EXHIBIT 10.(c)
EXHIBIT 10(C)
ESCROW AND PLEDGE AGREEMENT
Escrow and Pledge Agreement (the "Agreement") dated February 23, 1998
among Guardian International, Inc., a Nevada corporation ("Guardian"), the
persons listed on Exhibit A attached hereto (individually, a "Seller" and
collectively, the "Sellers") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. (the "Escrow Agent").
RECITALS
A. Pursuant to the Stock Purchase Agreement of even date herewith by
and between Guardian and the Sellers ("Stock Purchase Agreement"), the Sellers
sold all of their outstanding shares of Mutual Central Alarm Services, Inc., a
New York corporation, to Guardian for, among other consideration specified in
the Stock Purchase Agreement, up to 2,000,000 shares of Guardian Common Stock
$.001 par value per share (the "Guardian Shares"), the number of which is to be
determined in accordance with Schedule 1.2 of the Stock Purchase Agreement. All
capitalized terms not otherwise defined in this Agreement shall have the
meanings given them in the Stock Purchase Agreement.
B. Pursuant to Section 4 of the Stock Purchase Agreement, the Sellers,
jointly and severally, agree to indemnify Guardian and hold Guardian harmless,
for a period ending on the later of the first anniversary of the Closing Date or
until the adjudication to final resolution of any and all claims for
indemnification thereunder (the "Indemnification Period"), from and against all
Liabilities. In connection with such indemnification, each Seller is obligated
to place its pro rata portion of 750,000 shares of the Guardian Shares (each of
which pro rata portion is enumerated in Exhibit A) (collectively, the "Escrowed
Shares") in escrow and pledge such Escrowed Shares as security for payment of
any Liabilities.
C. Guardian and the Sellers desire that the Escrow Agent hold the
Escrowed Shares pursuant to the terms of this Agreement.
AGREEMENT
1. ESCROW AND PLEDGE. The Sellers hereby deliver to the Escrow Agent
(a) stock certificates representing the Escrowed Shares (the "Certificates"),
(b) a stock power for each Certificate endorsed in blank (the "Stock Powers")
and (c) a copy of UCC-1 Financing Statements evidencing the pledge of the
Escrowed Shares hereunder to be filed in the States of Florida and New York (the
"UCC-1" and together with the Certificates and the Stock Powers, the
"Documents"). The Sellers hereby pledge and grant to Guardian a security
interest in the Escrowed Shares as security for the payment of Liabilities
pursuant to the Stock Purchase Agreement (a "Payment") during the
Indemnification Period. The Escrow Agent acknowledges receipt of the Documents
and agrees to hold and distribute them in accordance with the terms of this
Agreement.
2. VOTING OF ESCROWED SHARES; DIVIDENDS. During the Indemnification
Period, unless and until a claim arises which entitles Guardian to a Payment and
to foreclose on its security interest in the Escrowed Shares, the Sellers are
entitled with respect to the Escrowed Shares:
(a) subject to the grant of the Irrevocable Proxy, to vote the
Escrowed Shares at meetings of shareholders of Guardian and to execute consents
in respect thereof, and to consent to, ratify or waive notice of meetings of the
shareholders of Guardian; and
(b) to receive and collect or to have paid over to it all
dividends or other distributions declared or paid on the Escrowed Shares, except
(i) dividends or redistributions constituting stock dividends, (ii) dividends or
distributions in property other than cash or stock of the Company, and (iii)
liquidation dividends (either partial or complete) (collectively, "Excepted
Dividends"). All Excepted Dividends shall constitute additional security for a
Payment, and shall be paid over and pledged and deposited with the Escrow Agent.
Guardian shall have all of the powers and rights to all Excepted Dividends as
Guardian has with respect to the Escrowed Shares.
Immediately upon a release of all or any portion of the Escrowed Shares
under Section 4(a) hereof and without any further action by the parties hereto,
the Sellers shall no longer have the rights enumerated in this Section 2 and
such rights will automatically vest in Guardian.
3. COVENANTS
(a) RECAPITALIZATION. During the term of this Agreement, if any share
dividend, reclassification or readjustment is declared or made with respect to
the Escrowed Shares, all new, substituted, or additional shares or other
securities issued by reason of this change shall be delivered to and held by the
Escrow Agent under the terms of this Agreement in the same manner as the
Escrowed Shares.
(b) SELLERS' REPRESENTATIVE. The Sellers shall appoint a representative
(the "Sellers' Representative") for purposes of taking any and all action under
this Agreement, including but not limited to, the notice requirements under
Sections 5 and 12 below. The Sellers' Representative shall be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Esq.. The Escrow Agent shall be entitled to rely upon the authority of such
Sellers' Representative without further investigation. No Seller shall be
entitled to exercise any rights hereunder other than through the Sellers'
Representative.
(c) FILING OF UCC-1'S. The Sellers agree that simultaneously with the
deposit of the Documents with the Escrow Agent, they shall cause the Sellers'
Representative to file the UCC-1's in the states of New York and Florida and
shall provide evidence of such filings as soon as practicable thereafter.
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4. RELEASE OF ESCROWED SHARES.
(a) RELEASE DURING INDEMNIFICATION PERIOD. At any time during the
Indemnification Period, upon delivery to the Escrow Agent of a joint written
notice, substantially in the form of Exhibit B attached hereto, from Guardian
and the Sellers' Representative, the Escrow Agent shall distribute to Guardian,
as soon as practicable after receipt of the notice, the number of Escrowed
Shares stated in the written notice to be distributed as a Payment. Upon such
release, any released Escrowed Shares shall be surrendered to the transfer agent
for the Company and the restrictive legend regarding the provisions of this
Agreement shall be removed. The joint written notice shall reflect a
distribution of the Escrowed Shares which shall be prorated based upon each
Seller's proportionate interest in the Escrowed Shares.
(b) RELEASE UPON EXPIRATION OF INDEMNIFICATION PERIOD. Simultaneous
with the expiration of the Indemnification Period, Guardian and the Sellers'
Representative each agree to give a joint written notice, substantially in the
form of Exhibit C attached hereto, to the Escrow Agent enumerating the number of
Escrowed Shares that are to be distributed by the Escrow Agent to each of the
Sellers pro rata according to the amounts listed next to the name of each Seller
on Exhibit A, and the number of Escrowed Shares to be distributed by the Escrow
Agent to Guardian, if any and if not previously distributed to Guardian pursuant
to Section 4(a), as a Payment. The Escrow Agent shall release the Escrowed
Shares in accordance with the notice as soon as practicable after receipt of the
notice. Upon such release, the Escrowed Shares shall be surrendered to the
transfer agent for the Company and the restrictive legend regarding the
provisions of this Escrow and Pledge Agreement shall be removed.
(c) The Sellers agree that, except for indemnification arising out of
Section 4.2 of the Stock Purchase Agreement, all or part of the Escrowed Shares
may be disbursed without regard to the responsibility or culpability of a single
Seller or group of Sellers for the facts and circumstances giving rise to a
claim for indemnification and Payment under this Agreement. Upon the occurrence
of a claim for Payment, Guardian shall be entitled to foreclose its security
interest in the Escrowed Shares, and Guardian may exercise all rights of a
pledgee under the laws of the States of Florida and New York.
5. DUTIES OF ESCROW AGENT. It is agreed that the duties of the Escrow
Agent are only those which are specifically provided in this Agreement, and are
purely ministerial in nature. Provided the Escrow Agent acts in good faith, the
Escrow Agent shall incur no liability except for willful misconduct or gross
negligence. The Escrow Agent has no responsibility for the Documents deposited
with it, other than to use due care in holding the Documents and faithfully to
follow the instructions contained in this Agreement and given pursuant to it.
The Escrow Agent may consult with counsel and shall be fully protected in all
actions taken in good faith in accordance with the advice of counsel. The Escrow
Agent is not required to defend any legal proceedings which may be instituted
against it relating to the Documents unless it is (a) requested to do so by both
Guardian and the Sellers and (b) indemnified to the Escrow Agent's satisfaction
against the costs and expenses of the defense. The Escrow Agent shall not be
required to institute legal proceedings of any kind. The
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Escrow Agent shall be fully protected in acting in accordance with all joint
written instructions from Guardian and the Sellers. If any action is threatened
or instituted against the Escrow Agent, it may interplead the other parties to
this Agreement and may deposit the Documents into court. In such event, the
Escrow Agent shall be relieved of and discharged from all obligations and
liabilities under this Agreement.
6. EXPENSES. If there is a dispute between Guardian and the Sellers
(through the Sellers' Representative) concerning the release of the Escrowed
Shares, the Escrow Agent shall be entitled to be paid or reimbursed for all
expenses, disbursements and advances, including reasonable attorneys' fees,
incurred or made by the Escrow Agent in connection with the carrying out of its
duties under this Agreement. In such an event, the Escrow Agent's expenses,
disbursements and advances shall be paid directly to Escrow Agent and shall be
borne by the non-prevailing party.
7. COOPERATION. Guardian and each of the Sellers agree to execute,
acknowledge, deliver and file, or cause to be executed, acknowledged, delivered
and filed, all further instruments, agreements or documents as may be necessary
to consummate the transactions provided for in this Agreement and to do all
further acts necessary to carry out the purpose and intent of this Agreement.
8. NO WAIVER. No delay on the part of Guardian in exercising its rights
under this Agreement shall waive these rights, nor shall the waiver of any
breach hereunder operate as a waiver of any subsequent breach.
9. GOVERNING LAW; VENUE AND JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without reference to its conflicts of law principles. Venue and jurisdiction of
all actions relating to the performance or interpretation of this Agreement may
be brought only in the courts of the State of Florida located in Broward County
or in the United States District Court for the Southern District of Florida. The
parties consent to personal jurisdiction in the courts described in this Section
for the purpose of all actions, and waive all objections to venue and the right
to assert that a court chosen under this Section is improper based on the
doctrine of forum non conveniens.
10. ATTORNEYS' FEES. If litigation is brought concerning this
Agreement, the prevailing party shall be entitled to receive from the
non-prevailing party, and the non-prevailing party shall upon final judgment and
expiration of all appeals immediately pay upon demand all reasonable attorneys'
fees and expenses of the prevailing party.
11. NOTICES. Notices required or permitted to be given under this
Agreement shall be in writing and effective upon delivery in person or by
certified mail, return receipt requested, to the parties at the addresses below
or to another address as any party shall direct by notice to the other parties
as provided in this Section.
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(a) if to the Sellers' Representative, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to Guardian, to:
Guardian International, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
with copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Steel ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(c) if to the Escrow Agent, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
12. SEVERABILITY. If any one or more of the provisions of this
Agreement is held invalid, illegal or unenforceable, the remaining provisions of
this Agreement shall be unimpaired, and the invalid, illegal or unenforceable
provision shall be replaced by a mutually acceptable valid, legal and
enforceable provision which comes closest to the intent of the parties.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be for the benefit of,
and shall be binding upon, the parties and their respective heirs, personal
representatives, executors, legal representatives, successors and permitted
assigns.
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14. PAYMENT OF EXPENSES. Except as otherwise provided in this
Agreement, each party shall pay its own legal fees and disbursements and other
expenses incurred in connection with this Agreement.
15. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
16. JURY TRIAL. IF LITIGATION IS BROUGHT TO ENFORCE THIS AGREEMENT, THE
PARTIES KNOWINGLY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM HAS TO A TRIAL
BY JURY. THE PARTIES AGREE THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
PARTIES' ENTERING INTO THIS AGREEMENT.
17. COLLATERAL ASSIGNMENT BY SELLERS. Each of the Sellers hereby agrees
that Guardian shall be entitled to collaterally assign its rights under this
Agreement to a lender providing financing for the transactions contemplated by
the Stock Purchase Agreement.
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The parties have executed this Agreement effective as of the day and
year first written above.
GUARDIAN INTERNATIONAL, INC.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and Chief
Executive Officer
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W.A. LEVY TRUST
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EXHIBIT A
LIST OF SELLERS
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EXHIBIT B
JOINT WRITTEN NOTICE
To - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
This notice is given pursuant to Section 4(a) of the Escrow and Pledge
Agreement dated February 23, 1998 (the "Agreement"). You are hereby directed to
distribute the number of Escrowed Shares to Guardian as follows:
SELLERS' REPRESENTATIVE
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Name
GUARDIAN INTERNATIONAL, INC.
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By:
Its:
Dated: __________________
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EXHIBIT C
JOINT WRITTEN NOTICE
To - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
This notice is given pursuant to Section 4(b) of the Escrow and Pledge
Agreement dated February 23, 1998 (the "Agreement"). The Indemnification Period
has expired and you are hereby directed to distribute the number of Escrowed
Shares to each Seller and to Guardian as follows:
SELLERS' REPRESENTATIVE
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Name
GUARDIAN INTERNATIONAL, INC.
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By:
Its:
Dated: __________________
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