ESCROW AGREEMENT
THIS
ESCROW AGREEMENT
(this
“Agreement”) is entered into and effective as of the
day of
______________, 2008, by and between T Bancshares, Inc., a Texas corporation
(the “Company”), and T Bank, N.A., a Texas banking association (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 1,069,052 shares of
Common Stock, $0.01 par value per share (the “Shares”), to investors at $7.50
per Share pursuant to a limited public offering of Shares that are not
subscribed for pursuant to the exercise of subscription rights offered in a
certain rights offering; and
WHEREAS,
the
Company desires to establish an escrow for funds forwarded by subscribers for
Shares in the limited public offering, 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 are hereby acknowledged, the parties hereto
agree as follows:
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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”) in the
form of checks received by the Company 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.
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 the extent permitted by applicable
law.
(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: (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 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, money-market funds or money-market mutual
funds, or such other investments as the Escrow 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 money-market funds or any money market mutual funds made
available by the Escrow Agent. Further, the parties acknowledge that the Escrow
Agent shall be entitled to distribution plan payments, shareholder services
fees, administrative services fees, “12b-1” fees or similar fees paid by such
money market mutual fund companies, distributors or agents. 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.
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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 Closing Date (as defined below), the Escrow Agent has
received a certificate from the President or the Chairman of the Board of the
Company that all conditions to the release of funds as described in the
Company’s Registration Statement filed with the Securities and Exchange
Commission pertaining to the limited 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 is
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, the “Closing Date” shall mean
____________, 2008, or, upon written notice to the Escrow Agent, such later
date
as determined by the Company. For purposes of this Agreement, “collected funds”
shall mean all funds received by the Escrow Agent, which have cleared normal
banking channels.
(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 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.
To the
extent permitted by applicable law, any interest earned on the Escrowed Funds
shall be distributed to the Company at the time of the distribution of escrowed
funds in accordance with Paragraph 3.
5. Fee
of Escrow Agent.
(a)
The
Company agrees to pay the Escrow Agent a fee of $3,000 pursuant to this
Agreement. In addition, a $10.00 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) The
Escrow Agent acts hereunder as a depository only, and is not responsible or
liable in any manner whatever for the sufficiency, correctness, genuineness
or
validity of the subject matter of the escrow, or any part thereof. The sole
duty
of the Escrow Agent shall be to receive subscription funds and hold them subject
to release, in accordance herewith, and the Escrow Agent shall be under no
duty
to determine whether the Company is complying with requirements of this Escrow
Agreement, the limited public offering or applicable law in tendering the
subscription funds to the Escrow Agent. Further, the Escrow Agent shall not
be
responsible for determining (i) the accuracy of any notices or instructions
delivered hereunder, or the form of execution thereof, or (ii) the identity
or
authority of any person executing or delivering this Agreement, any property
delivered hereunder, or any instructions delivered in connection
herewith.
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(b) 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 agrees 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 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. Payment of such losses,
damages, and costs including attorneys’ fees shall be paid the Company within a
reasonable period of time not to exceed thirty (30) days after billing. In
the
event that payment is not received by Escrow Agent within thirty (30) days
after
billing, Escrow Agent’s liabilities, damages, expenses and costs including
attorneys’ fees may be deducted from the escrow funds.
(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 shall indemnify the Escrow Agent against its court costs and reasonable
attorney’s fees incurred.
(d) The
Escrow Agent may at any time resign hereunder by giving notice of its
resignation to the other parties hereto, at their respective addresses set
forth
in this Agreement, at least ten (10) days prior to the date specified for such
resignation to take effect, and upon the effective date of such resignation,
the
property or funds held by the Escrow Agent shall be tendered to a successor
escrow agent designated by the other parties to this Agreement, whereupon the
Escrow Agent’s obligations hereunder shall cease and terminate, and parties
shall execute the receipt attached hereto. If no such person shall have been
designated by such date, all obligations of the Escrow Agent hereunder shall,
nevertheless, cease and terminate. The Escrow Agent's sole responsibility
thereafter shall be to keep safely the funds or property then held by it and
to
deliver the same to a person designated by all other parties executing this
agreement or in accordance with a final order or judgment of a court of
competent jurisdiction.
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7. 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 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:
| If to the subscribers for Shares: |
To
their respective addresses as specified in their Subscription
Agreements.
|
| The Company: |
T Bancshares, Inc
00000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attn:
Xxxxxxx Xxxxx
|
.
| TheEscrow Agent: |
T
Bank, N.A.
00000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention:
Xxxxxxx Xxxxxx
|
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.
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 Texas. The parties agree that Escrow Agent may seek
adjudication of any adverse claim or demands in either the District Court of
Dallas County, Texas, or the United States Federal District Court for the
Northern District of Texas, Dallas Division.
(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)
The
Escrow Agent is not a party to, and is not bound by, or charged with notice
of,
any agreement out of which this escrow may arise. The Escrow Agent shall not
be
bound by any modification, amendment or revision of this Agreement unless the
same shall be in writing and signed by all of the parties hereto.
(e)
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.
(f)
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.
(g)
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.
(h)
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:
By:
___________________________________________
Name:
Xxxxxxx X. Xxxxx
Title:
Chief Executive Officer
ESCROW
AGENT:
T
BANK,
N.A.
By:
___________________________________________
Name:
Xxxxxxx X. Xxxxxx
Title:
Executive Vice President
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