph 2 hereof, (ii) delivery of the escrow items
pursuant to Paragraph 3 hereof, (iii) tender of the escrow items into the
registry of any court pursuant to Paragraph 6 hereof, (iv) written notice
executed by both Corporation and Stockholders or their respective
successors in interest, terminating this Escrow Agreement setting forth
instructions for delivery of the escrow items. Upon termination as above
stated Escrow Agent shall have no further liability hereunder.
8. INDEMNITY OF ESCROW AGENT. Corporation and Stockholders, on behalf of
themselves and their successors in interest, if any, individually, jointly
and severally hereby agree and shall, upon demand, indemnify, protect, save
and hold harmless Esrow Agent, its agents, servants, officers, directors,
shareholders, employees, representatives and any and all others acting by
or through the Escrow Agent, from and against any and all debts,
liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses, disbursements, including limitation, reimbursement for all
reasonable attorney fees, of whatsoever kind and nature, imposed upon,
incurred by, paid by and/or asserted against Escrow Agent, in any way or
form, directly or indirectly arising out of this Agreement, any and all
aspects hereof and/or any and all disputes which may arise between the
parties hereto or between
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the parties hereto and third persons as well as claims by third persons
against Escrow Agent, including but not limited to, claims or demands by
any governmental entity whatsoever, asserted by reason of this Agreement.
9. NOTICES. Any notice required or permitted hereunder shall be send to the
party entitled to receive the same by certified United States mail, return
receipt requested, or shall be hand delivered. Any notice send by mail
shall be deemed received five (5) business days following deposit of the
same in the United States mail, in a properly addressed wrapper with proper
postage affixed thereto.
10. CONSTRUCTION. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
EXECUTED this 18th day of August, 1995.
PHD NO. 1 QUALIFIED S-CORPORATION INDUSTRIAL DATA SYSTEMS,
TRUST CORP.
By: /s/ XXX XXXXXXX By: /s/ XXXXXXX XXXXXX
XXX XXXXXXX, Trustee XXXXXXX XXXXXX, President
/s/ XXXXXX XXXXXXXXXXXXX
XXXXXX XXXXXXXXXXXXX, Trustee
BH NO. 1 QUALIFIED S-CORPORATION /s/ XXXXXX X. XXXXXXXX
TRUST XXXXXX X. XXXXXXXX
By: /s/ XXX XXXXXXX
XXX XXXXXXX, Trustee
/s/ XXXXXX XXXXXXXXXXXXX
XXXXXX XXXXXXXXXXXXX
/s/ XXX X. XXXXXXXXXXXXX
XXX X. XXXXXXXXXXXXX
/s/ XXXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXX
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