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ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made effective as of the 10th
day of October, 1995, by and among MASADA SECURITY, INC., a Delaware
Corporation ("Purchaser"); LAFAYETTE SECURITY AND ELECTRONICS SYSTEMS, INC., a
Louisiana 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 September 11, 1995 (the "Purchase Agreement"), pursuant to
which the Seller agrees to sell and Purchaser agrees to purchase subject to the
approval from the United States Bankruptcy Court located in the Eastern
District of the State of Louisiana ("Bankruptcy Court") all of the customer
accounts and certain other assets of Seller related to the monitoring of
security alarm systems in New Orleans, Louisiana, as more fully described
therein;
WHEREAS, the Purchase Agreement requires Escrow Agent to hold
$116,333.14 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 $116,333.14 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 October 10, 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 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 by the Bankruptcy Court, 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,
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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
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, 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
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IF TO SELLER AT:
Lafayette Security and Electronics Systems, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
WITH COPY TO:
Turner, Young, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., 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
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.
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(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.
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: Vice President of Acquisitions
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LAFAYETTE SECURITY AND ELECTRONICS
SYSTEMS, INC.
By: /s/
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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: Sr. Vice Pres.
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