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ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made effective as of the 26th day
of July, 1995, by and among Masada Security, Inc., a Delaware Corporation
("Purchaser"); Network Multi-Family Security Corporation, ("Seller"); and
SouthTrust Bank of Alabama, N.A. ("Escrow Agent").
RECITALS
WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement
dated July 26, 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 the Dallas, Texas metropolitan area, as more fully described therein;
WHEREAS, the Purchase Agreement requires Escrow Agent to hold $24,244.38 of
the purchase price in escrow for approximately six months 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 ________________________ ($24,244.38) 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 January 26, 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
WITH COPY TO:
Xxxx & Xxxxxx
000 Xxxxx 00xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000
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IF TO SELLER AT:
Network Multi-Family Security Corporation
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
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.
(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.
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(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/ Xxxxx X. Xxxxxxx
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Its: President
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NETWORK MULTI-FAMILY
SECURITY CORPORATION
By: /s/ Xxx X. Xxxxxxx
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Its: President
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Tax I.D. No.: 00-000-0000
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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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