Exhibit 10.5
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of the 29th day of
September, 1995, by and among NORTH CAROLINA RAILROAD COMPANY (hereinafter
"Lessor"), a North Carolina corporation, NORFOLK SOUTHERN RAILWAY COMPANY
(hereinafter "NSR"), a Virginia corporation, ATLANTIC AND EAST CAROLINA RAILWAY
COMPANY (hereinafter "A&EC"), a North Carolina corporation (NSR and A&EC being
referred to collectively herein as "Lessees"), and LAWYERS TITLE OF NORTH
CAROLINA, INC. (hereinafter "Escrow Agent"), a Virginia corporation;
W I T N E S S E T H :
WHEREAS, Lessor and Lessee have negotiated a Lease Extension Agreement
(hereinafter "Extension") dated as of January 1, 1995, between and among
themselves, a copy of page 1 of said Extension being attached hereto as Exhibit
A; and
WHEREAS, the Extension has received all necessary corporate approvals
by the Lessees and four execution copies thereof have been properly executed by
duly authorized officers of the Lessees; and
WHEREAS, the Extension has been approved by the Board of
Directors of Lessor; and
WHEREAS, the Extension has been executed by Lessor subject to the
approvals thereof by the shareholders of the Lessor, pursuant to North Carolina
General Statutes ss. 55-12-02, and the Governor and the Council of State of
North Carolina pursuant to North Carolina General Statutes ss. 124-5 and
required ICC approval or exemption from Governmental approval (which approvals
to be secured are referred to collectively hereinafter as "Remaining Approval");
and
WHEREAS, the Lessees and the Lessor acknowledge the necessity for their
commitment to the terms of the Extension during the period of consideration of
the Extension for the Remaining Approval;
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the Lessor and Lessees do hereby agree as follows:
1. Lessees and Lessor irrevocably place the aforesaid four execution
copies of the Extension in escrow with the Escrow Agent, upon the terms and
conditions of this Agreement.
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2. During the term and continuance of the escrow provided for herein,
the Escrow Agent shall retain the four execution copies of the Extension
delivered to it hereunder and shall deliver the same out of escrow ONLY as
follows:
A. If at any time prior to March 31, 1997, Escrow Agent has received
Satisfactory Evidence that the Remaining Approval for the Extension has been
secured, it shall thereupon and without any further authorization, deliver two
counterpart originals of the Extension to the Lessor and two counterpart
originals of the Extension to the Lessees.
B. If at any time prior to March 31, 1997, Escrow Agent has received
Satisfactory Evidence that either (i) the Remaining Approval for the Extension
has been rejected, or (ii) the Remaining Approval cannot be obtained, Escrow
Agent shall continue to hold the said four execution copies of the Extension in
escrow until it receives notice from the President or any Vice President of
Lessor or the President or any Vice President of NSR to destroy such execution
copies, at which time, and without further authorization, Escrow Agent shall
destroy the said four execution copies of the Extension being held in escrow and
advise the parties to this Agreement in writing of such notification and
destruction.
C. If by March 31, 1997, Escrow Agent has not received Satisfactory
Evidence pursuant to paragraph A or paragraph B of this article 2 or has not
received notice to destroy the said four execution copies of the Extension as
provided in paragraph B of this article 2, the Escrow Agent shall continue to
hold in escrow the said four execution copies of the Extension under the
following terms:
i. Subject to the terms of (ii) below, until such time as
Escrow Agent receives notice from the President or any Vice
President of Lessor or the President or any Vice President of
NSR to destroy the said four execution copies of the
Extension, it shall continue to hold the same in escrow;
ii. If at any time Escrow Agent receives Satisfactory Evidence
that the Remaining Approval has been secured for the
Extension, then, as of that point in time, the right of any of
the parties hereto to call for the destruction of the said
four execution copies of the Extension shall terminate
immediately and automatically, and the Escrow Agent shall
deliver two counterpart originals of the Extension to the
Lessor and two counterpart originals of the Extension to the
Lessees;
3. As used throughout this Agreement, Satisfactory
Evidence shall consist of a certified statement from the
President or any Vice President of Lessor, on behalf of Lessor,
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or the President or any Vice President of NSR, on behalf of the Lessees, to the
effect that: (i) the Remaining Approval has been secured; or (ii) the Remaining
Approval has been rejected or cannot be obtained. Each such certified statement
must be attested by the Secretary or an Assistant Secretary of the party
submitting the certification, with its corporate seal affixed thereto. In
applying the terms and provisions of this Agreement, any determination that the
Remaining Approval cannot be obtained shall be by resolution adopted by the
Board of Directors of Lessor.
4. Should any party hereto give the Escrow Agent incorrect notice that
the Remaining Approval has been secured or that the Remaining Approval has been
rejected or cannot be obtained, the party giving such incorrect notice shall be
responsible to the other parties hereto for all damages, actual and
consequential, including but not limited to reasonable attorneys' fees,
occasioned by the giving of such incorrect notice.
5. The Lessor and Lessees agree that it is to the best interest of both
parties that the Escrow Agent be given consistent direction by both Lessor and
Lessees. To that end, Lessor and Lessees will attempt to give a joint notice of
direction to Escrow Agent, but they agree that the Escrow Agent may take action
based upon the notice of one party if permitted under the terms and provisions
set forth above.
6. Lessor and Lessees agree that Escrow Agent shall not be liable for
any losses, costs or damages which it may incur as a result of serving as Escrow
Agent hereunder, except for any losses, costs or damages arising out of its
willful default or gross negligence. Accordingly, Escrow Agent shall not incur
any liability with respect to (a) any action taken or admitted to be taken in
good faith upon advice of its counsel given with respect to any questions
relating to its duties and responsibilities, or (b) to any action taken or
admitted to be taken in reliance upon any document, including any written notice
of instruction provided for in this Agreement, not only as to its due execution
and validity and effectiveness of its provisions, but also to the truth and
accuracy of any information contained therein, which Escrow Agent shall in good
faith believe to be genuine, to have been signed or presented by a proper person
or persons and to conform with the provisions of this Agreement.
7. Each of the parties hereto hereby agrees to indemnify and hold
harmless Escrow Agent against any and all losses, claims, damages, liabilities
and expenses, including, without limitation, reasonable attorneys' fees and
disbursements, which may be asserted by it against the Escrow Agent in
connection with its serving as Escrow Agent hereunder, unless such losses,
claims, damages, liabilities and expenses are the result of Escrow Agent's
willful default or gross negligence in performing its obligations hereunder.
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8. In an event of a dispute between any of the parties hereto,
sufficient in the discretion of Escrow Agent to justify its doing so, Escrow
Agent shall be entitled to tender unto the registry or custody of any court of
competent jurisdiction all copies of the Extension in its hands held under the
terms of this Agreement, together with such legal pleadings as it deems
appropriate and thereupon be discharged.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed and sealed as of the day and year first above written.
LESSOR: NORTH CAROLINA RAILROAD COMPANY
[CORPORATE SEAL]
By: /s/ John F. McNair III
ATTEST: President
/s/ P. C. Barwick, Jr.
Secretary
LESSEES: NORFOLK SOUTHERN RAILWAY COMPANY
[CORPORATE SEAL]
By: /s/ John R. Turbyfill
ATTEST: Vice President
/s/ Sandra T. Pierce
Corporate Secretary
ATLANTIC AND EAST CAROLINA RAILWAY COMPANY
[CORPORATE SEAL]
By: /s/ John R. Turbyfill
ATTEST: Vice President
/s/ Sandra T. Pierce
Corporate Secretary
ESCROW
AGENT: LAWYERS TITLE OF NORTH CAROLINA, INC.
[CORPORATE SEAL]
By: /s/ Francis K. Coman
ATTEST: Sr. Vice President
/s/ Colon H. William
Assistant Secretary
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