1
ASSET PURCHASE AGREEMENT
This Agreement is made and entered into this 26th day of July, 1995, by
and between MASADA SECURITY, INC., a Delaware corporation ("Purchaser") and
NETWORK MULTI-FAMILY SECURITY CORPORATION, a Delaware corporation ("Seller").
RECITALS
Seller is engaged in the business of operating a security alarm system
monitoring business in the Dallas, Texas metropolitan area (the "Business").
Seller desires to sell to Purchaser and Purchaser desires to buy from
Seller certain of the customer account contracts and certain other assets of
Seller pertaining to the Business, and Purchaser and Seller desire to make
certain other arrangements between them relating to the purchase and sale of
such assets, all upon the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, the parties hereto in consideration of the mutual
covenants, agreements and specific considerations set forth below, the
sufficiency and adequacy of which is hereby acknowledged, and intending to be
legally bound, agree as follows:
Section 1. Agreement to Purchase and Sell. In accordance with the terms
and conditions contained herein and in reliance on the respective
representations and warranties of the parties hereto, Seller hereby agrees to
sell, convey, transfer and assign to Purchaser, and Purchaser hereby agrees to
purchase, accept and acquire from Seller in the manner provided herein, the
assets described below (collectively referred to as the "Purchased Assets"):
(a) Alarm Accounts. All right, title and interest of Seller in and to
the written contracts for the rendering of security monitoring services to
existing customers of Seller which meet all of the requirements listed in
Section 8(i) and as specifically set forth on Schedule 1(a) hereto (the "Alarm
Accounts");
(b) Non-Conforming Alarm Accounts. All right, title and interest of
Seller in and to the contracts for the rendering of security monitoring services
to existing customers of Seller which meet all of the requirements listed in
Section 8(i) with the exception of Section 8(i)(i) and as specifically set forth
on Schedule 1(b) hereto (the "Non-Conforming Alarm Accounts");
2
(c) Other Contracts. All right, title and interest of Seller in and
to those contracts and benefits of Seller substantially all of which are listed
on Schedule 1(c) hereto (the "Other Contracts"), with the Other Contracts,
including, without limitation, all executory contracts, agreements, leases and
all accepted orders for the sale or installation by Seller of alarm systems
which are not yet installed or in the process of being installed as of the
Closing Date (as defined in Section 5(a));
(d) Receivables. The accounts receivable, trade accounts, notes
receivable and other debts owed to Seller for monitoring services rendered
pertaining to the Alarm Accounts and Non-Conforming Alarm Accounts prior to the
Closing Date substantially all of which are listed on Schedule 1(d) hereto (the
"Receivables");
(e) Intangible Personal Property. The unexpired copyrights and
licenses owned by or accruing to the benefit of Seller pertaining to the
Purchased Assets, including all non-competition or non-solicitation agreements
accruing to the benefit of Seller and pertaining to the Purchased Assets to
which it is a party (the "Intangible Personal Property"), substantially all of
which are listed on Schedule 1(e) hereto;
(f) Other Assets. All files, records and incidental documentation of
Seller pertaining to the Alarm Accounts and Non-Conforming Alarm Accounts,
including, without limitation, all computer lists, contract information, credit
records and information, purchase and sales records, catalogs, circulars,
advertising materials and other information (the "Other Assets").
Section 2. Purchase Price and Payment.
(a) Purchase Price. The purchase price for the Purchased Assets (the
"Purchase Price") shall be the product of 24 times the aggregate Monthly Revenue
Equivalent (as defined herein) of each Alarm Account and each Non-Conforming
Alarm Account less an amount equal to the prepaid revenue relating to each Alarm
Account and each Non-Conforming Alarm Account (as set forth on Schedule 2(a)
hereto) computed on a per diem basis to the Closing Date.
(b) Adjustment to Purchase Price. The Purchase Price shall be
adjusted for items of expense and income prorated as of the Closing Date in the
manner provided below:
(i) Liabilities or credits for personal property taxes, if any,
in respect of the Purchased Assets shall be prorated on the basis of the current
taxable year, to and including the Closing Date; provided that if the assessed
value of any Purchased Asset or rate of tax with respect thereto shall not have
been determined prior to the Closing Date, the value and rate shall be
determined on the basis of the amount of the previous year in which the same was
determined; and
2
3
(ii) Other liabilities or credits, prepaid items and deferred
charges relating to the Purchased Assets existing on the Closing Date shall be
adjusted as of the Closing Date by prorating the aforementioned items for credit
to Seller or Purchaser, as the case may be, in accordance with generally
accepted accounting principles.
(c) Payment of Purchase Price.
(i) 85% of the Purchase Price subject to the adjustments as set
forth in Section 2(b) (the "Initial Payment") shall be paid by Purchaser to
Seller by wire transfer or other mutually agreeable means on the Closing Date;
(ii) The remaining 15% of the Purchase Price (the "Deferred
Payment Amount") shall be paid in accordance with Section 3 hereof.
(d) Allocation of Purchase Price. The Purchase Price, subject to the
adjustments set forth in Section 2(b) above, shall be allocated as set forth in
Schedule 2(d). Purchaser and Seller agree for income tax purposes they shall
report the transactions contemplated by this Agreement in a manner consistent
with such allocation.
(e) Guarantee Period.
(i) Seller warrants that beginning on the Closing Date and for
the 6 month period immediately after the Closing Date (the "Guarantee Period")
all Alarm Accounts purchased by Purchaser pursuant to this Agreement and
described on Schedule 1(a) shall continue to meet the requirements specified in
Section 8(i) and that payments from customers shall be made in a timely manner.
For purposes of this Agreement, payments by customers shall be considered timely
if they are received by Purchaser on or before the 60th day following the
applicable payment due date. For purposes of this Agreement, a "Defaulted
Contract" shall be defined as any Alarm Account that no longer meets the
requirements specified in Section 8(i) or any Alarm Account the payments from
which shall not have been made in a timely manner. Seller shall be charged
against the Escrow Account as provided for in Section 3, an amount equal to 24
times the Monthly Revenue Equivalent of the Defaulted Contracts ("Defaulted
Contract Credits").
(ii) Seller warrants that if any or all of the Non-Conforming
Alarm Accounts purchased by Purchaser pursuant to this Agreement and listed on
Schedule 1(b) do not meet all of the requirements listed in Section 8(i) at the
end of the Guarantee Period then Seller, within 30 days following receipt of
written notice from Purchaser that Purchaser intends to cease providing
monitoring services to such Non-Conforming Alarm Accounts, shall be charged
against the Escrow Account an amount equal to 24 times the Monthly Revenue
Equivalent of such Non-Conforming Alarm Accounts; provided, however, that
Purchaser shall use its best efforts to have the Section 8(i)(i) requirements
met during the Guarantee Period.
3
4
Section 3. Deferred Payment Amount.
(a) Escrow Agreement. On or prior to the Closing Date, Seller and
Purchaser agree to execute an Escrow Agreement substantially in the form
attached hereto as Schedule 3(a) (the "Escrow Agreement") and Purchaser agrees
to deposit with SouthTrust Bank of Alabama, N.A. (the "Escrow Agent"), the
Deferred Payment Amount to be held in an escrow account (the "Escrow Account")
pursuant to the terms of the Escrow Agreement (the "Deferred Payment Amount"
together with all earnings thereon shall collectively hereinafter be referred to
as the "Escrow Amount").
(b) Payment and Escrow Amount. Within 30 days from the expiration of
the Guarantee Period, Purchaser shall submit to Seller substantially in the form
attached hereto as Schedule 3(b) along with all appropriate supporting
documentation, a report reflecting: (i) the Escrow Amount; (ii) the total
Defaulted Contract Credits credited to Purchaser calculated in accordance with
Section 2(e); and (iii) the resulting difference between Section 3(b)(i) less
the Purchaser's credits associated with Section 3(b)(ii) (the "Resulting
Difference"). If Seller does not notify Purchaser of a dispute regarding such
report within ten business days from the date such report is received by Seller
or if Seller notifies Purchaser of its acceptance of such report, such report
shall be deemed complete and accurate and Seller and Purchaser shall notify
Escrow Agent to pay the sums computed below to Seller or Purchaser, as the case
may be, and the Escrow Account shall then be closed after payment by the Escrow
Agent of all funds held by it in the Escrow Account. If the Resulting
Difference is a positive amount then Seller and Purchaser shall instruct the
Escrow Agent to first pay the Seller the Resulting Difference and the remainder
of the Escrow Amount shall be paid by Escrow Agent to Purchaser. If the
Resulting Difference is a negative amount, then Seller and Purchaser shall
instruct the Escrow Agent to pay Purchaser the entire Escrow Amount. Seller's
guarantee of the Alarm Accounts and Non-Conforming Alarm Accounts shall in all
events be limited to the Deferred Payment Amount deposited in the Escrow
Account.
(c) Dispute. All disputes and differences with respect to the
computation of the Resulting Difference and the Escrow Account shall be
determined by binding arbitration under the rules then in effect of the American
Arbitration Association, such arbitration hearing to be held in Dallas County,
State of Texas. The arbitration proceedings shall be heard by one arbitrator
selected from the proposed panel of arbitrators issued by the American
Arbitration Association, Seller, on the one hand, and Purchaser, on the other
hand, shall attempt to select a mutually acceptable arbitrator. If the parties
are unable to select a mutually acceptable arbitrator within five business days
following the issuance of the list of potential arbitrators by the American
Arbitration Association, Seller, on the one hand, and Purchaser, on the other
hand, shall each select one person from the list, and those two persons selected
shall appoint a third person from the list, which person shall be the arbitrator
for the dispute. All arbitration awards shall include an award of expenses
including, but not limited to, legal and accounting fees.
4
5
Section 4. Monthly Revenue Equivalent. For purposes of this Agreement, the
term "Monthly Revenue Equivalent" with respect to the Alarm Accounts and
Non-Conforming Alarm Accounts acquired from Seller by Purchaser shall be the
charge for monitoring services, (including, without limitation, maintenance and
other alarm related services), exclusive of any direct wire telephone line
charges associated with monitoring, payable by the customer for each applicable
billing period expressed in terms of a monthly amount regardless of whether the
billing period is annual, semi-annual, quarterly or monthly.
Section 5. The Closing.
(a) Place. The closing of the purchase and sale of the Purchased
Assets (the "Closing") shall take place on July 26, 1995, or such other date
as shall be mutually agreeable to Seller and Purchaser (the "Closing Date"), and
shall take place at a location mutually agreeable to Seller and Purchaser.
(c) Closing Deliveries. On the Closing Date, Seller shall make the
deliveries specified by Section 9 and Purchaser shall make the deliveries
specified by Section 10.
(c) Closing Procedure. All proceedings to be taken and all documents
to be delivered and executed on the Closing Date shall be deemed to have been
taken, delivered and executed simultaneously, and no proceeding shall be deemed
taken nor documents deemed executed or delivered until all have been taken,
delivered and executed. At the Closing Seller and Purchaser shall execute and
deliver the instruments and documents referenced in Sections 9 and 10 and
Purchaser shall pay the Purchase Price in accordance with Section 2 hereof.
Section 6. Assumption of Liabilities. Purchaser shall not assume any
liability, debt or obligation of Seller except the responsibility of rendering
security monitoring services pursuant to the Alarm Accounts, Non-Conforming
Alarm Accounts and Other Contracts set forth on Schedules 1(a), 1(b) and 1(c)
and those liabilities and obligations of Seller arising after the Closing Date
that are set forth on Schedule 6 hereto. Seller shall indemnify and save
harmless Purchaser from any loss, liability or expense (including attorneys'
fees) which result from Seller's use of the Purchased Assets or its conduct
related to the Purchased Assets prior to and including the Closing Date.
Purchaser shall indemnify and save harmless Seller from any loss, liability or
expense (including attorneys' fees) which result from Purchaser's use of the
Purchased Assets or its conduct related to the Purchased Assets subsequent to
the Closing Date.
Section 7. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that on the date hereof:
(a) Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and Purchaser has all requisite corporate power and authority to own,
operate and lease its properties and carry on its business as now being
conducted and to enter into this Agreement and to perform its obligations
hereunder.
5
6
(b) Authority Relative to this Agreement. The execution, delivery and
performance by Purchaser of this Agreement has been duly authorized by the
stockholder of Purchaser, and no further corporate action is necessary on the
part of Purchaser to make this Agreement valid and binding upon Purchaser in
accordance with its terms.
(c) No Violation. Neither the execution nor the delivery of this
Agreement by Purchaser nor the consummation of the transactions contemplated
herein, nor compliance by Purchaser with any of the provisions hereof, violates
or conflicts with or results in the breach or termination of any term or
provision of, nor constitutes a default or acceleration of the performance
required under, the certificate of incorporation, bylaws or resolutions of the
Purchaser; any indenture, mortgage, deed, trust or other contract or agreement
to which Purchaser is a party or by which its properties are bound, or violates
any order, writ, injunction or decree of any court, administrative agency or
governmental body.
(d) Brokerage Fees. Purchaser is not obligated nor has it agreed to
pay any brokerage commissions, finders fees or other similar fee or charge in
connection with the purchase of the Purchased Assets pursuant to this Agreement.
Section 8. Representations and Warranties of Seller. Seller represents
and warrants to Purchaser that on the date hereof:
(a) Organization and Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and Seller has all requisite corporate power and authority to own,
operate and lease its properties and carry on its business as it has been and
currently is being conducted and to enter into this Agreement and to perform its
obligations hereunder.
(b) Authority Relative to this Agreement. The execution, delivery and
performance by Seller of this Agreement has been duly authorized by the board of
directors and stockholders of Seller, and no further corporate action is
necessary on the part of Seller to make this Agreement valid and binding upon
the Seller in accordance with its terms.
(c) No Violation. Neither the execution nor the delivery of this
Agreement by Seller nor the consummation of the transactions contemplated
herein, nor compliance by Seller with any of the provisions hereof:
(i) violates or conflicts with or results in the breach or
termination of any term or provision of, nor constitutes a default or
acceleration of the performance required under, the articles of incorporation,
bylaws or resolutions of Seller, or under any indenture, mortgage, deed, trust,
lease, license or other contract or agreement to which Seller is a party or by
which its properties are bound;
6
7
(ii) violates any law, ordinance, regulation, arbitration,
award, judgment, order, writ, injunction or decree to which Seller is a party or
to which it is bound; or
(iii) requires the consent of any other person, entity or
governmental authority.
(d) Brokerage Fees. Seller is not obligated nor has it agreed to pay
any brokerage commissions, finders fees or other similar fee or charge in
connection with the purchase of the Purchased Assets pursuant to this Agreement.
(e) Title to Purchased Assets. Seller warrants that on the date
hereof it has good and marketable title to all of the Purchased Assets, and the
Purchased Assets shall not be subject to any pledge, option, conditional sale
agreement, security interest, consensual lien, judgment lien, encumbrance or
charge of any kind. Seller warrants that the Alarm Accounts acquired by
Purchaser are valid and are binding upon and enforceable against the customers
of Seller executing same in accordance with their terms, and the obligations of
the customers of Seller thereunder are not subject to set-off or claims
resulting from the conduct of Seller's business prior to their conveyance to
Purchaser. The Xxxx of Sale (as defined herein) is sufficient to, and does,
transfer all right, title and interest in the Purchased Assets from Seller to
Purchaser.
(f) Compliance with the Law. The business of Seller has been and is
being conducted in compliance with all applicable laws, regulations and
requirements of each jurisdiction in which Seller's business is carried on and
is not in breach of any such laws, regulations or requirements, and Seller
warrants to hold Purchaser harmless from and against any violations of
applicable laws, regulations or requirements arising out of non-compliance
therewith prior to the Closing Date.
(g) Actions, etc.
(i) There are no actions, suits, proceedings or investigations
pending against or relating to the Purchased Assets and Seller has not received
any notice or written or oral communication reflecting an intention or threat to
institute any such action suit, proceeding or investigation.
(ii) There are no action suits, proceedings or investigations
pending before any court or governmental agency in which it is sought to
restrain or prohibit the carrying out of this Agreement or the consummation of
the transactions contemplated herein in connection therewith and there is no
such action suit proceeding or investigation threatened.
(iii) Seller is not subject to any judgment, order, writ, court
decree, governmental decree or injunction relating to the Purchased Assets.
7
8
(iv) To the best of Seller's knowledge there are no known
defects or deficiencies in the products or services provided by Seller prior to
the date hereof as a result of which any claim or suit may arise.
(h) Tax Returns. Seller has timely filed all tax reports and returns
required to be filed and has timely paid all taxes (including, without
limitation, income, payroll withholding, sales and use taxes) and all other
charges due or claimed to be due from it by Federal, State or local taxing
authorities in respect to the periods covered by such returns.
(i) Alarm Account Requirements. Each of the Alarm Accounts:
(i) is evidenced by a valid, enforceable and properly executed
monitoring agreement;
(ii) has not repudiated monitoring services. An Alarm Account
shall be deemed to have repudiated monitoring services if: (A) the customer has
abandoned the premises at which the security monitoring system has been
installed; (B) the customer is insolvent; or (C) the customer has cancelled or
issued notice of termination of the Alarm Account, notwithstanding the fact that
the Alarm Account may remain enforceable against the customer;
(iii) has generated cash receipts representing service charges
for at least one full billing cycle or has been prepaid for at least one month's
service;
(iv) has no charges that have been outstanding and unpaid for
more than 60 days from the invoice due date as of the Closing Date; and
(v) is monitored using digital data signals transmitted from the
customer's premises to a central monitoring station.
(j) Insurance. Seller has "occurrence basis" general liability
insurance coverage which covers the Purchased Assets in an amount equal to or
greater than one million dollars ($1,000,000.00) per single occurrence and
workers compensation insurance coverage equal to or greater than that required
by law.
(k) Disclosure. No representation or warranty of Seller, and no
statement contained in this Agreement and no information contained in any
schedule furnished to Purchaser by or on behalf of Seller pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading. Each of the separate representations and warranties set forth in
the various subsections of this Section 8 is intended to be, and shall be
interpreted as, an independent representation and warranty as to matters
referred to therein, and the applicability or inapplicability of any particular
subsection of this Section 8 shall not affect the interpretation of any other
subsection.
8
9
Section 9. Conditions Precedent to Obligations of Purchaser. Purchaser's
obligation to purchase the Purchased Assets under this Agreement is subject to
the fulfillment, prior to or at the Closing Date, of each of the following
conditions:
(a) Representations True on the Closing Date. The representations and
warranties of Seller contained in this Agreement shall be true on the date
hereof, and at the time of the Closing Date as though made on the Closing Date.
(b) Performance. Seller shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it prior to the Closing Date.
(c) Seller's Closing Certificate. Seller shall have delivered to
Purchaser a closing certificate of the president, or any other authorized
representative of Seller dated as of the Closing Date substantially in the form
attached hereto as Schedule 9(c).
(d) Schedules. Seller shall have updated the Schedules hereto in
accordance with Section 14(e) hereof. Purchaser shall have determined, in good
faith, that taking into account any material changes to the information in the
updated Schedules, the transactions contemplated by this Agreement are as
beneficial to Purchaser as prior to the updating of Schedules.
(e) Consents to Assignments. Seller shall have taken all action
necessary and appropriate, and obtained all necessary consents, waivers and
approvals required under any leases or other agreements to consummate the sale
of the Purchased Assets pursuant to this Agreement in writing on terms
reasonably acceptable to Purchaser, and Purchaser shall reasonably cooperate
with Seller in its efforts to obtain such consents, waivers and approvals.
(f) Litigation. No action, suit, proceeding or investigation shall be
pending or threatened to restrain, set aside or invalidate the transactions
contemplated by this Agreement or any portion thereof, including without
limitation any claims by creditors of Seller against the Purchased Assets.
However, if Seller becomes aware of any pending or threatened action, suit,
proceeding or investigation which involves the Purchased Assets between the date
of this Agreement and the Closing Date then Seller shall promptly notify
Purchaser in writing of any such action, suit, proceeding or investigation.
(g) Certified Resolutions. Seller shall have delivered to Purchaser
copies, certified by the secretary or an assistant secretary of Seller, of the
resolutions of Seller's board of directors and stockholders authorizing the
execution and delivery of this Agreement.
(h) Certificate of Good Standing. Seller shall have delivered to
Purchaser a certificate of good standing of Seller issued by the Secretary of
State of Texas dated within 10 days prior to the Closing Date.
9
10
(i) Instruments of Transfer. Seller shall have delivered to Purchaser
a Xxxx of Sale, Assignment and Assumption Agreement substantially in the form
attached hereto as Schedule 9(i) (the "Xxxx of Sale") and other good and
sufficient instruments of transfer and conveyance, as in the reasonable opinion
of Purchaser's counsel, shall be effective to vest in Purchaser good and
marketable title to the Purchased Assets.
(j) Non-Solicitation Agreements. Seller shall have delivered to
Purchaser non-solicitation agreements substantially in the form attached hereto
as Schedule 9(j) executed by Xxx X. Xxxxxxx, in his individual capacity, and by
Seller.
(k) Notice to Subscribers. Seller shall have delivered within seven
days after the Closing Date to each customer set forth on Schedule 1(a) and 1(b)
hereto a notice in the form attached hereto as Schedule 9(k). Purchaser and
Seller shall equally share the costs associated with the creation and delivery
of such notices.
(l) Monitoring Agreement. Purchaser shall have entered into a
monitoring agreement with Texas Security Central, Inc. for the monitoring and
servicing of the Alarm Accounts and the Non-Conforming Alarm Accounts on terms
acceptable to Purchaser, in its sole discretion.
Section 10. Conditions Precedent to Obligations of Seller. Seller's
obligations to sell and transfer the Purchased Assets to Purchaser under this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions.
(a) Representations True on the Closing. Purchaser's representations
and warranties contained in this Agreement shall be true at the date hereof, and
at the Closing Date as though made on the Closing Date.
(b) Performance. Purchaser shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date.
(c) Xxxx of Sale. Purchaser shall have executed and delivered the
Xxxx of Sale.
Section 11. Indemnification. Seller, on the one hand, and Purchaser, on
the other hand, shall indemnify and hold each other harmless from and against
any and all losses, liabilities, damages and expenses, including reasonable
attorneys' fees, that they may suffer or become liable for as a result of or in
connection with any breach of a representation, warranty, covenant or agreement
contained in this Agreement.
Section 12. Bulk Sales Law. The sale and purchase described in this
Agreement may constitute a "bulk transfer" of assets and if so, Seller
represents and warrants that the sale and purchase described in this Agreement
will be conducted according to, and in full compliance with, the requirements of
the bulk transfer provisions of the Uniform Commercial Code as
10
11
adopted in the State of Texas. In addition to its indemnity under Sections
6 and 11, Seller hereby agrees to indemnify and hold Purchaser harmless from
any and all liability to anyone arising from its failure to comply with the
provisions of Texas Business and Commercial Code Xxx. Section 6.101 et seq.,
relating to bulk transfers. Such indemnity shall survive Closing.
Section 13. Assignment. Purchaser may, without the consent of Seller,
assign its rights and delegate its obligations under this Agreement, to any
corporation, limited liability company, partnership, association, proprietorship
or any other business entity who acquires all or a substantial part of the
assets of Purchaser in connection with the sale of all or a substantial part of
its business and agrees in writing to be bound by all terms and obligations of
this Agreement. Upon any such assignment Purchaser shall be relieved and
discharged from any further obligations under this Agreement. Furthermore,
Purchaser may, without the consent of Seller, collaterally assign its rights
under this Agreement to one or more banks, insurance companies or other
financial institution for purposes of financing. Except as provided above,
neither party may assign its rights or delegate its obligations under the
Agreement without the written consent of the other party.
Section 14. Agreements Prior to Closing.
(a) Fulfillment of Conditions. Seller shall use its best efforts to
take or cause to be taken all action reasonably necessary or appropriate to
cause each of the conditions set forth in Section 9 to be fulfilled prior to or
on the Closing Date. Purchaser shall use its best efforts to take or cause to
be taken all action reasonably necessary or appropriate to cause each of the
conditions set forth in Section 10 to be fulfilled prior to or on the Closing
Date.
(b) Access to Information. Between the date of this Agreement and the
Closing Date, Seller shall allow the employees, representatives, attorneys and
accountants of Purchaser free access at all reasonable times to the records,
files, correspondence, audits and properties of Seller which pertain to the
Business.
(c) Conduct of Business. Between the date of this Agreement and the
Closing Date, Seller shall cause the Business to be conducted in its usual and
ordinary course.
(d) Preservation of Existing Relationships. Between the date of this
Agreement and the Closing Date, Seller shall use its best efforts to continue
existing relationships with customers, suppliers, employees and others having
business relations with respect to Seller.
(e) Updated Schedules. Seller agrees to update the Schedules hereto
as of the Closing Date to reflect changes occurring after the date hereof;
provided, however, that if any of the Schedules attached hereto on the date
hereof are materially inaccurate or incorrect, Seller may correct such Schedules
only with Purchaser's written consent. Any updated Schedules shall be attached
to this Agreement and for all purposes be deemed to be a part of this Agreement.
11
12
Section 15. No Joint Venture. The relationship between the parties
hereto is that of purchaser/seller and does not constitute a partnership or
joint venture. Both parties agree not to make any representations or
statements to any other person which contradict the foregoing.
Section 16. Seller's Employees. Purchaser shall be under no obligation
to employ after the Closing Date any of Seller's employees.
Section 17. Post Closing Covenants. Seller agrees to use its best
efforts to accommodate the conversion of the customer accounts relating to the
Purchased Assets to Purchaser's central station and billing system, including,
but not limited to billing customers listed on Schedules 1(a), 1(b) and 1(c)
for services rendered in June, 1995.
Section 18. Risk of Loss. The risk of any loss or damage to the
Purchased Assets resulting from fire, theft, explosion, earthquake, windstorm,
flood, accident, act of God, war, seizure, activities of the armed forces or
other casualty, reasonable wear and tear excepted, shall be borne by Seller at
all times prior to the Closing Date, and Seller shall be entitled to all
insurance proceeds resulting from such loss or damage.
Section 19. Miscellaneous.
(a) Pronouns. Whenever used herein and unless otherwise indicated by
the context, the masculine pronoun shall include and also mean the feminine and
the neuter, and the singular shall include and also mean the plural.
(b) Expenses. Each party shall pay all expenses incurred by it in
connection with the preparation, execution and performance of this Agreement.
(c) Entire Agreement. This Agreement, together with the Schedules
hereto, sets forth the entire understanding of the parties, and supersedes all
prior agreements, arrangements and communications, whether oral or written, with
respect to the subject matter hereof. This Agreement shall not be modified or
amended except by written agreement of Purchaser and Seller. Captions appearing
in this Agreement are for convenience only and shall not be deemed to explain,
limit or amplify the provisions hereof. All Schedules to this Agreement are
incorporated into and made a part of this Agreement for all purposes to the same
extent as if fully set forth herein.
(d) Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if the invalid
or unenforceable provision was omitted.
(e) Binding Effect; Assignment. All the terms, provisions, covenants
and conditions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by and against the parties hereto and their respective
successors and assigns.
12
13
(f) Notices. Any notice required or permitted to be delivered
pursuant to the terms of this Agreement shall be considered to have been
sufficiently delivered within five days after posting, if mailed by U.S. Mail,
certified or registered, return receipt requested, postage prepaid or, upon
receipt by overnight courier maintaining records of receipt by addressee or if
delivered by hand or telecopied with the original notice being mailed the same
day by one of the foregoing methods and addressed as follows:
IF TO PURCHASER AT:
Masada Security, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
TELECOPY: 0-000-000-0000
WITH COPY TO:
Xxxx & Xxxxxx
3100 SouthTrust Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(000) 000-0000
Attention: W. Xxx Xxxxxxx, Esq.
TELECOPY: (000) 000-0000
IF TO SELLER AT:
Network Multi-Family Security Corporation
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
TELECOPY: (000) 000-0000
13
14
or at such other address as the party may designate by 10 days advance written
notice to the other party. Notice shall be effective when delivered to a
responsible person at the address of the addressee.
(g) Further Assurances. Purchaser and Seller shall execute such other
instruments, documents and other papers and shall take such further actions as
may be reasonably required or desirable to carry out the provisions hereof and
to consummate the transactions contemplated hereby.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Alabama without regard
to its rules containing conflicts of laws.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original.
(j) Survival. The representations, warranties, covenants and
agreements of the parties hereto shall survive the date of this Agreement.
(k) Drafting Presumption. Each of the parties hereto has participated
in the negotiation and drafting of this Agreement and agree that no one party
has prepared this document to the exclusion of the other party and that in
construing this Agreement there should be no presumption based upon which party
drafted this Agreement.
(l) Intended Beneficiary. Purchaser and Seller hereby acknowledge
that the Purchase Price for the Purchased Assets will be funded from a loan
provided by State Street Bank and Trust Company to Purchaser; therefore,
Purchaser and Seller further acknowledge that State Street Bank and Trust
Company is an intended beneficiary of this Agreement and shall rely upon the
representations, warranties and agreements of Purchaser and Seller contained
herein. Purchaser shall obtain from State Street Bank and Trust Company,
authorization of this transaction as a condition of closing.
14
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
"Purchaser"
MASADA SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Its: President
------------------------------------
"Seller"
NETWORK MULTI-FAMILY
SECURITY CORPORATION
By: /s/ Xxx X. Xxxxxxx
------------------------------------
Its: President
--------------------------------
15
16
LIST OF SCHEDULES
Schedule 1(a) - Alarm Accounts
Schedule 1(b) - Non-Conforming Alarm Accounts
Schedule 1(c) - Other Contracts
Schedule 1(d) - Receivables
Schedule 1(e) - Intangible Personal Property
Schedule 2(a) - Purchase Price
Schedule 2(d) - Allocation of Purchase Price
Schedule 3(a) - Escrow Agreement
Schedule 3(b) - Escrow Account Distribution
Schedule 6 - Assumed Liabilities
Schedule 9(c) - Seller's Closing Certificate
Schedule 9(i) - Xxxx of Sale, Assignment and Assumption Agreement
Schedule 9(j) - Non-Solicitation Agreement
Schedule 9(k) - Notice Form
