ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective
as of the ___ day of ______________, 1997, by and between Buckhead Community
Bancorp, Inc., a Georgia corporation (the "Company"), and SunTrust Bank,
Atlanta, a Georgia banking corporation (the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, the Company proposes to offer and sell (the "Offering") up to
2,400,000 shares of common stock, $.01 par value per share (the "Shares"), to
investors (the "Investors") at $5.00 per Share pursuant to a registered public
offering; and
WHEREAS, the Company desires to establish an escrow for funds forwarded by
subscribers for 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.
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(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 through or by the Company. All checks
shall be made payable to the Escrow Agent for Buckhead Community Bancorp, Inc.
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 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 Company and, immediately thereafter, the Company shall deliver
to the Escrow Agent the following information in a typed format: (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.
(c) Subscribers may pay a deposit on their subscription price after
receipt of the Preliminary Prospectus used by the Company in the offering, but
prior to the delivery of a final Prospectus and confirmation of subscription to
the subscribers. Such deposit will be at least 10%
of the total subscription price for the number of shares subscribed for, and
will be refundable if the subscription is not confirmed by the subscriber when
the final Prospectus becomes available.
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check by
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the Escrow Agent, the Escrow Agent shall invest the funds in the Escrow Agent's
STI Classic Government Money Market Fund or such other investments as the
Company shall direct in writing. The Escrow Agent warrants that its STI Classic
Government Money Market Fund is invested only in short-term securities issued or
fully guaranteed by the United States government. 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. 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
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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 September 30, 1998, or such
subsequent extension date not later than March 31, 1999 (the "Closing Date"),
(i) the Escrow Agent has certified to the Company in writing that the Escrow
Agent has received at least $8,000,000 in Escrowed Funds which are collected
funds, and (ii) the Escrow Agent has received a certificate from the President
or the Chairman of the Board 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 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 $8,000,000 in collected funds to the Company, except as provided in
Paragraph 3(b) hereof.
(b) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable 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 to the respective subscribers in amounts equal to the subscription
amount theretofore 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 Company by the Escrow
Agent, unless the Escrow Agent is otherwise specifically directed in writing by
the Company.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed
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Funds shall be distributed to subscribers simultaneous with any release of
Escrowed Funds to such subscribers based on the proportion which the amount of
collected funds held in escrow for the benefit of each
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subscriber and the number of days such collected funds have been held bears to
the total of the daily collected balances of Escrowed Funds during the term of
this Agreement. Any interest earned on Escrowed Funds released to the Company
pursuant to Section 3(a) shall also be released to the Company, and no
subscriber shall have any right to receive such interest.
5. FEES OF ESCROW AGENT. The Company shall pay the Escrow Agent an
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annual fee of $1,500.00 for its services hereunder. In addition, the Company
will pay a service charge of $5.00 per subscriber. 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.
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(a) Escrow Agent undertakes to perform only such duties as are
expressly set forth herein, and no additional duties or obligations shall be
implied hereunder. In performing its duties under this Agreement, or upon the
claimed failure to perform any of its duties hereunder, Escrow Agent shall not
be liable to anyone for any damages, losses or expenses which may be incurred as
a result of Escrow Agent so acting or failing to so act; provided, however,
Escrow Agent shall not be relieved from liability for damages arising out of its
proven gross negligence or willful misconduct under this Agreement. Escrow Agent
shall in no event incur any liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of legal counsel, which may be
counsel to any party hereto, given with respect to any question relating to the
duties and responsibilities of Escrow Agent hereunder or (ii) any action taken
or omitted to be taken in reliance upon any instrument delivered to Escrow Agent
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. Escrow Agent shall not be bound in any way by any other
agreement or contract between the Company and the Investors, whether or not
Escrow Agent has knowledge of any such agreement or contract.
(b) The Company warrants to and agrees with Escrow Agent that, unless
otherwise expressly set forth in this Agreement, there is no security interest
in the Escrowed Funds or any part of the Escrowed Funds; no financing statement
under the Uniform Commercial Code of any jurisdiction is on file in any
jurisdiction claiming a security interest in or describing, whether specifically
or generally, the Escrowed Funds or any part of the Escrowed Funds; and the
Escrow Agent shall have no responsibility at any time to ascertain whether or
not any security interest exists in the Escrowed Funds or any part of the
Escrowed Funds or to file any financing statement under the uniform Commercial
Code of any jurisdiction with respect to the Escrowed Funds or any part thereof.
(c) As an additional consideration for and as an inducement for
Escrow Agent to act hereunder, it is understood and agreed that, in the event of
any disagreement between the parties to this Agreement or among them or any
other person(s) resulting in adverse claims and demands being made in connection
with or for any money or other property involved in or affected by this
Agreement, Escrow Agent shall be entitled, at the option of Escrow Agent, to
refuse to comply with the demands of such parties, or any of such parties, so
long as such disagreement shall continue. In such event, Escrow Agent shall make
no delivery or other disposition of the Escrowed Funds or any part of such
Escrowed Funds. Anything herein to the contrary notwithstanding, Escrow Agent
shall not be or become liable to such parties or any of them for the
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failure of Escrow Agent to comply with the conflicting or adverse demands of
such parties or any of such parties.
Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Escrowed Funds or any part thereof or to
otherwise act hereunder, as stated above, unless and until:
1. the rights of such parties have been finally settled by binding
arbitration or duly adjudicated in a court having jurisdiction of
the parties and the Escrowed Funds; or
2. the parties have reached an agreement resolving their differences
and have notified Escrow Agent in writing of such agreement and
have provided Escrow Agent with indemnity satisfactory to Escrow
Agent against any liability, claims or damages resulting from
compliance by Escrow Agent with such agreement.
In the event of a disagreement between such parties as described
above, Escrow Agent shall have the right, in addition to the rights described
above and at the option of Escrow Agent, to tender into the registry or custody
of any court having jurisdiction, all money and property comprising the Escrowed
Funds and may take such other legal action as may be appropriate or necessary,
in the opinion of Escrow Agent. Upon such tender, the parties hereto agree that
Escrow Agent shall be discharged from all further duties under this Agreement;
provided, however, that the filing of any such legal proceedings shall not
deprive Escrow Agent of its compensation hereunder earned prior to such filing
and discharge of Escrow Agent of its duties hereunder.
(d) The Company agrees to pay Escrow Agent for its ordinary services
hereunder the fees determined in accordance with and payable as specified in
Section 5 hereof. In addition, the Company agrees to pay to Escrow Agent its
expenses incurred in connection with this Agreement, including but not limited
to the actual cost of legal services in the event Escrow Agent deems it
necessary to retain counsel. Such expenses shall be paid to Escrow Agent within
60 days following receipt by the Company of a written statement setting forth
such expenses.
The Company hereto agrees that, in the event any controversy arises
under or in connection with this Agreement or the Escrowed Funds or Escrow Agent
is made a party to or intervenes in any litigation pertaining to this Agreement
or the Escrowed Funds, to pay to Escrow Agent reasonable compensation for its
extraordinary services and to reimburse Escrow Agent for all costs and expenses
associated with such controversy or litigation.
As security for all fees and expenses of Escrow Agent hereunder and
any and all losses, claims, damages, liabilities and expenses incurred by Escrow
Agent in connection with its acceptance of appointment hereunder or with the
performance of its obligations under this Agreement and to secure the obligation
of the parties hereto to indemnify Escrow Agent as set forth in paragraph 6(f)
hereof, Escrow Agent is hereby granted a security interest in and a lien upon
the Escrowed Funds, which security interest and lien shall be prior to all other
security interests, liens or claims against the Escrowed Funds or any part
thereof.
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(e) Escrow Agent may resign at any time from its obligations under
this Agreement by providing written notice to the parties hereto. Such
resignation shall be effective on the date set forth in such written notice
which shall be no earlier than 30 days after such written notice has been given.
In the event no successor escrow agent has been appointed on or prior to the
date such resignation is to become effective, Escrow Agent shall be entitled to
tender into the custody of a court of competent jurisdiction all assets then
held by it hereunder and shall thereupon be relieved of all further duties and
obligations under this Agreement. Escrow Agent shall have no responsibility for
the appointment of a successor escrow agent hereunder.
(f) Escrow Agent shall have no obligation to take any legal action in
connection with this Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would or might involve
it in any cost, expense, loss or liability unless security and indemnity, as
provided in this paragraph, shall be furnished.
The Company agrees to indemnify Escrow Agent and it officers,
directors, employees and agents and save Escrow Agent and its officers,
directors, employees and agents harmless from and against any and all Claims (as
hereinafter defined) and Losses (as hereinafter defined) which may be incurred
by Escrow Agent or any of such officers, directors, employees or agents as a
result of Claims asserted against Escrow Agent or any of such officers,
directors, employees or agents as a result of or in connection with Escrow
Agent's capacity as such under this Agreement by any person or entity. For the
purposes hereof, the term "Claims" shall mean all claims, lawsuits, causes of
action or other legal actions and proceedings of whatever nature brought against
(whether by way of direct action, counterclaim, cross action or impleader)
Escrow Agent or any such officer, director, employee or agent, even if
groundless, false or fraudulent, so long as the claim, lawsuit, cause of action
or other legal action or proceeding is alleged or determined, directly or
indirectly, to arise out of, result from, relate to or be based upon, in whole
or in part: (a) the acts or omissions of the Company, (b) the appointment of
Escrow Agent as escrow agent under this Agreement, or (c) the performance by
Escrow Agent of its powers and duties under this Agreement; and the term
"Losses" shall mean losses, costs, damages, expenses, judgments and liabilities
of whatever nature (including but not limited to attorneys', accountants' and
other professionals' fees, litigation and court costs and expenses and amounts
paid in settlement), directly or indirectly resulting from, arising out of or
relating to one or more Claims. Upon the written request of Escrow Agent or any
such officer, director, employee or agent (each referred to hereinafter as an
"Indemnified Party"), the Company agrees to assume the investigation and defense
of any Claim, including the employment of counsel acceptable to the applicable
Indemnified Party and the payment of all expenses related thereto and,
notwithstanding any such assumption, the Indemnified Party shall have the right,
and the Company agrees to pay the cost and expense thereof, to employ separate
counsel with respect to any such Claim and participate in the investigation and
defense thereof in the event that such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Company. The Company hereby agrees that the indemnifications and protections
afforded Escrow Agent in this section shall survive the termination of the
Agreement.
7. APPOINTMENT OF SUCCESSOR. The Company may, upon the delivery of
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thirty (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
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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
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or deliveries required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (a) upon personal delivery, if
delivered by hand, (b) three days after the date of deposit in the mails,
postage prepaid, if mailed by registered mail, certified mail return receipt
requested, or first class mail, or (c) the next business day if sent by a
prepaid overnight courier service, and in each case at the respective addresses
set forth below or such other address as such party may have fixed by notice:
IF TO THE SUBSCRIBERS To their respective addresses as specified in their
FOR SHARES: Subscription Agreements.
THE COMPANY: Buckhead Community Bancorp, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Phone:
Fax:
WITH A COPY TO: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
THE ESCROW AGENT: SunTrust Bank, Atlanta
Room 400 - Annex
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Corporate Trust Department
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9. REPRESENTATIONS OF THE COMPANY.
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(a) In order to induce and as partial consideration for Escrow
Agent's acceptance of this Agreement, the Company acknowledges that Escrow Agent
is serving as escrow agent for the limited purposes set forth herein and each
represent, covenant and warrant to Escrow Agent that no statement or
representation, whether oral or in writing, has been or will be made to any
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prospective subscribers for any of the Shares to the effect that Escrow Agent
has investigated the desirability or advisability of investment in the Shares or
approved, endorsed or passed upon the merits of such investment or is otherwise
involved in any manner with the transactions or events contemplated in any sale
documents, disclosure statements subscription agreements or related document,
other than as Escrow Agent under this Agreement. It is further agreed that no
party shall in any way use the name "SunTrust Bank, Atlanta" or "SunTrust Banks,
Inc." in any sales presentation or literature except in the context of the
duties of the Escrow Agent as escrow agent of the offering of the Shares in the
strictest sense. Any breach or violation of the paragraph shall be grounds for
immediate termination of the Agreement by Escrow Agent in accordance with the
terms and provisions set forth herein.
(b) Without limitation to any release, indemnification or hold
harmless provision in favor of Escrow Agent as elsewhere provided in this
Agreement, the Company covenants and agrees to indemnify Escrow Agent and its
officers, directors, employees and agents and to hold Escrow Agent and such
officers, directors, employees and agents harmless from and against all
liability, cost, losses and expenses, including but not limited to attorneys'
fees and expenses which are suffered or incurred by Escrow Agent or any such
officer, director, employee or agent as a direct or indirect result of the
threat or the commencement of any claim or proceeding against Escrow Agent or
any such officer, director, employee or agent based in whole or in part upon the
allegation of a misrepresentation or an omission of a material or significant
fact in connection with the sale or subscription of any of the Shares. Escrow
Agent shall have no responsibility for approving or accepting on behalf of the
Company any proceeds delivered to it hereunder, nor shall Escrow Agent be
responsible for authorizing issuance of the Shares or for determining the
qualification of any purchaser or the accuracy of the information contained in
the sale documents, disclosure statements, subscription agreements or any
related document.
10. GENERAL.
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(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.
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(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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
BUCKHEAD COMMUNITY BANCORP, INC. SUNTRUST BANK, ATLANTA
By:_____________________ By:_____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name:___________________________
President Title:__________________________
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