Escrow - RTC Auction.htm

COMMERCIAL AUCTION

THIS DEPOSIT ESCROW AGREEMENT (hereinafter "Agreement"), dated as of _____________________ is executed by and between the _____________ Title Insurance Company, as ESCROW AGENT, ____________________ the BUYER, and _______________________ the SELLER.

RECITALS

WHEREAS, BUYER was the highest bidder at the auction (the "Auction") held on ____________ for the real property and related personal property owned by SELLER located in the City of _________ County of ___________ State of _________ , further identified on Schedule A hereto, known hereinafter as the "Property";

WHEREAS, BUYER has executed a Purchase and Sale Agreement ( the Contract for the purchase and sale of the Property in accordance with the Procedures, Terms and Conditions of Sale (the "Terms" ) for the Auction; and

WHEREAS, BUYER desires to deposit the Earnest Money Deposit (as defined herein) with ESCROW AGENT in accordance with the Terms of this Agreement.

AGREEMENT

1.Appointment of ESCROW AGENT - BUYER and SELLER hereby appoint and designate ESCROW AGENT to act as escrow agent under this Agreement, and ESCROW AGENT agrees to act as escrow agent hereunder and to comply with the provisions of this Agreement.

2. Good Faith Deposit -

(a) Concurrent with the execution and delivery of this Agreement by BUYER at the Auction, BUYER is wire transferring to the ESCROW AGENT a Good Faith Deposit in the amount of _____________ Dollars ($_________) to be held by ESCROW AGENT in accordance with this Agreement. Wiring instructions of the ESCROW AGENT are set forth on Exhibit A to this Agreement. Notice of the wiring of funds to ESCROW AGENT is to be provided simultaneously to ESCROW AGENT by notice sent by facsimile to at facsimile number _____________ .

(b) If SELLER does not execute and deliver the Contract on the Auction Date because the Purchase Price is less than the published reserve for the Property at the Auction, then the Good Faith Deposit shall be deposited by ESCROW AGENT in accordance with Section 2(c) of this Agreement and it is to be held by ESCROW AGENT until SELLER either (a) completes, signs and delivers the Contract in accordance with the terms thereof, or (b) rejects the Contract. If and when SELLER rejects the Contract, the ESCROW AGENT shall, on receipt of written notice from SELLER that the Contract has been rejected, return the Good Faith Deposit to BUYER by wire transfer in accordance with wiring instructions set forth on Exhibit B of this Agreement for the BUYER or as otherwise provided ESCROW AGENT in writing by BUYER.

(c ) The ESCROW AGENT shall deposit the Good Faith Deposit in an interest bearing account (the "Escrow Account") at _______________ (name of Bank) in the City and State of New York. No interest shall be earned on the Good Faith Deposit or on the Additional Good Faith Deposit hereinafter defined) before their deposit in the Escrow Account by the ESCROW AGENT.

3. Additional Good Faith Deposit - BUYER covenants that it shall within three business days of the effective date of the Contract wire transfer the amount of $______________ to the ESCROW AGENT. Notice of the wire transfer is to be given ESCROW AGENT in the manner provided in Paragraph 2(a) of this Agreement. None of the interest earned on the Good Faith Deposit shall be credited towards the Additional Good Faith Deposit.

The Additional Good Faith Deposit is to be deposited by Escrow Agent in the Escrow Account. Escrow Agent shall notify the SELLER in writing by facsimile upon ESCROW AGENT's receipt of the Additional Good Faith Deposit. Failure by BUYER to timely tender the balance of the Additional Good Faith Deposit will result, at the SELLER'S option, in the BUYER'S default under the Contract.

4. Earnest Money Deposit - The Good Faith Deposit, the Additional Good Faith Deposit, if any, and any and all interest that is earned thereon (collectively the "Earnest Money Deposit") is to be held in escrow under this Agreement and disbursed (except as otherwise provided in Paragraphs 5 and 6 of this Agreement) in accordance with the terms of the Contract within a reasonable time after ESCROW AGENT'S receipt of written notice to disburse with disbursement instructions from both SELLER and BUYER.

All interest earned will accrue to and be reported to the Internal Revenue Service for the account of the BUYER. The Buyer's Social Security/Federal Identification Number is ______________ . BUYER has executed Internal Revenue Service Form W-9 annexed hereto.

ESCROW AGENT shall not be responsible for any penalties or loss of principal or interest or for any delays in the withdrawal of the funds which may be imposed as the result of the opening of the account in which the Earnest Money Deposit is deposited or the redeeming of that investment, nor shall ESCROW AGENT be liable for any loss or impairment of the Earnest Money Deposit while those funds are in the course of collection or while those funds are on deposit if such loss or impairment results from the failure, insolvency or suspension of the financial institution in which the funds are held.

ESCROW AGENT will invest the Good Faith Deposit and the Additional Good Faith Deposit after its receipt of (a) this Agreement, or counterparts thereof, executed by the SELLER, BUYER and ESCROW AGENT, and (b) a service charge of $ ____________. The service charge can be wired transferred to ESCROW AGENT simultaneously with the wire transfer of the Good Faith Deposit.

5. SELLER'S Notice -If SELLER notifies ESCROW AGENT in writing that SELLER is entitled to the Earnest Money Deposit pursuant to the terms of the Contract on account of a default t on the part of BUYER or a termination (said notice hereinafter referred to as the "SELLER'S Notice"), then ESCROW AGENT shall promptly provide BUYER with a copy of SELLER'S Notice. BUYER shall have fifteen (15) business days after BUYER'S receipt by facsimile or otherwise of a copy from ESCROW AGENT of the SELLER'S Notice to send notice to ESCROW AGENT objecting to the release of the Earnest Money Deposit to SELLER (said notice hereinafter referred to as the "BUYER'S Objection Notice"). If Escrow Agent does not receive a BUYER'S Objection Notice by facsimile or otherwise within said fifteen day period, then ESCROW AGENT shall pay the Earnest Money Deposit to SELLER. If, however, ESCROW AGENT does receive a BUYER'S Objection Notice within said fifteen day period, ESCROW AGENT shall not release the Earnest Money Deposit except (a) in accordance with written instructions of SELLER and BUYER signed jointly or in counterparts, (b) in accordance with the terms of a final court order, or (c) by depositing the same into court.

6. BUYER'S Notice. If BUYER notifies ESCROW AGENT in writing that BUYER is entitled to the Earnest Money Deposit pursuant to the terms of the Contract on account of a default of the part of SELLER or a termination (said notice hereinafter referred to as the "BUYER'S Notice"), then ESCROW AGENT shall promptly provide SELLER with a copy of BUYER'S Notice. SELLER shall have fifteen (15) business days after SELLER'S receipt by facsimile or otherwise of a copy from ESCROW AGENT of the BUYER'S Notice to send notice to ESCROW AGENT objecting to the release of the Earnest Money Deposit to BUYER (said notice hereinafter referred to as the "SELLER'S Objection Notice"). If Escrow Agent does not receive a SELLER'S Objection Notice by facsimile or otherwise within said fifteen days period, then ESCROW AGENT shall pay the Earnest Money Deposit to BUYER. If, however, ESCROW AGENT does receive a SELLER'S Objection Notice within said fifteen day period, ESCROW AGENT shall not release the Earnest Money Deposit except (a) in accordance with written instructions of SELLER and BUYER signed jointly or in counterparts, (b) in accordance with the terms of a final court order, or (c) by depositing the same into court.

7. Failure to Deliver Objection Notice - The non-receipt by ESCROW AGENT of an Objection Notice from the SELLER or the BUYER as applicable, within the fifteen day period aforesaid shall not serve as a waiver of any claims or defenses that the SELLER and the BUYER may have against one another.

8. Reliance on Notices - In performing its duties under this Agreement, ESCROW AGENT may rely upon any notices given to Escrow Agent under this Agreement reasonably believed by ESCROW AGENT to be genuine and to have been signed and given by the proper person or persons. ESCROW AGENT shall be under no duty to make any inquiry as to the form, genuineness, proper execution or accuracy of any such notice. Except as otherwise provided in this Agreement, notices are to be given to the person(s) set forth on the Signature Pages annexed to this Agreement, both by facsimile and by depositing the notice for delivery to such person(s) with a nationally recognized overnight delivery service. Notice may be provided by counsel for the parties hereto.

9. ESCROW AGENT'S Liability - ESCROW AGENT shall not be liable for any action taken by it in good faith, reasonably believed by ESCROW AGENT to be authorized or within the rights and powers conferred by this Agreement. ESCROW AGENT shall nave full and complete protection and be held harmless by SELLER and BUYER for any actions taken or suffered by ESCROW AGENT in good faith. In acting as escrow agent, ESCROW AGENT may be but is not required to, consult with counsel of its own choice.

10. ESCROW AGENT Resignation - ESCROW AGENT may resign as escrow agent and shall have no further duties or obligations under this Agreement upon the effective date of its resignation by giving notice of its resignation which notice shall state the date upon which its resignation shall be effective. Such date shall be no earlier that thirty (30) calendar days subsequent to the date of said notice. Further, ESCROW AGENT may be removed as ESCROW AGENT by SELLER at any time with or without cause in SELLER'S sole and absolute discretion.

In the event that ESCROW AGENT resigns or is discharged, SELLER shall promptly arrange for an independent person or entity, chosen by SELLER in SELLER'S sole and absolute discretion to assume the duties of ESCROW AGENT. The new escrow agent shall execute an instrument evidencing its assumption of the duties of ESCROW AGENT under this Agreement. SELLER shall notify BUYER and ESCROW AGENT of the appointment of the new escrow agent and, promptly after its receipt of such notice, ESCROW AGENT shall deliver the Earnest Money Deposit to the new escrow agent. If ESCROW AGENT does not receive notice of the appointment of the new escrow agent by the affective date of the ESCROW AGENT'S resignation, then the ESCROW AGENT may, in its discretion, deposit the Earnest Money Deposit with a court in the County, City and State of New York.

11. A service charge of $____________ is being paid to ESCROW AGENT concurrent with the execution of this Agreement. ESCROW AGENT shall also be reimbursed its reasonable expenses incurred in connection with this Agreement and the performance of its duties as escrow agent including, without limitation, court costs and reasonable attorney's fees incurred (as provided in Paragraph 13 hereof). Any expenses incurred shall be payable by BUYER within fifteen (15) business days of BUYER'S receipt of an invoice therefor from ESCROW AGENT and are payable whether or not ESCROW AGENT is then acting as escrow agent and irrespective of the reason that ESCROW AGENT may no longer be the escrow agent. If the Earnest Money Deposit is payable to BUYER, the expenses incurred may by paid, in whole or in part, and in the sole discretion of ESCROW AGENT, from the Earnest Money Deposit without limiting the obligation of the BUYER to make payment of any balance due.

12. Indemnification - BUYER and SELLER shall jointly and severally defend, indemnify and hold ESCROW AGENT harmless against any loss, cost or damage, liability or expense incurred by ESCROW AGENT not caused by its willful misconduct or gross negligence, arising out of or in connection with its entering into this Agreement and the carrying out of its duties hereunder, including the costs and expenses of defending itself against any claim of liability or participating in any legal proceedings in connection herewith (including court costs and reasonable attorneys' fees).

13. Withdrawals - No party shall have the right to withdraw any monies deposited by it with ESCROW AGENT except as otherwise expressly provided herein.

14. Further Requirements - SELLER and BUYER shall execute any and all documents, and perform any and all acts, reasonably necessary or appropriate to consummate the sale and purchase of the Property pursuant to the Contract and this Agreement. In furtherance thereof, SELLER and BUYER shall promptly provide ESCROW AGENT with further instructions or information on written request therefor by facsimile by ESCROW AGENT.

15. Entire Agreement - This Agreement and the Contract constitute all of the agreements between SELLER and BUYER and supersedes any and all prior discussions, understandings or agreements between the SELLER and BUYER. Modifications to this AGREEMENT must be by a writing signed by SELLER, BUYER and the ESCROW AGENT at that time acting hereunder.

16. Successors and Assigns - This Agreement shall bind and be for the benefit of SELLER and BUYER and their respective successors and assigns. ESCROW AGENT is not, however, to recognize a successor or an assign of either SELLER or BUYER as a party to this Agreement without first receiving written notice to do so from in each instance both SELLER and BUYER.

17. Governing Law - This Agreement shall be governed by and construed according to the laws of the State wherein the Property is located.

18. Counterparts - To facilitate execution, this Agreement may be executed in as many counterparts as may be required. All counterparts shall collectively constitute a single Agreement.

IN WITNESS WHEREOF ESCROW AGENT, SELLER and BUYER have caused this Agreement to be executed in their respective names, all as of the first date set forth above.

SIGNATURES
SCHEDULE A - Description of Premises
EXHIBITS A and B - Wiring Instructions

Prepared for an RTC Commercial Auction
By: Michael J. Berey