ESCROW AGREEMENT
THIS AGREEMENT is made this ____ day of May, 1998, by and
among ENVIRONMENTAL TRANSPORTATION SERVICES, INC., an Oklahoma
corporation ("Seller"), METROPOLITAN ENVIRONMENTAL, INC., an
Indiana corporation ("Purchaser"), and NATIONSBANK OF TENNESSEE,
N.A., a national banking association ("Escrow Agent"), under the
following circumstances:
A. Seller and Purchaser entered into a Purchase
and Sale Agreement dated March 2, 1998 (the "Purchase and Sale
Agreement") in which Purchaser agreed to purchase certain property
from Seller, including certain real property located at 0000
Xxxxxxxxx 00xx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, as more
specifically described on Exhibit "A" attached hereto (the "Real
Property").
B. The Purchase and Sale Agreement was approved by
order of the United States Bankruptcy Court for the Western
District of Oklahoma entered in the Seller's bankruptcy case on
April 7, 1998 (the "Order").
C. The parties enter into this Escrow Agreement
pursuant to Section 7.1 of the Purchase and Sale Agreement and in
accordance with the terms of the Order.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises contained herein, the parties agree as follows:
1. Escrow Property.
1.1 Deposit of Deed. Upon execution of this Agreement,
Seller shall deliver a Special Warranty Deed (the "Deed"), Owner's
Affidavit and Non-Foreign Affidavit covering the Real Property
(together, "Seller's Documents") to the Escrow Agent, which Deed
and Seller's Documents shall be duly executed and acknowledged by
Seller, and in the form of Exhibit "B" attached hereto.
1.2 Deposit of the Escrow Amount. Upon execution of
this Agreement, Purchaser shall deposit, by wire transfer of
federal funds, Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) representing the purchase price for the Real Property
("Purchase Price"), into Escrow Agent's trust account (the "Escrow
Account") as follows:
NationsBank of Tennessee, N.A.
___________________________
Account No. ________________
ABA No. __________________
Attn. ______________________
1.3 Seller's Account. Any funds in the Escrow Account
which, under the terms of this Agreement, are to be paid to the
Seller, should be wire transferred to the Seller's account as
follows:
Xxxx Xxxxxx Bank
Environmental Transportation Services, Inc.
Account No. 0000000
ABA No. 000000000
2. Transfer of Real Property.
2.1 Environmental Audit. The parties hereby
acknowledge that there are certain environmental issues relating to
the Real Property that are currently under investigation and that
a Phase II environmental audit report and supplemental report (the
"Environmental Report") is being prepared by Cardinal
Environmental, Inc. (the "Environmental Firm") pursuant to Section
8.2 of the Purchase and Sale Agreement. Seller and Purchaser agree
to extend the determination of whether Purchaser will purchase the
Real Property until the Environmental Report has been completed as
set forth specifically herein.
2.2 Negotiation Window. Upon Purchaser's receipt of the
Environmental Report, the parties will have ten (10) days in which
to endeavor to resolve all issues regarding the contamination, if
any, revealed in the Environmental Report, in the manner set forth
in Paragraph 2.3 below.
2.3 Alternative Resolutions.
2.3.1 Remediation Costs of Equal to or Less Than
$15,000. If (a) the Environmental Report shows contamination in
nature and at such levels which the Environmental Firm determines
would require a total expenditure of $15,000 or less to fully
remediate ("Remediation Cost"), and (b) the Escrow Agent receives
written notice from the Purchaser during the Negotiation Window so
stating such Remediation Cost, the Purchase Price shall be reduced
by such Remediation Cost and the Escrow Agent shall at the
termination of the Negotiation Window (i) deliver the stated
Remediation Cost, not to exceed a total of $15,000, to the
Purchaser from the funds in the Escrow Account, (ii) deliver the
Tax Payment (as hereafter defined) to the Purchaser and the balance
of the funds within the Escrow Account to the Seller by wire
transfer to the account designated by Seller in the written notice,
and (iii) deliver the Deed and Seller's Documents to the Purchaser.
If written notice stating the Remediation Cost is not received by
the Escrow Agent from the Purchaser during the Negotiation Window,
the Escrow Agent shall immediately deliver the Tax Payment to the
Purchaser and all of the remaining funds within the Escrow Account
to the Seller and deliver to the Purchaser the Deed and the
Seller's Documents.
2.3.2 Remediation Costs Greater Than $15,000.
If the Environmental Report shows contamination on the Real
Property in nature and at such levels which the Environmental Firm
determines would require Remediation Cost of more than $15,000, and
the Seller receives written notice during the Negotiation Window
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stating such Remediation Cost, the parties hereto shall have the
remainder of the Negotiation Window to select one of the
alternatives designated below to resolve such issue or issues.
Purchaser shall select one of the following alternatives set forth
in this Paragraph 2.3.2 (A), (B) or (C) and shall send notification
in writing to the Escrow Agent prior to the expiration of the
Negotiation Window. If prior to the expiration of the Negotiation
Window, appropriate notice is not given in writing to the Escrow
Agent as to which of the options under Paragraph 2.3.2 (A), (B) or
(C) has been selected, the Purchaser shall be deemed to have
elected to purchase the Real Property pursuant to Paragraph 2.3.2
(B) and the Escrow Agent shall perform its duties as set forth
therein.
(A) The Purchaser may terminate this Agreement
without any liability or obligation to the other party. The Escrow
Agent shall, upon written notification of termination from the
Purchaser (i) deliver the funds in the Escrow Account to the
Purchaser, and (ii) deliver to the Seller the Deed and the Seller's
Documents.
(B) The Purchaser may purchase the Real Property.
In such case, the Purchaser agrees that the Remediation Cost for
the Real Property is $15,000 and, upon such written notice to the
Escrow Agent from Purchaser, the Escrow Agent shall (i) deliver
$15,000 and the Deed plus the Seller's Documents and the Tax
Payment (as hereafter defined) to Purchaser, and (ii) deliver the
remaining funds in the Escrow Account to Seller.
(C) The Seller and Purchaser may endeavor to
negotiate an alternative resolution and if the parties are able to
reach an agreement other than as set forth in sub-paragraph (A) or
(B) above, the parties acknowledge that Congress Financial
Corporation (Southwest) ("Congress") must approve and consent to
such agreement so that written notice and instruction from the
Seller and Purchaser may be timely given to the Escrow Agent.
3. Use of Real Property Pending Transfer. Seller
agrees that Purchaser shall have the right and license to use the
Real Property for a period commencing effective April 22, 1998, and
ending on the earlier of (a) the date on which the Real Property is
transferred pursuant to Paragraph 2, or (b) May 23, 1998; provided
that Purchaser shall pay any and all utility and operating expenses
and minor repairs for the Real Property (and such major repairs
which may result due to Purchaser's actions) incurred during the
time the Real Property is in the possession of Purchaser.
4. Insurance. Purchaser agrees to add Seller as a
named insured on Purchaser's liability insurance policy for as long
as Purchaser occupies the Real Property.
5. Utilities. Seller agrees to pay any and all
utility expenses for the Real Property incurred on or before April
22, 1998 as well as on and after the date possession of Real
Property is returned to Seller if Purchaser does not purchase the
Real Property as provided herein.
6. Taxes. The parties agree that if Purchaser
purchases the Real Property, the real property taxes shall be
prorated as set forth in the Purchase and Sale Agreement with the
transfer of Real Property deemed effective as of April 22, 1998,
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rather than the date of actual closing. It shall be the Seller's
responsibility to pay the past-due taxes assessed against the Real
Property in the amount of $3,565.58 plus the estimated 1998 Real
Property taxes accrued through and including April 21, 1998 in the
amount of $1,023.42, for a total amount of $4,589.00 (the "Tax
Payment"). In the event that the closing occurs subsequent to May
15, 1998, the Tax Payment amount will be increased by the sum of
$50.46 on the fifteenth (15th) day of each month commencing May 15,
1998.
7. Indemnification of Escrow Agent. Seller and
Purchaser, jointly and severally, hereby indemnify and hold Escrow
Agent harmless from and against any and all losses, costs,
expenses, liabilities, and damage (including reasonable attorneys'
fees) arising from or out of any claim in connection with the
performance of any of the obligations required by Escrow Agent to
be performed hereunder, excepting, however, any loss, cost, expense
or damage resulting from Escrow Agent's gross negligence or willful
misconduct in exercising its duties under this Escrow Agreement.
8. Responsibilities and Duties of Escrow Agent. It is
agreed that Escrow Agent shall have no duties or responsibilities
except those expressly set forth herein. Escrow Agent may consult
with counsel and shall be fully protected with respect to any
action taken or omitted by it in good faith on advice of counsel.
Escrow Agent may rely on any certificate, statement, request,
consent, agreement or other instrument which it reasonably believes
to be genuine and to have been signed or presented by a proper
person or persons. Escrow Agent will not be responsible for the
sufficiency or accuracy of the form, execution or validity of any
document delivered to it hereunder. Escrow Agent shall not be
bound by any modification of this Escrow Agreement unless in
writing and signed by the other parties hereto and, if the duties
of the Escrow Agent hereunder are affected, unless it shall have
given its prior written consent thereto. In the event that Escrow
Agent shall be uncertain as to its duties or rights hereunder or
shall receive instructions from any party hereto with respect to
the Escrow Amount, which, in its opinion, are in conflict with any
of the provisions of this Escrow Agreement, it shall be entitled to
refrain from taking any action other than to keep safely the Escrow
Account and Deed until it shall be directed otherwise in writing by
the other parties hereto or by a final judgment of an appropriate
court.
9. Litigation. In the event Escrow Agent is
threatened with litigation by reason hereof, it is hereby
authorized to interplead all interested parties in any court of
competent jurisdiction and to deposit with such court any funds and
documents held by it pursuant hereto and, thereupon, it shall stand
fully relieved and discharged of any further duties hereunder.
10. Agreement Consistent with Purchase and Sale
Agreement. Unless the terms of this Agreement specifically set
forth otherwise, the terms of this Agreement shall be construed and
interpreted in a manner that is consistent with the terms of the
Purchase and Sale Agreement.
11. Notices. Unless otherwise provided in this
Agreement, any notices, certificates, or instructions provided for
hereunder shall be in writing and shall be deemed to have been
properly delivered when such notice is delivered personally, or by
facsimile, or by recognized overnight courier service, or is
deposited in the United States mail, certified or registered,
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postage prepaid, return receipt requested, addressed to the parties
at their respective addresses, as follows:
11.1 In the case of Seller, to:
Environmental Transportation Services, Inc.
Attn: Xxxxxxx X'Xxxxxxxxx, President
0000 Xxxxxxxxx 00xx
Xxxxxxxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxxxxxx, Esq.
XXXXXX & XXXXXXX, P.C.
One Leadership Square
000 X. Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
11.2 In the case of Purchaser, to:
Metropolitan Environmental, Inc.
Attn: Xxxxx X. Xxxxxxx
000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxx 00000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
XXXXX & XXXXXX CO., LPA
00 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Facsimile No.: 000-000-0000
11.3 In the case of Escrow Agent, to:
NationsBank of Tennessee, N.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: 000-000-0000
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12. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
legal representatives, successors, and assigns.
13. Governing Law. This Agreement shall be governed by the
laws of the State of Oklahoma.
14. Escrow Fees. All escrow fees payable for Escrow Agent's
services to be rendered hereunder and costs incurred by Escrow
Agent shall be paid one-half (1/2) by Purchaser and one-half (1/2) by
Seller .
15. Defined Terms. All capitalized terms that are not
otherwise defined in this Agreement shall have the meanings set
forth in the Purchase and Sale Agreement.
16. Counterparts. This Agreement may be executed in separate
counterparts which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
SELLER:
ENVIRONMENTAL TRANSPORTATION
SERVICES, INC.
By: ______________________________________
Xxxxxxx X'Xxxxxxxxx, President
PURCHASER:
METROPOLITAN ENVIRONMENTAL, INC.
By: ______________________________________
Xxxxx X. Xxxxxxx,
Secretary and Treasurer
ESCROW AGENT:
NATIONSBANK OF TENNESSEE, N.A.
By: ______________________________________
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