ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective as
of the __th day of _______, 1997, by and between The Xxxxx-College Station
Financial Holding Company, a Delaware corporation (the "Company"), The First
National Bank of Xxxxx (the "Escrow Agent"), and Xxxxxx & Xxxxxx, Incorporated
(the "Marketing Agent").
WITNESSETH:
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
$2,000,000 in Shares of common stock par value $.01 per share (the "Shares"),
and up to $3,700,000 in Units (the "Units", and the Shares and Units
collectively, the "Securities") to investors at $10.00 per Share and $1000.00
per Unit pursuant to a public offering; and
WHEREAS, the Company has agreed that (i) the subscription price paid by
subscribers will be promptly refunded to them if less than $1,500,000 in Shares
and $3,400,000 in Units have been sold by ____ _, 1997 (the "Scheduled
Termination Date"), even though the Company may elect to extend such termination
date (the "Extended Termination Date"); and (ii) in the event at least
$1,500,000 of Shares and $3,400,000 in Units are sold prior to the Scheduled
Termination Date, then all or part of the remaining Securities may be sold
thereafter but no later than the Extended Termination Date; and
WHEREAS, the Company desires to establish an escrow for such funds, 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 promises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties covenant and agree as follows:
1. Deposit with Escrow Agent.
(a) The Escrow Agent agrees that it will from time to time accept
as Escrow Agent subscription funds for the Securities (the "Escrowed
Funds") received by the Company or the Marketing Agent from
subscribers or broker-dealers representing the subscribers. All checks
shall be made payable to the Escrow Agent which will be collected by
the Escrow Agent. In the event any check does not clear normal banking
channels in due course, the Escrow Agent will promptly notify the
Company. 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 Company 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 Company for
return to the proper party. The Company in its sole and absolute
discretion may reject any subscription for Securities for any reason
prior to the release of funds in the Escrow Account to the
Company, in whole or in part, by the Escrow Agent 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. Any
investment earnings earned on these rejected subscription Securities
will be paid to the subscriber when the funds are returned.
(b) Subscription agreements for the Securities shall be reviewed
for accuracy by the Company or the Marketing Agent and, immediately
thereafter, the Company shall deliver to the Escrow Agent the
following information: (i) the name and address of the subscriber;
(ii) the number of Securities 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 stock order form.
2. Investment of Escrowed Funds. Upon receipt of each check by the Escrow
Agent, the Escrow Agent shall deposit the funds of such check in
interest bearing savings accounts, in short term certificates of
deposit issued by a bank or other short-term securities issued or
guaranteed by the United States government, as the Escrow Agent shall
in its sole and absolute discretion determine. Interest 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. The Escrow Agent shall always be
obligated to invest the funds only in instruments fully guaranteed by
the United States Government.
3. Distribution of Escrowed Funds. The Escrow Agent shall distribute the
Escrowed Funds in the amounts, at the time, and upon the conditions
hereinafter set forth in this Agreement.
(a) If at any time on or prior to the Extended Termination Date,
$1,500,000 in Shares and $3,400,000 in Units have been subscribed to
and accepted by the Company and such subscriptions shall not have been
properly rescinded, then upon the happening of such event and
subsequent written notice from the President of the Company requesting
distribution of such funds to the Company, the Escrow Agent shall
deliver the Escrowed Funds to the Company to the extent such Escrowed
Funds are collected funds. (Such date hereinafter is referred to as
the "Initial Closing Date".) In the event any portion of the Escrowed
Funds are not collected funds, then the Escrow Agent shall notify the
Company of such fact 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. An affidavit
or written certification from the President of the Company stating
that at least $1,500,000 in Shares and $3,400,000 in Units have been
timely sold and accepted and the receipt by the Escrow Agent of at
least $4,900,000 in collected funds together shall constitute
sufficient evidence for the purpose of this Agreement that such events
have occurred. In any event, the Escrow Agent shall
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deliver not less than $4,900,000 in collected funds to the Company,
except as expressly provided otherwise in Paragraph 3(b) hereof. All
investment earnings earned on the Escrowed Funds as calculated
pursuant to Paragraph 4 below will be delivered by the Escrow Agent to
the respective subscribers within thirty (30) days of the delivery of
the Escrowed Funds to the Company.
(b) If the Escrowed Funds do not, on or prior to the Extended
Termination Date, become deliverable pursuant to Paragraph 3(a) or the
President of the Company terminates the offering at any time prior to
the Extended Termination Date and such officer 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 to the respective subscribers in amounts equal to the
subscription amount theretofore paid by each of them, together with
their share of investment earnings. If the Escrowed Funds do not, on
or prior to the Scheduled Termination Date, become deliverable
pursuant to Paragraph 3(a), then upon the occurrence of the Scheduled
Termination Date and subsequent written notice from the President of
the Company requesting distribution of all or certain portions of the
Escrowed Funds (the "Rescission Notice"), the Escrow Agent shall
return such Escrowed Funds which are collected funds as directed in
writing by the Rescission Notice to the respective subscribers in
amounts equal to the subscription amount theretofore paid by each of
them, together with investment earnings calculated as described in
Paragraph 4. All uncleared checks representing Escrowed Funds which
are not collected funds as of the Extended Termination Date shall be
collected by the Escrow Agent, and together with all related
subscription documents thereof shall be delivered to the Company by
the Escrow Agent, unless the Escrow Agent is otherwise specifically
directed in writing by the Company.
(c) If after the Initial Closing Date, but on or before the
Extended Termination Date, the Escrow Agent receives Escrowed Funds
attributable to one or more of the remaining Securities and subsequent
written notice from the President of the Company requesting
distribution of such funds to the Company, then the Escrow Agent shall
deliver such Escrowed Funds only to the extent such Escrowed Funds are
collected funds and in accordance with the instructions set forth in
such notice. All investment earnings earned on the Escrowed Funds as
calculated pursuant to Paragraph 4 will be delivered by the Escrow
Agent to the respective subscribers within thirty (30) days of the
delivery of the Escrowed Funds to the Company.
(4) Distribution of Interest. If the Escrowed Funds become deliverable to
the Company or the respective subscribers pursuant to Paragraphs 3(a),
3(b) or 3(c) above, as may be applicable, the Escrow Agent shall
compute and distribute to the appropriate entity or persons as
required and directed in accordance with
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Paragraphs 3(a), 3(b) or 3(c) above a pro rata share of the investment
earnings of the Escrowed Funds. Each subscriber's pro rata share of
investment earnings shall be computed based on the amount of funds and
time invested relative to the total amount of funds collected.
Such pro rata share of investment earnings shall be distributed to the
appropriate entity or persons (with the return of subscription
amounts, if applicable), and all income tax consequences arising as a
result of investments made pursuant to this Agreement shall be
reported by the Escrow Agent in accordance with state and federal
income tax laws. Until distribution, any investment earnings on the
Escrowed Funds will be reinvested by the Escrow Agent.
5. 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 as a result of the Escrow Agent acting, or failing
to act, any error of judgment or for any mistake of fact or law;
provided, however, the Escrow Agent shall be liable for damages
arising out of its willful 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 or any action taken or omitted to be taken upon advice
of its counsel or counsel for the Company and the Marketing Agent
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 in 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, and to conform with
the provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless Escrow
Agent, its officers, directors, agents, attorneys and representatives,
against any and all losses, claims, damages, liabilities and expenses
of any and every kind or nature whatsoever, including, without
limitation, reasonable costs of investigation and counsel fees and
disbursements which may be imposed upon 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, and/or related
to any litigation whatsoever arising from this Escrow Agreement or
involving the subject matter thereof whether based upon contract, tort
negligence, comparative negligence, concurrent negligence or otherwise
and including without limitation, any actions or causes of action
instigated by subscribers and/or broker-dealers against Escrow Agent,
except that if Escrow Agent shall be found guilty of willful
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misconduct or gross negligence under this Agreement, then, in that
event, Escrow Agent shall bear only such losses, claims, damages, and
expenses attributable to Escrow Agent's willful misconduct or gross
negligence.
(c) If a dispute ensues between any of the parties hereto
including between Escrow Agent and a subscriber or subscribers 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
party by reason of this Agreement. The Escrow Agent shall be entitled
to tender into the registry or custody of any court of competent
jurisdiction, including the District Court of Brazos County, Texas,
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 shall indemnify the Escrow Agent against its
court costs, reasonable expenses and reasonable attorney's fees
incurred.
(d) The Escrow Agent may resign at any time upon giving thirty
(30) days written notice to the Company. The Company within thirty
(30) days after receiving such notice of resignation must retain a
successor Escrow Agent; otherwise 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 including subscribers 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 Escrow 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 or appointed by the court. In the event Escrow Agent does
petition the Court to name a successor escrow agent, then the Company
shall indemnify Escrow Agent and pay for all court costs, reasonable
expenses and attorney's fees incurred by Escrow Agent related thereto.
6. Appointment of Successor. The Company may, upon the delivery of thirty
(30) days written notice appointing a successor escrow agent to the
Escrow Agent, terminate the services of the Escrow Agent. 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.
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Upon appointment of a successor Escrow Agent whether under the
provisions of paragraph 5(d) or this paragraph 6, Escrow Agent shall
be relieved and released from any further obligations, duties and
liabilities under this Agreement. This Agreement shall then terminate
as to Escrow Agent, except for the provisions of paragraph 5(a) and
(b), liability of Escrow Agent and the indemnity of Escrow Agent by
the Company and the Marketing Agent, all of which shall survive such
termination of this Agreement.
7. 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:
If to the subscribers To their respective addresses as
for Securities: specified in their stock order form.
The Company: The Bryan-College Station Financial
Holding Company
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxxxx, President
With a copy to: Silver, Xxxxxxxx & Xxxx
0000 Xxx Xxxx Xxxxxx, X. X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxxxxxx, P.C.
The Escrow Agent: The First National Bank of Xxxxx
X.X. Xxx 000
Xxxxx, Xxxxx 00000
Attn: Corporate Trust Department
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Marketing Agent: Xxxxxx & Xxxxxx, Incorporated
000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
With a copy to: Bracewell & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, XX
8. Fees to Escrow Agent. In consideration of the services to be provided
by the Escrow Agent hereunder the Escrow Agent will receive from the
Company a onetime acceptance fee of $_________ and will receive an
annual administration base fee of $________, payable $________ for the
initial six (6) months, and $________ for a six (6) month extension.
Escrow Agent will receive $_____ per check for producing a check and
calculating interest on any check disbursements. Escrow Agent will
receive $_____ per deposit for any deposit activity. In addition,
Escrow Agent shall receive $_____ for each 1099 form it generates
pursuant hereto. Any out-of-pocket expenses will be billed at cost.
All fees or reimbursement for costs and expenses incurred by Escrow
Agent, including all reasonable legal fees incurred by Escrow Agent,
or any other monies whatsoever shall be paid out by the Company prior
to the delivery of any Escrowed Funds. The Escrow Agent shall also
receive payment for all other expenses and costs specifically provided
for in this Agreement pursuant to Paragraph 5 hereof.
9. Representations of the Company and The Marketing Agent. The Company
and the Marketing Agent hereby acknowledge that the status of the
Escrow Agent with respect to the offering of the Securities is that of
agent only for the limited purposes herein set forth, and hereby agree
they 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 Securities, or
has approved, endorsed or passed upon the merits of the Securities,
nor shall the Company or the Marketing Agent use the name of the
Escrow Agent in any manner whatsoever in connection with the offer or
sale of the Securities, 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 Texas. This
Agreement shall be performable and enforceable in Brazos County, Texas
and venue as to any legal proceedings shall be in Brazos County,
Texas.
(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
party at any time 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 party 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.
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. Escrow Agent shall not have any duties hereunder
except those specifically set forth herein.
(g) No interest of any party 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.
(h) The terms and provisions of paragraph 5(a) and (b) shall
survive any termination of this Agreement or appointment of a
successor Escrow Agent.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement this __th
day of _______, 1997.
COMPANY: ESCROW AGENT:
THE XXXXX-COLLEGE STATION THE FIRST NATIONAL BANK OF
FINANCIAL HOLDING COMPANY BRYAN
By: By:
------------------------------- ------------------------------
J. Xxxxxxx Xxxxxxx, President
MARKETING AGENT:
XXXXXX & XXXXXX, INCORPORATED
By:
-------------------------------
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