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EXHIBIT 10.3
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into as of the ___
day of ___________, 1988, by and among Unity Holdings, Inc., a Georgia
corporation (the "Company"), Xxxxxxxxx, Xxxxxx & Xxxxx (the "Sales Agent"), and
First Tennessee Bank, N.A., a national 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
1,000,000 shares of Common Stock, par value 4.01 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 740,000 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 held 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 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.
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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, in accordance with SEC Rule 15(c)2-4.
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. 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 $7,400,000 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 $7,400,000 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 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 deliver 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.
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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. This fee is payable upon the release of
the Escrowed Funds, and the Escrow Agent is hereby authorized to deduct such fee
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 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
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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
requests, 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: Unity Holdings, Inc.
X.X. Xxx 000000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. XxXxxxxxx
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: First Tennessee Bank, N.A. Trust
Department
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxx
The Sales Agent: Xxxxxxxxx, Xxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxx
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:
UNITY HOLDINGS, INC. FIRST TENNESSEE BANK, N.A.
By: By:
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Name: Xxxxxxx X. XxXxxxxxx Name:
Title: President and Chief Executive Officer Title:
SALES AGENT:
Xxxxxxxxx, Xxxxxx & Xxxxx
By:
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Name:
Title:
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