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ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made effective as of the 28th
day of March, 1996, by and among MASADA SECURITY, INC., a Delaware corporation
("Purchaser"); XXXXXX SENDER, AS TRUSTEE (the "Trustee") for the bankruptcy
estates of InterCap Funds Joint Venture, a Colorado general partnership
("Venture"), Security Data Group of California, Inc., a California corporation
("SDG"), IMIF IV-C Service Corp., a Colorado corporation ("Service") (the
bankruptcy estates of Venture, SDG, and Service are collectively referred to as
"Sellers"), and SOUTHTRUST BANK OF ALABAMA, N.A. ("Escrow Agent").
RECITALS
WHEREAS, Trustee and Purchaser have entered into an Asset Purchase and
Sale Agreement dated on or about March 27, 1996 (the "Purchase Agreement"),
pursuant to which the Trustee agrees to sell and Purchaser agrees to purchase,
subject to the approval from the United States Bankruptcy Court for the
District of Colorado ("Bankruptcy Court"), the customer accounts and certain
other assets of Sellers related to the monitoring of security alarm systems, as
more fully described therein;
WHEREAS, Section 1.6(b)(iv) of the Purchase Agreement provides that
the Purchaser shall deposit into escrow a "Holdback Amount" associated with the
purchase of Sellers' "Acquired Assets," which deposit shall be held by Escrow
Agent pursuant to this 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 Trustee 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 Trustee except this Agreement.
2. DEPOSIT IN ESCROW:
(a) Escrow Agent hereby acknowledges the receipt from
Purchaser of the sum of the Holdback Amount which equals $4,946,599.01
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 in U.S.
Treasury Bills or other direct obligations issued by or guaranteed by, as to
principal and interest, the United States of America in each case with a
maturity equal to or less than thirty (30) days. All investment and
reinvestment of the Escrowed Funds in said U.S. Treasury Bills or other direct
obligation shall be done to the nearest $1,000; any balance of the Escrowed
Funds not so invested shall be held in a money market account. All earnings
received by Escrow Agent as a result of such investment shall be added to the
Escrowed Funds.
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3. DISTRIBUTIONS:
(a) At any time and from time to time, Purchaser and
Trustee shall jointly give signed written notice ("Payment Notice") to Escrow
Agent which Payment Notice shall list the parties entitled to all or a portion
of 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 indicated amount of the Escrowed Funds within three
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 Trustee, or (ii) signed by Trustee 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
the parties indicated on the Payment Notice the indicated amount of 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 Trustee, or from the
Bankruptcy Court.
(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 through arbitration, as
contemplated by the Purchase Agreement, by a court of competent jurisdiction,
or by the Bankruptcy Court, or (ii) all differences shall have been decided and
all doubt resolved by agreement between Purchaser and Trustee, and the Escrow
Agent shall have been notified thereof in a writing signed by Purchaser and
Trustee. 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 Trustee 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.
(d) If a Non-Signing Party shall be determined by (i) a
court of competent jurisdiction, (ii) the Bankruptcy Court, or (iii) a written
release between the parties, to have acted in a frivolous manner and in bad
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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, Trustee 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 Trustee 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) Trustee 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. Trustee 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 thirty days advance written notice to that effect.
In such event, the successor escrow agent shall be mutually selected by Trustee
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 Venture for federal, state and local tax purposes and
for other necessary purposes; and (ii) 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.
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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: WITH COPY TO:
Masada Security, Inc. Xxxx & Xxxxxx
000 00xx Xxxxxx Xxxxx, Xxxxx 000 000 Xxxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000 FACSIMILE: (000) 000-0000
IF TO SELLERS AT: WITH COPY TO:
Xxxxxx Sender, Trustee Holland & Xxxx LLP
Katch, Sender & Xxxxxxxxx, P.C. 000 00xx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxx, Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000-0000
Xxxxxx, Xxxxxxxx 00000 Attention: Xxxx Xxxxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000 FACSIMILE: (000) 000-0000
IF TO ESCROW AGENT:
SouthTrust Bank of Alabama, N.A.
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 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.
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(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 Trustee 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
MASADA SECURITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, Vice President
/s/ Xxxxxx Sender
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XXXXXX SENDER, AS TRUSTEE for the Bankruptcy
Estates of (i) InterCap Funds Joint Venture, (ii)
Security Data Group of California, Inc. and (iii)
IMIF IV-C Service Corp.
SOUTHTRUST BANK OF ALABAMA, N.A.
By: /s/ Xxxx Xxxxxx
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Its: Vice President
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