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EXHIBIT 10.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into as of the 5th
day of March, 1998, by and among Southeast Commerce Holding Company, a Georgia
corporation (the "Company"), Banc Stock Financial Services, Inc. (the "Sales
Agent"), and The Bankers Bank (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
15,000,000 shares of Common Stock, par value $.01 per share (the "Shares"), to
investors at $10.00 per Share pursuant to a registered public offering;
WHEREAS, the Sales Agent intends to sell the Shares as the Company's
agent on a best efforts, all-or-none basis for 550,000 shares and on a best
efforts basis for the remaining Shares; and
WHEREAS, the Company desires to establish an escrow for funds forwarded
by subscribers for the Shares, and the Escrow Agent is willing to serve as
Escrow Agent upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
(a) The Escrow Agent agrees that it will from time to time accept, in
its capacity as escrow agent, subscription funds for the Shares (the "Escrowed
Funds") received by it from subscribers, the Sales Agent, or the Company when it
has received checks from subscribers. All checks shall be made payable to the
Escrow Agent. If any check does not clear normal banking channels in due course,
the Escrow Agent will promptly notify the Company and the Sales Agent. Any check
which does not clear normal banking channels and is returned by the drawer's
bank to Escrow Agent will be promptly turned over to the Sales Agent, along with
all other subscription documents relating to such check. Any check received that
is made payable to a party other than the Escrow Agent shall be returned to the
Sales Agent for return to the proper party. The Company in its sole and absolute
discretion may reject any subscription for Shares for any reason and upon such
rejection it shall notify and instruct the Escrow Agent in writing to return the
Escrowed Funds by check made payable to the subscriber. If the Company rejects
or cancels any subscription for any reason the Company will retain any interest
earned on the Escrowed Funds to help defray organizational costs.
(b) Subscription agreements for the Shares shall be reviewed for
accuracy by the Sales Agent and, immediately thereafter, the Sales Agent shall
deliver to the Escrow Agent the
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following information: (i) the name and address of the subscriber; (ii) the
number of Shares subscribed for by such subscriber; (iii) the subscription price
paid by such subscriber; (iv) the subscriber's tax identification number
certified by such subscriber; and (v) a copy of the subscription agreement.
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check by the
Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or
short-term certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation or another agency of the United States government,
short-term securities issued or fully guaranteed by the United States
government, federal funds, or such other investments as the Escrow Agent, the
Sales Agent, and the Company shall agree. The Company shall provide the Escrow
Agent with instructions from time to time concerning in which of the specific
investment instruments described above the Escrowed Funds shall be invested, and
the Escrow Agent shall adhere to such instructions. Unless and until otherwise
instructed by the Company, the Escrow Agent shall by means of a "sweep" or other
automatic investment program invest the Escrowed Funds in blocks of $10,000 in
federal funds. Interest and other earnings shall start accruing on such funds as
soon as such funds would be deemed to be available for access under applicable
banking laws and pursuant to the Escrow Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall distribute
the Escrowed Funds in the amounts, at the times, and upon the conditions
hereinafter set forth in this Agreement.
(a) If at any time on or prior to the expiration date of the offering
as described in the prospectus relating to the offering, (the "Closing Date"),
(i) the Escrow Agent has certified to the Company and the Sales Agent in writing
that the Escrow Agent has received at least $5,500,000 in Escrowed Funds, and
(ii) the Escrow Agent has received a certificate from the President or another
authorized representative of the Company that all other conditions to the
release of funds as described in the Company's Registration Statement filed with
the Securities and Exchange Commission pertaining to the public offering have
been met, then the Escrow Agent shall deliver the Escrowed Funds to the Company
to the extent such Escrowed Funds are collected funds. If any portion of the
Escrowed Funds are not collected funds, then the Escrow Agent shall notify the
Company and the Sales Agent of such facts and shall distribute such funds to the
Company only after such funds become collected funds. For purposes of this
Agreement, "collected funds" shall mean all funds received by the Escrow Agent
which have cleared normal banking channels. In all events, the Escrow Agent
shall deliver not less than $5,500,000 in collected funds to the Company, except
as provided in Paragraphs 3(b) and 3(c) hereof.
(b) In lieu of collected funds, the organizers of the Company may pay
for subscriptions by assigning to the Company any portion of any obligation of
the Company to repay any advances made by such organizers to the Company to fund
organizational or other expenses and delivering such assignment to the Escrow
Agent to be held hereunder.
(c) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable
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to the Company based on failure to meet the conditions described in Paragraph
3(a), or if the Company terminates the offering at any time prior to the Closing
Date and delivers written notice to the Escrow Agent of such termination (the
"Termination Notice"), the Escrow Agent shall return the Escrowed Funds which
are collected funds as directed in writing by the Company and the Sales Agent to
the respective subscribers in amounts equal to the subscription amount paid by
each of them. All uncleared checks representing Escrowed Funds which are not
collected funds as of the Initial Closing Date shall be collected by the Escrow
Agent, and together with all related subscription documents thereof shall be
delivered to the Sales Agent by the Escrow Agent, unless the Escrow Agent is
otherwise specifically directed in writing by the Company and the Sales Agent.
The Company is aware and understands that, until it becomes entitled to receive
the Escrowed Funds as described in Paragraph 3(a), it is not entitled to any
Escrowed Funds and that no amounts deposited in the Escrow Account shall become
the property of the Company or any other entity or be subject to the debts of
the Company or any other entity.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed
Funds shall be retained by the Company.
5. FEES OF ESCROW AGENT. The Company shall pay the Escrow Agent a fee
of $2,000 for its services hereunder. The escrow account will accrue a service
charge of $15.00 per month. In addition, a $20.00 per check fee will be charged
if the escrow account has to be refunded due to a failure to complete the
subscription. All of these fees are payable upon the release of the Escrowed
Funds, and the Escrow Agent is hereby authorized to deduct such fees from the
Escrowed Funds prior to any release thereof pursuant to Section 3 hereof.
6. LIABILITY OF ESCROW AGENT.
(a) In performing any of its duties under this Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent shall not be
liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its gross negligence under this Agreement. Accordingly, the Escrow
Agent shall not incur any such liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of its counsel or counsel for the
Company which is given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder; or (ii) any action taken or
omitted to be taken in reliance upon any document, including any written notice
or instructions provided for this Escrow Agreement, not only as to its due
execution and to the validity and effectiveness of its provisions but also as to
the truth and accuracy of any information contained therein, if the Escrow Agent
shall in good faith believe such document to be genuine, to have been signed or
presented by a proper person or persons, and to conform with the provisions of
this Agreement.
(b) The Company and the Sales Agent agree to indemnify and hold
harmless the Escrow Agent against any and all losses, claims, damages,
liabilities and expenses, including, without limitation, reasonable costs of
investigation and counsel fees and disbursements which
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may be imposed by the Escrow Agent or incurred by it in connection with its
acceptance of this appointment as Escrow Agent hereunder or the performance of
its duties hereunder, including, without limitation, any litigation arising from
this Escrow Agreement or involving the subject matter thereof; except, that if
the Escrow Agent shall be found guilty of willful misconduct or gross negligence
under this Agreement, then, in that event, the Escrow Agent shall bear all such
losses, claims, damages and expenses.
(c) If a dispute ensues between any of the parties hereto which, in the
opinion of the Escrow Agent, is sufficient to justify its doing so, the Escrow
Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a part by reason of this Agreement. The
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this Agreement, and to file such legal proceedings as it deems
appropriate, and shall thereupon be discharged from all further duties under
this Agreement. Any such legal action may be brought in any such court as the
Escrow Agent shall determine to have jurisdiction thereof. In connection with
such dispute, the Company and the Sales Agent shall indemnify the Escrow Agent
against its court costs and reasonable attorney's fees incurred.
(d) The Escrow Agent may resign at any time upon giving 30 days written
notice to the Company and the Sales Agent. If a successor escrow agent is not
appointed by Company within 30 days after notice of resignation, the Escrow
Agent may petition any court of competent jurisdiction to name a successor
escrow agent and the Escrow Agent herein shall be fully relieved of all
liability under this Agreement to any and all parties upon the transfer of the
Escrowed Funds and all related documentation thereto, including appropriate
information to assist the successor escrow agent with the reporting of earnings
of the Escrowed Funds to the appropriate state and federal agencies in
accordance with the applicable state and federal income tax laws, to the
successor escrow agent designated by the Company appointed by the court.
7. APPOINTMENT OF SUCCESSOR. The Company and the Sales Agent may,
upon the delivery of 30 days written notice appointing a successor escrow agent
to the Escrow Agent, terminate the services of the Escrow Agent hereunder. In
the event of such termination, the Escrow Agent shall immediately deliver to the
successor escrow agent selected by the Company all documentation and Escrowed
Funds including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to a
third party pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other communications or
deliveries required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given three days after having been deposited
for mailing if sent by registered mail, or certified mail return receipt
requested, or delivery by courier, to the respective addresses set forth below:
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IF TO THE SUBSCRIBERS FOR SHARES: To their respective addresses as specified in
their Subscription Agreements.
THE COMPANY:
Southeast Commerce Holding Company
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx
WITH A COPY TO: Xxxxxx Xxxxxxx Xxxxx & Scarborough, LLP
Suite 1400
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
THE ESCROW AGENT: The Bankers Bank
0000 Xxxxx Xxxxx Xxxx
600 Paces Summit
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Senior Vice President
THE SALES AGENT: Banc Stock Financial Services, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
WITH A COPY TO: Xxxxxxx Xxxxxxx & Xxxxxx, LLP
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
9. REPRESENTATIONS OF THE COMPANY. The Company hereby acknowledges that
the status of the Escrow Agent with respect to the offering of the Shares is
that of agent only for the limited purposes herein set forth, and hereby agrees
it will not represent or imply that the Escrow Agent, by serving as the Escrow
Agent hereunder or otherwise, has investigated the desirability or advisability
in an investment in the Shares, or has approved, endorsed or passed upon the
merits of the Shares, nor shall the Company use the name of the Escrow Agent in
any manner whatsoever in connection with the offer or sale of the Shares, other
than by acknowledgment that it has agreed to serve as Escrow Agent for the
limited purposes herein set forth.
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10. GENERAL.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement sets forth the entire agreement and understanding of
the parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any part at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver in any one or more instances by
any part of any condition, or of the breach of any term contained in this
Agreement, whether by conduct or otherwise, shall be deemed to be, or construed
as, a further or continuing waiver of any such condition or breach, or a waiver
of any other condition or of the breach of any other terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto and
their respective administrators, successors and assigns. The Escrow Agent shall
be bound only by the terms of this Escrow Agreement and shall not be bound by or
incur any liability with respect to any other agreement or understanding between
the parties except as herein expressly provided. The Escrow Agent shall not have
any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in
the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
SOUTHEAST COMMERCE HOLDING THE BANKERS BANK
COMPANY
By: By:
-------------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief Title: Senior Vice President
Executive Officer
SALES AGENT:
BANC STOCK FINANCIAL SERVICES, INC.
By:
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Name:
Title:
