ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into the ____ day of ________, 2000,
by and among United Community Banks, Inc., a Georgia corporation, ("United"),
Wachovia Securities, Inc., a North Carolina corporation ("WSI") and SunTrust
Bank, a Georgia state chartered bank, as Escrow Agent ("Escrow Agent").
WHEREAS, United contemplates a public offering of a minimum of 350,000
shares (the "Minimum Purchase") up to a maximum of 450,000 shares of its common
stock, par value $1.00 per share (the "Common Stock") at a public offering price
of $38.00 per share (the "Offering"); and
WHEREAS, in connection with the Offering, United has filed a
Registration Statement on Form S-3 (File No. 333-_____) with the Securities &
Exchange Commission (the "Registration Statement"); and
WHEREAS, pursuant to a Broker Dealer Agreement dated March 31, 2000, by
and between United and WSI (the "Broker Dealer Agreement"), WSI agreed to act as
a sponsoring Dealer in connection with the sale of Common Stock to investors in
the State of North Carolina (the "NC Investors"); and
WHEREAS, under the terms of the Registration Statement, each investor
in the Offering (each an "Investor" and cumulatively the "Investors") will be
required to submit a subscription agreement for shares of Common Stock
(cumulatively, the "Subscription Agreements"), along with the aggregate purchase
price for shares of Common Stock subscribed for ("Subscription Proceeds" or
"Fund"); and
WHEREAS, the parties intend that Escrow Agent receive the Subscription
Agreements and the Subscription Proceeds from the Investors, and hold and
distribute such Subscription Agreements and Subscription Proceeds in accordance
with the terms and conditions set forth herein; and
WHEREAS, if subscriptions for the Minimum Purchase are not received and
accepted by United by the specific date described in, or that date as extended
pursuant to, the Registration Statement (the "Offering Termination Date"), all
Subscription Proceeds are to be returned to each Investor;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. Appointment of Escrow Agent. (a) United hereby appoints Escrow Agent
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for the purpose of holding the Subscription Agreements and Subscription Proceeds
in accordance with the terms and conditions contained herein. Escrow Agent
hereby accepts such appointment.
(b) Investors will be instructed to remit their Subscription Agreements
and Subscription Proceeds (in the form of check, bank draft or money order
payable to SunTrust Bank, as escrow agent for United Community Banks, Inc.)
directly to United Community Banks, Inc. and United will promptly send
Subscription Proceeds to SunTrust Bank.
2. Disposition. (a) Within one business day after receipt by United or
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WSI of any Subscription Proceeds, it will forward those proceeds to Escrow
Agent.
(b) Within one (1) business day of United's receipt of any Subscription
Agreements for any NC Investor, it will forward that Subscription Agreement to
WSI.
(c) Upon receipt of a Subscription Agreement, United shall determine
whether to accept or reject such Subscription Agreement, and shall notify Escrow
Agent and WSI (if it is a NC Investor) in writing of same. Within two (2)
business days of United's notice of rejection, United shall promptly return to
the Investor who executed the rejected Subscription Agreement such Subscription
Agreement and will direct the Escrow Agent to refund the amount tendered
therewith.
(d) Upon receipt by Escrow Agent prior to the Offering Termination Date
of Subscription Agreements and Subscription Proceeds for a Minimum Purchase
which have been accepted in writing by United, the escrow will terminate and
Escrow Agent shall (i) within two (2) business days of such receipt forward all
Subscription Proceeds then held by it to United; and (ii) after WSI or United
notifies Escrow Agent that the Minimum Purchase has been met, thereafter any
additional proceeds shall be disbursed to United upon the written direction of
United.
(e) In the event that on the Offering Termination Date, Escrow Agent is
not in receipt of Subscription Proceeds for the Minimum Purchase which have been
accepted in writing by United, Escrow Agent shall, after notification by United
or WSI in writing of same, terminate the escrow and Escrow Agent shall promptly
return all Subscription Proceeds delivered to it to each Investor and United
will supply SunTrust with Subscription Agreements containing the addresses of
the Investors.
(f) Escrow Agent shall invest any Subscription Proceeds received from
Investors in short-term obligations of the United States government,
certificates of deposit issued by SunTrust Bank or the SunTrust Bank STI Classic
Government Money Market Fund as may be directed by United in writing, until
termination of the escrow. In the absence of written directions, SunTrust will
invest the Subscription Proceeds in the SunTrust Bank STI Classic Government
Money Market Fund. United will be entitled to all interest earned on the escrow.
3. Fees. United agrees to compensate Escrow Agent in accordance with
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its schedule for fees attached hereto as Exhibit A.
4. Termination of Escrow Funds; Payment of Interest. The Escrow
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Agreement will terminate on the Offering Termination Date. United hereby agrees
to provide Escrow Agent advance confirmation of the Offering Termination Date.
Within two (2) business days of Escrow Agent's receipt of such notice, Escrow
Agent shall forward to United all interest actually earned on Subscription
Proceeds then held by Escrow Agent.
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5. Legal Action. Escrow Agent shall be under no duty to take any legal
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action in connection with this Agreement or towards its enforcement, or to
appear, prosecute or defend any action or legal proceeding that would result in
or might require it to incur any cost, expense, loss or liability, unless it
shall have been indemnified with respect thereto in accordance with Paragraph 6
of this Agreement.
6. Indemnification. (a) Escrow Agent undertakes to perform only such
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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.
(b) United warrants to and agrees with Escrow Agent that, unless
otherwise expressly set forth in this Agreement, there is no security interest
in the Fund or any part of the Fund; 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 Fund
or any part of the Fund; and the Escrow Agent shall have no responsibility at
any time to ascertain whether or not any security interest exists in the Fund or
any part of the Fund or to file any financing statement under the Uniform
Commercial Code of any jurisdiction with respect to the Fund 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 Fund or any part of such Fund. 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.
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Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Fund 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 Fund; 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 Fund 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) United agrees to pay Escrow Agent for its ordinary services
hereunder the fees determined in accordance with and payable as specified in the
Schedule of Fees set forth in Exhibit A attached hereto and made a part hereof.
In addition, United 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 10 days following receipt by
United of a written statement setting forth such expenses.
United agrees that, in the event any controversy arises under or in
connection with this Agreement or the Fund or Escrow Agent is made a party to or
intervenes in any litigation pertaining to this Agreement or the Fund, 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 expense to 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 United to indemnify Escrow Agent as provided herein, Escrow Agent is hereby
granted a security interest in and a lien upon the Fund, which security interest
and lien shall be prior to all other security interests, liens or claims against
the Fund 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 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 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 it 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.
United 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 United, (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"), United 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 United 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
United. United hereby agrees that the indemnifications and protections afforded
Escrow Agent in this section shall survive the termination of the Agreement.
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In order to induce and as partial consideration for Escrow Agent's
acceptance of this Agreement, United or WSI acknowledge 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
prospective subscribers for any of the Common Stock to the effect that Escrow
Agent has investigated the desirability or advisability of investment in the
Common Stock 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 Parties' disclosure statements or subscription agreements,
other than as Escrow Agent under this 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 Common Stock 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.
Without limitation to any release, indemnification or hold harmless
provision in favor of Escrow Agent as elsewhere provided in this Agreement,
United 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 one or more of the
Common Stock. Escrow Agent shall have no responsibility for approving or
accepting on behalf of United any proceeds delivered to it hereunder, nor shall
Escrow Agent be responsible for authorizing issuance of the Common Stock or for
determining the qualification of any purchaser or the accuracy of the
information contained in the Parties' disclosure statements or subscription
agreements.
7. Interpleader. If the parties at any time are in disagreement about
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the interpretation of this Agreement, or the rights and obligations hereunder,
or the propriety of any action contemplated by the Escrow Agent hereunder, the
Escrow Agent may, at its sole discretion, file an action in interpleader to
resolve said disagreement. The Escrow Agent shall be indemnified by United for
all costs, including reasonable attorney's fees, in connection with the
aforesaid interpleader action, and shall be fully protected by United in
suspending all or a part of its activities under this Agreement until a final
judgment in the interpleader action is received.
8. Notices. All notices and other communications shall be in writing
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and shall be deemed to have been given immediately if delivered personally, on
receipt of facsimile transmission with original mailed via First Class Mail
(provided such receipt is confirmed by the recipient), or five days after
mailing by registered or certified mail (return receipt requested), postage
prepaid to the parties to this Agreement at the following addresses or at such
other address for a party as shall be specified by like notice:
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(a) To United:
United Community Banks, Inc.
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxxxxxxx Xxxxxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
EIN: 00-0000000
(b) To WSI:
Wachovia Securities, Inc.
IJL Financial Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxx, Jr.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) To Escrow Agent:
SunTrust Bank
Corporate Trust Department
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
9. Execution and Counterparts. This Agreement may be executed in any
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number of counterparts, each of which shall be deemed an original, and all of
which shall constitute a single instrument.
10. Entire Agreement. This Agreement supersedes all prior discussions
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and agreements between the parties with respect to the subject matter hereof,
and this Agreement contains the sole and entire agreement between the parties
with respect to the matters covered hereby and thereby. This Agreement shall not
be altered or amended, except by an instrument in writing, signed by or on
behalf of the parties hereto.
11. Governing Law. The validity and effect of this Agreement shall be
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governed by and construed and enforced in accordance with the laws of the State
of Tennessee.
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12. Successors and Assigns. Except for resignations permitted under the
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terms hereof, this Agreement may not be assigned to any party hereto without the
prior written consent of the other parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, legal representatives, successors and permitted assigns.
13. Partial Invalidity and Severability. All rights and restrictions
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contained herein may be exercised and may be applicable and binding only to the
extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any terms of this Agreement shall be held to be illegal, invalid
or unenforceable by a court of competent jurisdiction or by a duly constituted
arbitral tribunal, it is the intent of the parties that the remaining terms
hereof shall constitute their Agreement with respect to the subject matter
hereof and all such remaining terms shall remain in full force and effect.
14. Headings. The headings as to contents of particular paragraphs in
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this Agreement are inserted only for convenience and shall not be construed as a
part of this Agreement or as a limitation on the scope of any terms or
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
and caused this Agreement to be executed under seal by their duly authorized
officers as of the day and year first above written.
(CORPORATE SEAL) UNITED COMMUNITY BANKS, INC.
Attest:/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxx
Secretary Xxxxxxxxxxx X. Xxxxxxx
Chief Financial Officer
(CORPORATE SEAL) WACHOVIA SECURITIES, INC.
Attest:______________________ By: /s/ Xxx X. Xxxx, Jr.
Secretary
(Signatures continued on following page)
(Signatures continued from previous page)
ESCROW AGENT:
SUNTRUST BANK
(BANK SEAL) By:_____________________________
Name:_______________________
Title:______________________
EXHIBIT A
FEES
