Exhibit 10.10
Escrow Agreement between SunTrust Bank and Chestatee Bancshares, Inc.
ESCROW AGREEMENT
This Escrow Agreement made effective September __, 2002, by and among
Chestatee Bancshares, Inc.(the "Company"), and SUNTRUST BANK, a Georgia banking
corporation authorized to execute trust powers under the laws of the United
States of America (the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, the Company intends to raise $2,500,000.00 in capital by the
sale of shares of common stock (the "Interests") at a price of $10.00 per share
(the "Offering"). The Company is offering the Interests on a "best efforts"
basis; and
WHEREAS, the Interests are being offered and sold to investors (the
"Subscribers") by the officers of the Company pursuant to an exemption from
registration under the Securities Act of 1933, as amended, and pursuant to
exemptions from registration under certain state securities laws.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Deposits / Record-Keeping.
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A. The Company shall deposit or cause to be deposited in escrow all
subscription proceeds received from Subscribers (the "Escrowed
Funds"). The Escrow Agent shall have no responsibility for
subscription proceeds until those proceeds are actually received and
clear through normal banking channels and become good funds. Checks
should read: SunTrust Bank, N.A., Escrow Agent for Chestatee
Bancshares, Inc.
B. The Company shall deliver to the Escrow Agent, in a form acceptable to
Escrow Agent, type-written evidence of names and addresses of the
Subscribers, the number of Interests subscribed for by each
Subscriber, the certified Tax ID number, the amounts received from
each Subscriber, and such information as will enable the Escrow Agent
to attribute to a particular Subscriber all subscription proceeds
received by the Escrow Agent from the Company. It is agreed that
delivery by the Company to the Escrow Agent of fully completed and
signed Subscription Agreements, along with the checks, shall satisfy
the foregoing requirement; provided, however, such shall not be the
exclusive method for satisfying the foregoing requirement.
C. Pursuant to 12 C.F.R. 330.4, the Escrow Agent shall expressly
disclose, by way of specific reference on its deposit account records,
that the deposit account in which Escrowed Funds are held, is held by
the Escrow Agent as a fiduciary. The Escrow Agent's records will
acknowledge that the Company is also acting in an agency capacity on
behalf of the Subscribers pursuant to Securities and Exchange
Commission Regulation 240.15c2-4. The Escrow Agent will take all
necessary action to comply with the FDIC's deposit insurance
regulations regarding record-keeping requirements, as they may be
amended from time to time, so as to sufficiently disclose for purposes
of those regulations that the Escrowed Funds are held by the Escrow
Agent as agent or custodian for the actual owners of the Escrowed
Funds.
2. Rejection of Subscription Agreement.
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A. The Company must notify the Escrow Agent, in writing, that a
Subscription Agreement was rejected. Any Subscription Agreement may be
rejected by the Company in whole or in part. Upon the receipt of a
notice of rejection or partial return, the Escrow Agent shall return
to the Subscriber signing the rejected Subscription Agreement the
amount tendered therewith without deduction or interest, as long as
the check has cleared and becomes good funds.
B. At any time prior to receiving notice pursuant to Paragraph 3.A. that
a subscription has been accepted, the Escrow Agent may receive notice
from the Company that a particular Subscription Agreement has been
withdrawn. Upon receipt of a notice of withdrawal of a Subscription
Agreement, the Escrow Agent shall return to the Subscriber who signed
the withdrawn Subscription Agreement, the Subscription Agreement (if
then in the Escrow Agent's possession) and the amount tendered
therewith, without deduction or interest. The Company shall have the
responsibility to return any withdrawn Subscription Agreement in its
possession.
3. Disbursement.
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A. At such time as the Escrow Agent has received written notice from the
Company that subscriptions have been received by the Company and
placed in escrow with the Escrow Agent, the Escrow Agent shall,
subject to the receipt of said money, transfer the subscription
proceeds with respect to any subscription accepted by the Company to
the account of Chestatee Bancshares, Inc. at SunTrust Bank for
appropriate distribution. As soon as practical after the receipt of
notice from the Company of termination of the Offering by the Company
(the "Termination Date"), the Escrow Agent shall disburse to the
account of Chestatee Bancshares, Inc. at SunTrust Bank, Atlanta all of
the subscription proceeds received and collected from all subscribers
and at such time this Escrow Agreement will terminate.
B. If good funds have not been deposited into escrow by October 31, 2002
(or December 31, 2002 if the Company elects to extend the offering),
then this Escrow Agreement shall terminate.
C. The Company shall make available a true copy of this Escrow Agreement
to each Subscriber.
4. Escrow Agent.
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The parties further covenant, warrant and agree that the Escrow Agent:
A. May invest all funds, to the extent permitted by law and this Escrow
Agreement, and at the written direction of the Company, in the STI
Classic U.S. Treasury Securities Money Market Fund and/or short-term
investment funds (in which the Escrow Agent customarily invests funds
on behalf of its customers generally) invested in obligations issued
or guaranteed by the United States of America;
B. Escrow Agent shall be compensated for its services in accordance with
the schedule of fees in Exhibit A attached hereto, which may be
deducted by Escrow Agent from investment earnings, if any, on the
Escrowed Funds; however, the Company shall be responsible for payment
of all agreed fees of Escrow Agent hereunder. Except for the fee, all
interest or earnings on escrow shall be paid to the Company at
termination date.
5. Indemnification and Exculpation.
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A. Escrow Agent undertakes to perform only such duties as expressly set
forth herein, and no additional duties or obligations shall be implied
hereunder. In performing its duties under this Escrow 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's 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 Escrow 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.
B. The Company warrants to and agrees with Escrow Agent that, unless
otherwise expressly set forth in this Escrow 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 Escrow 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 Escrow 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 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:
(i) 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 and Escrow Agent, has received
written instructions as to disbursement of regard thereto; or
(ii) 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 or its counsel. Upon such tender, the parties hereto
agree that Escrow Agent shall be discharged from all further duties under this
Escrow 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 parties hereto jointly and severally agree that, in the event any
controversy arises under or in connection with this Escrow Agreement
or the Escrowed Funds or Escrow Agent is made a party to or intervenes
in any litigation pertaining to this Escrow 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, including legal fees and expenses, associated with such
controversy or litigation.
E. Escrow Agent may resign at any time from its obligations under this
Escrow 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 ten (10) 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 Escrow Agreement provided however, Escrow Agent
shall be entitled to its compensation earned prior thereto. 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 Escrow Agreement or toward 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 its 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 Escrow 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
interpleader) 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 Escrow 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 this
Escrow Agreement.
In order to induce and as partial consideration for Escrow Agent's
acceptance of this Escrow Agreement, the Company acknowledges that Escrow Agent
is serving as escrow agent for the limited purposes set forth herein and
represents, covenants and warrants to Escrow Agent that no statement or
representation, whether oral or in writing, has been or will be made to any
prospective subscribers for any of the Interests to the effect that Escrow Agent
has investigated the desirability or advisability of investment in the Interests
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
the Company's Offering memorandum, other than as Escrow Agent under this Escrow
Agreement. It is further agreed that no party shall in any way use the name
"SunTrust Bank" 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 Interests in the strictest sense. Any breach or
violation of the paragraph shall be grounds for immediate termination of this
Escrow Agreement by Escrow Agent in accordance with the terms and provisions set
forth herein.
Without limitation to any release, indemnification or hold harmless
provision in favor of Escrow Agent as elsewhere provided in this Escrow
Agreement, the Company agrees to indemnify Escrow Agent and its officers,
directors, employees and agents and to hold Escrow Agent and such officers,
directors, employees and agents and to hold Escrow Agent and such officers,
directors, employees and agents harmless from and against all liability, costs,
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 same or subscription of any one or more of the
Interests. 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 Interests or for
determining the qualification of any purchaser or the accuracy of the
information contained in the Company's Offering memorandum.
6. Notices.
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Any and all notices, elections, demands, requests and responses thereto
permitted or required to be given under this Escrow Agreement shall be in
writing, signed by or on behalf of the party giving the same, and shall be
deemed to have been properly given and shall be effective upon being personally
delivered or delivered by nationally recognized courier such as Federal Express
which maintains a record of receipt and delivery, or three (3) days after being
deposited in the United States mail, postage prepaid, certified with return
receipt requested, or by facsimile, followed by said mail, to the other party at
the address of such other party set forth below or at such other address within
the continental United States as such other party may designate by notice
specifically designated as a notice of change of address and given in accordance
herewith; provided, however, that the time period in which a response to any
such notice, election, demand or request must be given shall commence on the
earlier of the date of actual or deemed receipt thereof; and provided further
that no notice of change of address shall be effective until the earlier of the
date of actual or deemed receipt thereof. Personal delivery to a party or to any
officer, agent or employee of such party at said address shall constitute
receipt. Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice have been received shall also constitute
receipt. Any such notice, election, demand, request or response shall be
addressed as follows:
If to the Company:
Chestatee Bancshares, Inc.
0000 XXX 00 X.
Xxxxxxxxxxx, Xx 00000
With a copy to:
Chestatee State Bank Attn : Xxxxxx Xxxxxx, Pres/CEO 0000 XXX
00 X.
Xxxxxxxxxxx, XX 00000
If to the Escrow Agent:
SunTrust Bank, Atlanta
Stock Transfer Department
00 Xxxxxxxx Xxxxxx
Xxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
7. Successors and Assigns.
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The rights created by this Escrow Agreement shall inure to the benefit of
and the obligations created hereby shall be binding upon the successors and
assigns of the Escrow Agent and the Company. This Escrow Agreement may not be
amended without the written consent of all parties in writing.
8. Construction.
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This Escrow Agreement shall be construed and enforced according to the laws
of the State of Georgia.
9. Term.
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A. This Escrow Agreement shall terminate and the Escrow Agent shall be
discharged of all responsibility hereunder at such time as the Escrow
Agent shall have transferred to the account of the Company (as
appropriate) all amounts deposited with it (along with interest earned
thereon) with respect tosubscriptions for shares of common stock
accepted by the Company or this Escrow Agreement is terminated earlier
pursuant to Paragraphs 3.A or 9.B of this Escrow Agreement.
B. Notwithstanding anything herein to the contrary, upon receipt of
written notice from the Company that the Offering has been terminated
with or without acceptance of subscriptions for Interests, the Escrow
Agent shall return to each Subscriber whose subscription has not been
accepted by the Company by such time, the subscription proceeds
received and collected from him hereunder, and at such time this
Escrow Agreement will terminate. Any 1099 interest earned shall be
reported to the IRS by the Escrow Agent.
C. In no event shall this Escrow Agreement be in effect for a period
beyond December 31, 2002 and, on that date, all sums shall be
transferred pursuant to Paragraph 3.B hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the day and year first above written.
"COMPANY"
Chestatee Bancshares, Inc.
By:
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Name: Xxxxxxx X. XxXxxx
Title: CFO
"ESCROW AGENT"
SUNTRUST BANK
By:
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Name:
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Title:
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Exhibit A
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Schedule of Fees
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