ESCROW FUND AGREEMENT
made as of October 10, 1997
by and among
CORESTATES BANK, N.A., as
Escrow Agent
and
SOUTH JERSEY TRANSPORTATION AUTHORITY
and
THE STATE OF NEW JERSEY, acting by
and through the NEW JERSEY DEPARTMENT OF
TRANSPORTATION
and
ATLANDIA DESIGN AND FURNISHINGS, INC.
EXHIBIT 10.14
ESCROW FUND AGREEMENT
ESCROW FUND AGREEMENT ("Agreement" or "Escrow Agreement"),
made as of October 10, 1997, by and among CORESTATES BANK, N.A.,
a national banking association ("Escrow Agent"), the SOUTH JERSEY
TRANSPORTATION AUTHORITY, a body corporate and politic and an
instrumentality of the State of New Jersey ("SJTA"), the STATE OF
NEW JERSEY ("State"), acting through the NEW JERSEY DEPARTMENT OF
TRANSPORTATION ("NJDOT"), and ATLANDIA DESIGN AND FURNISHINGS,
INC., a New Jersey business corporation ("Developer").
W I T N E S S E T H:
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WHEREAS, as of January 10, 1997, the State, SJTA and
Mirage Resorts, Incorporated ("MRI"), as "Developer", executed
and delivered a Road Development Agreement (said agreement, as
from time to time amended, the "Road Development Agreement")
pursuant to which they agreed to proceed with the Road Project
(as defined in the Road Development Agreement), subject to the
provisions of the Road Development Agreement; and
WHEREAS, concurrently with the execution and delivery of
the Road Development Agreement, MRI, pursuant to Section 13.1 of
the Road Development Agreement, assigned all of its right, title
and interest in and to the Road Development Agreement to
Developer, which assumed the obligations of the assignor
thereunder; and
WHEREAS, the Road Development Agreement was thereafter
amended, and is concurrently herewith being further amended to
provide, among other matters, for the deposit by SJTA of $125
million with the Escrow Agent and by Developer of $110 million
with the Escrow Agent, all pursuant to this Agreement.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. DEFINITIONS.
1.1 All terms, the initial letters of which are
capitalized and not otherwise defined in this Agreement, shall
have the respective meanings ascribed to them in the Road
Development Agreement.
1.2 The following terms shall have the following
meanings:
DEVELOPER'S ACCOUNT shall mean the account so
designated and established in Section 3.1 hereof.
DISBURSEMENT PROCEDURES shall mean those
procedures for disbursement from the Escrow Fund set forth on
Schedule A annexed hereto and made a part hereof.
ESCROW FUND shall mean the fund so designated
and established pursuant to Section 3.1 hereof, consisting of the
Developer's Account and the SJTA Account..
PERMITTED DEVELOPER INVESTMENTS shall mean
the investment securities and other investments set forth on
Schedule B annexed hereto and made a part hereof.
PERMITTED SJTA INVESTMENTS shall mean the
investment securities and other investments set forth on Schedule
C annexed hereto and made a part hereof.
ROAD ACCOUNT shall have the meaning set forth
in Exhibit F to the Second Amendment to the Road Development
Agreement.
SJTA ACCOUNT shall mean the account so
designated and established in Section 3.1 hereof
SJTA SPECIAL REVENUE BOND RESOLUTION shall
have the meaning set forth in the Second Amendment to the Road
Development Agreement.
SJTA SPECIAL REVENUE BONDS shall have the
meaning set forth in the Second Amendment to the Road
Development Agreement.
SJTA SPECIAL REVENUE BONDS TRUSTEE shall
mean the Trustee appointed and acting under the SJTA Special
Revenue Bond Resolution.
SJTA EARNINGS ACCOUNT shall mean the
account so designated and established with the Escrow Agent
pursuant to Section 4.3 hereof.
SECTION 2. ACCEPTANCE BY ESCROW AGENT.
2.1 The Escrow Agent agrees to act as escrow
agent hereunder. The Escrow Agent acknowledges that except as
expressly set forth in Section 3.3 and Section 4.3 hereof, the
Escrow Agent has no legal or equitable interest in the Escrow
Fund and has no right of offset with respect to the Escrow
Fund. Except with respect to the earnings and investment
income on the funds in the SJTA Account, the Escrow Agent
irrevocably waives any lien or right of offset or similar
right against the Escrow Fund.
SECTION 3. ESTABLISHMENT OF ESCROW FUND; DEPOSIT AND
RECEIPT OF MONIES BY ESCROW AGENT; STATE
DEPOSITORY ACCOUNT
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3.1 The Escrow Fund is hereby established with
the Escrow Agent and shall be held, invested and disbursed
strictly in accordance with this Escrow Agreement. The Escrow
Agent shall establish the Road Account as a separate State
depository account, separate and apart from the Escrow Fund,
which shall be held by the Escrow Agent. All funds in the Road
Account, including interest or other earnings thereon, shall,
during the term of this Agreement, be used solely for the
Road Project and shall constitute a portion of the Road
Project Funding Sources. The Escrow Agent shall establish the
Developer's Account and the SJTA Account as separate accounts
within the Escrow Fund having the respective account numbers
set forth on Schedule D annexed hereto and made a part
hereof. The Escrow Fund shall be held by the Escrow Agent
separate and apart from all other funds and accounts of the
State, the Developer and SJTA held at any time by the Escrow
Agent.
3.2 Developer hereby deposits with Escrow Agent
and Escrow Agent hereby acknowledges receipt from Developer of
$110 million in immediately available funds and the deposit
thereof in the Developer's Account. Developer, the State and
SJTA acknowledge and agree that all such funds are earmarked
for and are to be used solely for the Road Project, and none
of such funds is subject to any lien or other encumbrance.
Developer represents and warrants that all such funds are the
sole property of Developer and that none of such funds shall,
by virtue of any affirmative act or action of Developer, be
subjected at any time to any lien or other encumbrance.
3.3. SJTA hereby deposits with Escrow Agent and
Escrow Agent hereby acknowledges receipt from SJTA of $125
million in immediately available funds and the deposit thereof
in the SJTA Account. SJTA, the State and Developer acknowledge
and agree that all such funds are earmarked for and are to be
used solely for the Road Project. SJTA represents and warrants
that all such funds are the sole property of SJTA and that none
of such funds are subject to any lien or other encumbrance;
provided, however, that any and all investment income and
earnings on such funds have been pledged by SJTA to pay
interest on SJTA's obligations under that certain Loan and
Security Agreement, dated as of October 10, 1997 ("Loan Agree-
ment"), by and between SJTA, as Borrower, and CoreStates Bank,
N.A., as Lender ("Lender"). The Escrow Agent is hereby
irrevocably directed to transfer any and all investment income
and earnings on the funds in the SJTA Account to the SJTA
Earnings Account on the first business day of each calendar
month until all obligations of SJTA to Lender under the Loan
Agreement are paid in full. The State, SJTA and Developer
acknowledge and agree to Lender's claim on such investment
income and earnings and to such transfer. SJTA represents
and warrants that, except for the pledge of the income and
earnings on the funds in the SJTA Account granted by SJTA to
Lender, none of such funds shall, by virtue of any affirmative
act or action of SJTA, be subjected at any time to any lien or
other encumbrance.
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3.4 The Escrow Agent shall maintain the
Developer's Account and the SJTA Account as separate accounts of
the Escrow Fund and the Road Account as a separate account apart
from the Escrow Fund, and shall, each month, send to the State,
Developer and SJTA a statement of all transactions affecting the
Developer's Account, the SJTA Account, and the Road Account.
SECTION 4. INVESTMENT OF ESCROW FUND.
4.1 Escrow Agent shall invest the Developer's
Account for the sole benefit of Developer in such of the
Permitted Developer Investments as are listed on Schedule B as
Developer may, from time to time, direct in writing. If no
investment instructions are received by the Escrow Agent from
Developer, the Escrow Agent shall invest the Developer's Account
in the money market fund maintained by the Escrow Agent until
such investment instructions are received. Income and earnings on
the Developer's Account may be withdrawn by the Developer at any
time upon written notice to the Escrow Agent, which notice shall
include Developer's wire transfer instructions.
4.2 Escrow Agent shall invest the SJTA Account
for the sole benefit of SJTA in such of the Permitted SJTA
Investments as are listed on Schedule C as SJTA may, from time to
time, direct in writing. If no directions to invest the SJTA
Account are received by the Escrow Agent from SJTA, the Escrow
Agent shall invest amounts in the SJTA Account in the money
market fund maintained by Escrow Agent until such instructions
are received.
4.3 All income and earnings on the SJTA Account
shall be transferred to the SJTA Earnings Account, which is
hereby established by SJTA with the Escrow Agent, on the first
business day of each calendar month. The SJTA Earnings Account is
a separate account having the number specified on Schedule D
hereto and is not a part of the Escrow Fund. The SJTA Earnings
Account shall be held by the Escrow Agent separate and apart from
the Escrow Fund. The Escrow Agent shall send to the State and
SJTA a statement of the income and earnings so transferred on the
date of each transfer.
SECTION 5. APPLICATION OF ESCROW FUND.
5.1 All disbursements from the Escrow Fund,
except for the transfers to the SJTA Earnings Account and the
payment of investment income and earnings on the Developer's
Account to the Developer, shall be made by the Escrow Agent
strictly in accordance with the Disbursement Procedures annexed
hereto as Schedule A.
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SECTION 6. TERMINATION OF ESCROW FUND.
6.1 After all transfers by the Escrow Agent from
the Developer's Account have been made in accordance with the
Disbursement Procedures, all remaining moneys and any
investments, together with any income or earnings thereon, in the
Developer's Account not required for such payment, if any, shall
be transferred to the Developer.
6.2 After all transfers by the Escrow Agent from
the SJTA Account have been made in accordance with Section 3.3
hereof and the Disbursement Procedures, all remaining moneys and
any investments in the SJTA Account not required for such
payment, if any, shall be transferred to SJTA.
SECTION 7. FEES AND EXPENSES.
7.1 The Escrow Agent's fees and expenses for its
services hereunder, to the extent not paid on the date of this
Agreement, will be paid by the Developer and SJTA against
invoices presented by the Escrow Agent pursuant to separate
agreements between the Escrow Agent and the Developer and SJTA,
respectively, and no fees or expenses of the Escrow Agent will be
deducted from the amounts on deposit in the Escrow Fund.
7.2 The Escrow Agent shall have no lien or right
of set-off whatsoever upon any of the moneys, or the income or
interest thereon, on deposit in or credited to, the Escrow Fund
for the payment of fees and expenses for services rendered by the
Escrow Agent under this Agreement or otherwise.
SECTION 8. LIABILITY OF ESCROW AGENT.
8.1 The Escrow Agent shall not be liable for any
loss resulting from any investment made pursuant to this
Agreement in compliance with the provisions hereof.
8.2 The Escrow Agent may execute any powers
hereunder and perform any duties required of it through
attorneys, agents, officers or employees, and shall be entitled
to advice of counsel concerning all questions hereunder; and the
Escrow Agent shall not be answerable for the default or
misconduct of any attorney, agent or employee selected by it with
reasonable care. The Escrow Agent shall not be answerable for the
exercise of any discretion or power under this Agreement nor for
anything whatever in connection with this Agreement, except only
its own gross negligence or willful misconduct or the failure to
account for or apply, for any reason whatsoever, the moneys or
investments in the Escrow Fund as herein provided.
8.3 SJTA shall indemnify the Escrow Agent against
any liabilities which it may incur in the exercise and
performance of its powers and duties hereunder with respect to
the SJTA Account except with respect to the Escrow Agent's own
gross negligence or willful misconduct or failure to account for
or to apply the moneys or investments in the SJTA Account as
herein provided.
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8.4 The Developer shall indemnify the Escrow
Agent against any liabilities which it may incur in the exercise
and performance of its powers and duties hereunder with respect
to the Developer's Account except with respect to the Escrow
Agent's own gross negligence or willful misconduct or failure to
account for or apply the moneys or investments in the Developer's
Account as herein provided.
8.5 The Escrow Agent may act on any requisition,
resolution, notice, telegram request, consent, waiver,
certificate, statement, affidavit, voucher, bond, or other paper
or document which it in good faith believes to be genuine and to
have been passed or signed by the proper persons or to have been
prepared and furnished pursuant to any of the provisions hereof;
and the Escrow Agent shall be under no duty to make any
investigations as to any statement contained in any such
instrument, but may accept the same as conclusive evidence of the
accuracy of such statement.
SECTION 9. AMENDMENTS. This Agreement shall not
be altered or amended except in writing signed by all parties
hereto.
SECTION 10. RESIGNATION OR REMOVAL OF ESCROW AGENT.
10.1 The Escrow Agent at the time acting hereunder
may resign upon thirty (30) days' prior written notice to each of
the parties hereto of its intention to do so and, upon the
written request of the State, SJTA and Developer, shall resign;
provided, however, that no such resignation shall be effective
unless and until a successor Escrow Agent shall have been
appointed by the State, SJTA and the Developer, and shall have
accepted such appointment pursuant to a valid and binding written
agreement or instrument. In the event the Escrow Agent hereunder
shall be removed, or be dissolved, or shall be in the course of
dissolution or liquidation, or otherwise become incapable of
acting hereunder, or in case the Escrow Agent shall be taken
under the control of any public officer or officers, or of a
receiver appointed by a court, a successor, shall be appointed by
the State, SJTA and Developer pursuant to an instrument in
writing.
10.2 Each of the Developer, the State and SJTA
agree not to unreasonably refuse, upon the request of any of
them, to (a) request the resignation of the Escrow Agent pursuant
to Section 10.1, and (b) approve the appointment of a successor
Escrow Agent pursuant to Section 10.1.
10.3 In the event that no appointment of a
successor Escrow Agent shall have been made pursuant to the
foregoing provisions of this Section within thirty (30) days
after written notice of resignation of the Escrow Agent has been
given to the parties, any retiring Escrow Agent may apply to any
court of competent jurisdiction for the appointment of a
successor Escrow Agent, and such court may thereupon, after such
notice, if any, as it shall deem proper, appoint a successor
Escrow Agent.
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10.4 Every successor Escrow Agent appointed
hereunder shall execute, acknowledge and deliver to its
predecessor and to the parties hereto, an instrument in writing
accepting such appointment hereunder and thereupon such successor
Escrow Agent, without any further act, deed or conveyance, shall
become fully vested with all the rights, immunities, powers,
trusts, duties and obligations of its predecessor; but such
predecessor shall, nevertheless, on the written request of such
successor Escrow Agent or the parties hereto execute and deliver
an instrument transferring to such successor Escrow Agent all
securities and moneys held by it to its successor. Should any
transfer, assignment or instrument in writing from the parties be
required by any successor Escrow Agent for more fully and
certainly vesting in such successor Escrow Agent the estates,
rights, powers and duties hereby vested or intended to be vested
in the predecessor Escrow Agent, any such transfer, assignment
or instrument in writing shall, on request, be executed,
acknowledged and delivered by the parties.
10.5 Any corporation or association into which the
Escrow Agent, or any successor to it in the trusts created by
this Agreement, may be merged or converted or with which it or
any successor to it may be consolidated, or any corporation
resulting from any merger, conversion, consolidation or tax-free
reorganization to which the Escrow Agent or any successor to it
shall be a party shall be the successor Escrow Agent under this
Agreement without the execution or filing of any paper or any
other act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 11. TERM. This Agreement shall terminate when
all transfers from the Escrow Fund required to be made by the
Escrow Agent under the provisions hereof shall have been made.
SECTION 12. SEVERABILITY. If any one or more of the
covenants or agreements provided in this Agreement on the part of
the parties hereto to be performed should be determined by a
court of competent jurisdiction to be contrary to law, such
covenant or agreement shall be deemed and construed to be
severable from the remaining covenants and agreements herein
contained and shall in no way affect the remaining provisions of
this Agreement.
SECTION 13. PARTIES BENEFITTED. Nothing in this
Agreement is intended to or shall be construed to confer upon or
to give to any person or party other than the State, the
Developer, SJTA and the Escrow Agent, any rights, remedies or
claims under or by reason of this Agreement and this Agreement
shall be for the sole and exclusive benefit of the State, the
Developer, SJTA and the Escrow Agent. All the covenants,
promises and agreements in this Agreement contained by or on
behalf of the State, SJTA, the Developer or the Escrow Agent
shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed or not.
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SECTION 14. HEADINGS. The headings of the several
sections of this Agreement are included for ease of reference
only and shall not form a part of this Agreement.
SECTION 15. NOTICES.
15.1 Notices to any party to this Agreement shall
be in writing and shall be deemed to have been given or made when
personally delivered, sent by recognized overnight courier,
deposited in the mails, postage pre-paid, or sent by facsimile
transmission and addressed as set forth below or to such other
address as a party may by notice advise the other parties:
If to the State: New Jersey Department of Transportation
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Attention: Commissioner
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: Attorney General
State of New Jersey
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Justice Complex
P.O. 112
Trenton, New Jersey 08625
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Deputy Attorney General
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Escrow Agent: CoreStates Bank, N.A.
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FC5-4-82-12
Telecopier No.: 302-
With a copy to: Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Developer: Atlandia Design and Furnishings, Inc.
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Kuh LLP
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esquire
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
If to SJTA: South Jersey Transportation Authority
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▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
15.2 Any notice containing a change of address or
telecopier number shall be deemed given when actually received or
upon refusal to accept delivery thereof; all other notices shall
be deemed to have been given and received upon the earliest of:
(a) when actually first received or upon refusal to accept
delivery thereof, (b) on the date when delivered personally or
sent by telecopier, (c) one (1) business day after sending by
recognized overnight courier, or (d) four (4) business days after
mailing, as aforesaid.
SECTION 16. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State.
SECTION 17. COUNTERPARTS. This Agreement may be
executed in several counterparts, by manual or facsimile signa-
ture, all or any of which counterparts shall be regarded for all
purposes as one original and shall constitute and be but one and
the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be executed by their duly authorized officers
as of the date first above written.
STATE OF NEW JERSEY, acting by and through
the Department of Transportation
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
______________________________________
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SOUTH JERSEY TRANSPORTATION AUTHORITY
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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ATLANDIA DESIGN AND FURNISHINGS, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
CORESTATES BANK, N.A., as Escrow Agent
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Authorized Officer
Approved as to form this
10th day of October, 1997
/s/▇▇▇▇▇ ▇. ▇▇▇▇
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Deputy Attorney General
Approved this 10th day of
October, 1997
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
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State Treasurer
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