EXHIBIT 10.6
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of this 1st day of April,
1999, by and between CHEROKEE BANKING COMPANY, a Georgia corporation (the
"Company"), and THE BANKERS BANK, a bank chartered under the laws of Georgia
(the "Escrow Agent"), as escrow agent.
W I T N E S S E T H:
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WHEREAS, the Company proposes to offer for sale up to an aggregate of
1,000,000 shares of common stock of the Company at a purchase price of $10.00
per share; and
WHEREAS, the Company has agreed to deposit certain proceeds from the
offering in escrow on the terms and conditions set forth herein; and
WHEREAS, the Escrow Agent has agreed to accept copies of subscription
documents (the "Subscription Documents"), with the Company retaining the
originals of the Subscription Documents, to be executed and delivered by
subscribers for shares together with sums (the "Subscription Funds") received
from such subscribers and to hold and distribute the Subscription Documents and
Subscription Funds all in accordance with the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Escrow Agent, the parties hereto do hereby agree as follows:
1. Deposits with the Escrow Agent. The Company agrees to deposit with
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the Escrow Agent, or to cause to be deposited with the Escrow Agent, all
Subscription Documents and Subscription Funds received by it. The Company will
allow the Subscription Funds and Subscription Documents to remain in escrow with
the Escrow Agent and will not withdraw or attempt to withdraw either the
Subscription Funds or the Subscription Documents from the Escrow Agent except as
herein provided.
2. Deposit Accounts. Upon collection of each check by the Escrow Agent,
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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
securities issued or fully guaranteed by the United States government (or money
market funds consisting entirely thereof) or federal funds. The Company shall
provide the Escrow Agent with instructions from time to time concerning in which
of the specific investment instruments described above the Subscription 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. Minimum Escrow Amount. Except as otherwise provided herein, the
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Escrow Agent shall negotiate and hold all Subscription Documents and
Subscription Funds deposited with the Escrow Agent under the terms of this
Escrow Agreement until such time as the Escrow Agent shall have received a
written request from the Company and Subscription Documents executed by
investors agreeing to purchase at least 650,000 of the shares of common
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stock of the Company and cleared and collected Subscription Funds in the amount
of at least $6,500,000 with respect thereto, at which time all Subscription
Documents and all Subscription Funds held by the Escrow Agent and any interest
earned thereon shall be distributed to the Company by the Escrow Agent. At the
time of the release of the Subscription Documents and Subscription Funds to the
Company in the manner described above, except for the provisions of Section 9
hereof, this Escrow Agreement will terminate.
4. Return of Documents and Funds. In the event that the Escrow Agent (a)
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shall not have received, prior to termination of the offering, Subscription
Documents executed by subscribers agreeing to purchase at least 650,000 shares
of Company common stock and Subscription Funds in the amount of at least
$6,500,000 with respect thereto, or (b) shall have received a written notice
from the Company that it is terminating the offering and this Escrow Agreement,
then the Escrow Agent shall return all Subscription Funds then held by it under
this Escrow Agreement, with any interest accrued thereon to the respective
subscribers at the addresses indicated on the Subscription Documents, or as such
subscribers may otherwise direct, together with the corresponding executed
Subscription Documents. After the distribution of all Subscription Documents
and Subscription Funds in accordance with the terms of this Section 4, except
for the provisions of Section 9 hereof, this Escrow Agreement shall terminate.
5. Return of Subscriptions. In the event the Escrow Agent shall have
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received written notification from the Company that any subscription is being
returned by the Company to the subscriber, in whole or in part, the Escrow Agent
shall return to the subscriber at the address indicated on the subscriber's
Subscription Documents, or as such subscriber may otherwise direct, the
Subscription Documents executed by such subscriber and all or a portion of the
Subscription Funds deposited with the Escrow Agent on behalf of such subscriber.
Release of any Subscription Funds by the Escrow Agent under the circumstances
described in this Section shall be accomplished by delivery to the subscriber of
a check of the Escrow Agent in the amount of the Subscription Funds being
returned, together with any interest accrued thereon payable to the order of
such subscriber.
6. Agreement of the Escrow Agent. The Escrow Agent hereby agrees to
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receive such deposits of Subscription Documents and Subscription Funds, to hold
the same intact, to promptly negotiate all checks, money orders or other
instruments received by Subscription Funds, to keep true, complete and accurate
records of all deposits and disbursements of the Subscription Documents and
Subscription Funds, to permit withdrawal thereof only in accordance with the
terms of this Escrow Agreement, and to refund or deliver all such Subscription
Funds and Subscription Documents to the respective subscribers or the Company,
as the case may be, at the time and in the manner provided under the terms of
this Escrow Agreement.
7. Representations of Company. The Company hereby acknowledges that the
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status of the Escrow Agent with respect to the offering of the shares of stock
is that of agent only for the limited purposes herein set forth, and hereby
agrees that 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 of investment in the Company, or has approved, endorsed or passed
upon the merits of the shares of the stock or the Company.
8. Liability of the Escrow Agent. The acceptance by the Escrow Agent of
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its duties under this Agreement is subject to the following terms and
conditions, which all parties to this Agreement hereby agree shall govern and
control with respect to the rights, duties and liabilities of the Escrow
Agent:
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(a) The Escrow Agent is not a party to and is not bound by any
agreement between any one or more of the parties hereto, except this Agreement,
unless otherwise expressly stated herein.
(b) The duties of the Escrow Agent hereunder are only such as are
herein specifically provided, being purely ministerial in nature, and it shall
have no responsibility in respect of any of the cash, property or items ("Escrow
Deposit") deposited with it other than faithfully to follow the instructions
herein contained.
(c) The Escrow Agent acts hereunder as a depositary only. The Escrow
Agent is not responsible for or liable in any manner whatever for the
sufficiency, correctness, genuineness and validity of any security, document, or
other item, which is a part of the Escrow Deposit or for any claim or action by
any person, firm, corporation or trustee concerning the right or power of any
depositor to make any transfer or the validity of the transfer of any part of
the Escrow Deposit to the Escrow Agent.
(d) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, receipt or other paper or documents which the
Escrow Agent in good faith believes to be genuine.
(e) The Escrow Agent shall not be liable for any error of judgment,
or for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, or for anything which it may do or refrain from doing in
connection herewith, except its own gross negligence or willful misconduct.
(f) The Escrow Agent is authorized to hire, may consult with, and
obtain advice from legal counsel in the event any dispute, conflict or question
arises as to the construction of any of the provisions hereof or its duties
hereunder. The Escrow Agent shall be indemnified in accordance with Section 9
hereof for all reasonable costs so incurred and shall incur no liability and
shall be fully protected for acting in good faith in accordance with the written
opinion and instructions of such counsel.
(g) The Escrow Agent may, but shall not be required to, defend itself
in any legal proceedings which may be instituted against it or it may, by shall
not be required to, institute legal proceedings in respect of the Escrow
Deposit, or any part thereof. The Escrow Agent shall be indemnified and held
harmless in accordance with Section 9 hereof against the cost and expense of any
such defense or action.
(h) The Escrow Agent shall make payment to or for, or deliver
documents to, any party only if in the Escrow Agent's judgment such payment or
delivery may be made under the terms of this Agreement without its incurring any
liability. If conflicting demands not expressly provided for in this Agreement
are made or notices served upon the Escrow Agent with respect to its action or
omission under this Agreement, the parties hereto agree that the Escrow Agent
shall have the absolute right to elect to do either or both of the following:
(i) withhold and stop all future actions or omissions on its
part under this Agreement, or
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(ii) file a suit in interpleader or for instructions or for a
declaratory judgment for other relief and obtain an order from a
proper court requiring the parties to litigate in such court their
conflicting claims and demands.
In the event any such action is taken, the Escrow Agent shall be fully released
and discharged from all obligations.
9. Indemnification of the Escrow Agent. The Company hereby agrees to
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indemnify and hold harmless the Escrow Agent against any and all losses, claims,
damages, liabilities and expenses, including reasonable costs of investigation
and counsel fees and disbursements, which may be imposed upon the Escrow Agent
or incurred by the Escrow Agent hereunder, or as a result of the performance of
its duties as the Escrow Agent hereunder or involving the subject matter hereof.
10. Escrow Agent Fees. The Company shall pay fees, service charges and
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per check fees to the Escrow Agent as described on Exhibit A, which is attached
hereto and made a part hereof. All of these fees are payable upon the release
of the Subscription Funds, and the Escrow Agent is hereby authorized to deduct
such fees from the Subscription Funds prior to any release thereof pursuant to
this Agreement.
11. Instructions and Notices. All notices, requests, demands or other
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communications authorized or required to be given by any party pursuant to this
Agreement shall be in writing to all parties, and shall be deemed to have been
sufficiently given on the date delivered by hand delivery, by overnight courier
or by certified mail, return receipt requested, to the address set forth below:
(i) If to the Escrow Agent:
The Bankers Bank
0000 Xxxxx Xxxxx Xxxx
600 Paces Summit
Xxxxxxx, Xxxxxxx 00000
Attention: X. Xxxx Xxxxx
(ii) If to the Company:
Cherokee Banking Company
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
(iii) With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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Any party hereto may change its address for purposes of notice by
notice of such change given to the other parties in the manner specified herein.
12. Amendment. The parties hereto may amend, alter, modify or change any
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portion of the Escrow Agreement by written agreement of the parties hereto.
13. Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement. The signature of any party to any counterpart shall
be deemed to be a signature to, and may be appended to, any other counterpart.
14. Application of Georgia Law. This Escrow Agreement and the application
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and interpretation hereof shall be governed exclusively by the laws of the State
of Georgia.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of
the day and year first above written.
CHEROKEE BANKING COMPANY
By:_______________________________________
Xxxxxx X. Xxxxxxxx
President and
Chief Executive Officer
THE BANKERS BANK
By:_______________________________________
Signature
______________________________________
Print Name/Title
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