EXHIBIT 1.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of ________________, 2000 ("Escrow
Agreement"), is by and between Wachovia Securities, Inc., a North Carolina
corporation ("Sales Agent"); weststar financial services corporation, a North
Carolina corporation ("Issuer"); and FIRST CITIZENS BANK, as Escrow Agent
hereunder ("Escrow Agent").
BACKGROUND
A. Issuer has engaged Sales Agent as its agent to assist in the placement
of some of its shares of its $1.00 par value Common Stock at $____ per share
(the "Shares") on a "best efforts" basis, pursuant to the prospectus included as
part of Registration Statement No. 333-45014 filed with the Securities and
Exchange Commission (the "SEC") and attached hereto as Exhibit A (the "Offering
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Document").
B. In accordance with the Offering Document, subscribers to the Shares (the
"Subscribers" and individually, a "Subscriber") will be required to submit full
payment for their respective investments at the time they enter into
subscription agreements.
C. In accordance with the Offering Document, all payments received by Sales
Agent or Issuer in connection with subscriptions for Shares shall be promptly
forwarded to Escrow Agent, and Escrow Agent has agreed to accept, hold, and
disburse such funds deposited with it and the earnings thereon in accordance
with the terms of this Escrow Agreement.
D. In order to establish the escrow of funds and to effect the provisions
of the Offering Document, the parties hereto have entered into this Escrow
Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Definitions. The following terms shall have the following meanings when
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used herein:
"Cash Investment" shall mean the number of Shares to be purchased by any
Subscriber multiplied by the offering price per Share of $______ as set forth in
the Offering Document.
"Cash Investment Instrument" shall mean a check, money order or similar
instrument, made payable to the "First Citizens Bank/Weststar Financial Services
Corporation- Escrow Account," in full payment for the Shares to be purchased by
any Subscriber.
"Escrow Funds" shall mean the funds deposited with the Escrow Agent
pursuant to this Agreement, together with any interest and other income thereon.
"Issuer Representative" shall mean G. Xxxxxx Xxxxxxxxx, President and CEO
of Issuer.
"Minimum Offering" shall mean 117,600 Shares.
"Minimum Offering Notice" shall mean a written notification, signed by
Issuer, which shall specify that subscriptions for the Minimum Offering have
been received; that, to the best of Issuer's knowledge after due inquiry and
review of its records, Cash Investment Instruments in full payment for that
number of Shares equal to or greater than the Minimum Offering have been
received, deposited with and collected by Escrow Agent; and that such
subscriptions have not been withdrawn, rejected or otherwise terminated.
"Pro Rata Basis," with respect to the allocation among Subscribers of
interest and other earnings held in the Escrow Funds, shall mean, for each
Subscriber, the Subscriber's Cash Investment multiplied by the number of days
the Cash Investment of such Subscriber was held in interest-bearing investments
pursuant to Section 6 hereof, multiplied by the average yield earned on the
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Escrow Funds during such period of days.
"Shares" shall have the meaning set forth in the section of this Escrow
Agreement titled "Background".
"Subscriber" or "Subscribers" shall have the meaning set forth in the
section of this Escrow Agreement titled "Background".
"Subscription Accounting" shall mean an accounting of all subscriptions for
Shares received and accepted by Sales Agent or Issuer as of the date of such
accounting, indicating for each subscription the Subscriber's name, social
security number and address, the number and total purchase price of subscribed
Shares, the date of receipt by Sales Agent or Issuer of the Cash Investment
Instrument, and notations of any nonpayment of the Cash Investment Instrument
submitted with such subscription, any withdrawal of such subscription by the
Subscriber, any rejection of such subscription by Sales Agent or Issuer, or
other termination, for whatever reason, of such subscription. For the purposes
hereof, a properly completed Subscription Offer form as set forth in the
Offering Document should satisfy the requirements of a Subscription Accounting.
2. Appointment of and Acceptance by Escrow Agent. Issuer hereby appoints
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Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby accepts
such appointment in accordance with the terms of this Escrow Agreement.
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3. Deposits into Escrow. a. Upon receipt by Sales Agent or Issuer of any
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Cash Investment Instrument for the purchase of Shares, Sales Agent or Issuer
shall forward to Escrow Agent, by 12:00 noon of the next business day, the Cash
Investment Instrument for deposit into the following escrow account:
First Citizens Bank
Raleigh, North Carolina
ABA # ___________
FFC: _____________
ATTN: _____________
for Weststar Financial Services Corporation Escrow Account
Notify (919) ________
Each such deposit shall be accompanied by the following documents:
(1) a report containing such Subscriber's name, social security number or
taxpayer identification number, address and other information required
for withholding purposes; and
(2) a Subscription Accounting.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS
ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR
CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST ISSUER UNTIL
RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a) HEREOF.
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b. Sales Agent and Issuer understand and agree that all checks and similar
instruments received by Escrow Agent hereunder are subject to collection
requirements of presentment and final payment, and that the funds represented
thereby cannot be drawn upon or disbursed until such time as final payment has
been made and is no longer subject to dishonor. Upon receipt, Escrow Agent shall
process each Cash Investment Instrument for collection, and the proceeds thereof
shall be held as part of the Escrow Funds until disbursed in accordance with
Section 4 hereof. If, upon presentment for payment, any Cash Investment
Instrument is dishonored, Escrow Agent's sole obligation shall be to notify
Sales Agent or Issuer, as applicable, of such dishonor and to return such Cash
Investment Instrument to Sales Agent or Issuer, as applicable, to take whatever
action it deems necessary. Notwithstanding the foregoing, if for any reason any
Cash Investment Instrument is uncollectible after payment of the funds
represented thereby has been made by Escrow Agent, Issuer shall immediately
reimburse Escrow Agent upon receipt from Escrow Agent of written notice thereof.
Upon receipt of any Cash Investment Instrument that represents payment less
than or greater than the Cash Investment, Escrow Agent's sole obligation shall
be to notify Issuer or Sales Agent of such fact and to return such Cash
Investment Instrument to Sales Agent or Issuer.
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c. All Cash Investment Instruments shall be made payable to the order of,
or endorsed to the order of, "First Citizens Bank/Weststar Financial Services
Corporation - Escrow Account," and Escrow Agent shall not be obligated to
accept, or present for payment, any Cash Investment Instrument that is not
payable or endorsed in that manner.
4. Disbursements of Escrow Funds.
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a. Completion of Minimum Offering. Subject to the provisions of Section 10
hereof, Escrow Agent shall pay to Issuer the liquidated value of the Escrow
Funds, by certified or bank check or by wire transfer, no later than fifteen
(15) business days following receipt of the following documents:
(1) A Minimum Offering Notice;
(2) Subscription Accounting, substantiating the sale of the Minimum
Offering;
(3) The documents described on Exhibit B attached hereto and incorporated
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herein by reference; and
(4) Such other certificates, notices or other documents as Escrow Agent
shall reasonably require.
Notwithstanding the foregoing, Escrow Agent shall not be obligated to
disburse the Escrow Funds to Issuer if Escrow Agent has grounds to believe that
(a) Cash Investment Instruments in full payment for that number of Shares equal
to or greater than the Minimum Offering have not been received, deposited with
and collected by the Escrow Agent, or (b) any of the certifications and opinions
set forth in the documents described in Exhibit B attached hereto are incorrect
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or incomplete.
After the initial disbursement of Escrow Funds to Issuer pursuant to this
Section 4(a), Escrow Agent shall pay to Issuer any additional funds received
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with respect to the Shares, by certified or bank check or wire transfer, no
later than fifteen (15) business days after receipt.
b. Rejection of Any Subscription or Termination of the Offering. No later
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than fifteen (15) business days after receipt by Escrow Agent of written notice
(i) from Issuer that it intends to reject a Subscriber's subscription, (ii) from
Issuer that there will be no closing of the sale of Shares to Subscribers, or
(iii) from the SEC or any other federal or state regulatory authority that a
stop order has been issued with respect to the Offering Document and has
remained in effect for at least twenty (20) days, Escrow Agent shall pay to the
applicable Subscriber(s), by certified or bank check and by first class mail,
the amount of the Cash Investment paid by each Subscriber, and shall pay as soon
as practicable to the applicable Subscriber(s), by certified or bank check and
by first class mail, each Subscriber's share of income earned on the Escrow
Funds, each share to be calculated on a Pro Rata Basis.
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c. Expiration of Offering Period. Notwithstanding anything to the contrary
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contained herein, if Escrow Agent shall not have received a Minimum Offering
Notice on or before December 31, 2000 unless extended until February 28, 2001,
Escrow Agent shall, within fifteen (15) business days after such date and
without any further instruction or direction from Issuer, return to each
Subscriber, by certified or bank check and by first class mail, the Cash
Investment made by such Subscriber, and shall pay as soon as practicable to the
applicable Subscriber(s), by certified or bank check and by first class mail,
each Subscriber's share of income earned on the Escrow Funds, each share to be
calculated on a Pro Rata Basis.
5. Suspension of Performance; Disbursement Into Court. If, at any time,
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there shall exist any dispute between Sales Agent, Issuer, Escrow Agent, any
Subscriber or any other person with respect to the holding or disposition of any
portion of the Escrow Funds or any other obligations of Escrow Agent hereunder,
or if at any time Escrow Agent is unable to determine, to Escrow Agent's sole
satisfaction, the proper disposition of any portion of the Escrow Funds or
Escrow Agent's proper actions with respect to its obligations hereunder, or if
Issuer has not within 30 days of the furnishing by Escrow Agent of a notice of
resignation pursuant to Section 7 hereof appointed a successor Escrow Agent to
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act hereunder, then Escrow Agent may, in its sole discretion, take either or
both of the following actions:
a. suspend the performance of any of its obligations (including without
limitation any disbursement obligations) under this Escrow Agreement until such
dispute or uncertainty shall be resolved to the sole satisfaction of Escrow
Agent or until a successor Escrow Agent shall have been appointed (as the case
may be); provided however, that Escrow Agent shall continue to invest the Escrow
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Funds in accordance with Section 6 hereof; and/or
b. petition (by means of an interpleader action or any other appropriate
method) any court of competent jurisdiction any venue convenient to Escrow
Agent, for instructions with respect to such dispute or uncertainty, and to the
extent required by law, pay into such court, for holding and disposition in
accordance with the instructions of such court, all funds held by it in the
Escrow Funds, after deduction and payment to Escrow Agent of all fees and
expenses (including court costs and attorneys' fees) payable to, incurred by, or
expected to be incurred by Escrow Agent in connection with the performance of
its duties and the exercise of its rights hereunder.
Escrow Agent shall have no liability to Sales Agent, Issuer, any Subscriber or
any other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the disbursement of funds held in the Escrow Funds or any delay in
or with respect to any other action required or requested of Escrow Agent.
6. Investment of Funds. Escrow Agent shall invest and reinvest the Escrow
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Funds as Issuer's Representative shall direct (subject to applicable minimum
investment requirements) in writing; provided, however, that no investment or
reinvestment may be made except in the following:
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a. direct obligations of the United States of America or obligations the
principal of and the interest on which are unconditionally guaranteed by the
United States of America; or
b. certificates of deposit issued by a bank, bank and trust company, or
national banking association (including the Escrow Agent and its affiliates),
which certificates of deposit are insured by the Federal Deposit Insurance
Corporation or similar government agency; or
c. any money market fund substantially all of which is invested in the
foregoing investment categories, including any money market fund managed by
Escrow Agent and any of its affiliates.
If Escrow Agent has not received written instructions from Issuer's
Representative at any time that an investment decision must be made, Escrow
Agent shall invest the Escrow Funds, or such portion thereof as to which no
written instructions have been received, in investments described in clause (c)
above.
Each of the foregoing investments shall be made in the name of Escrow Agent
in its stated capacity as escrow agent. No investment shall be made in any
instrument or security that has a maturity of greater than thirty (30) days.
Notwithstanding anything to the contrary contained herein, Escrow Agent may,
without notice to Issuer, sell or liquidate any of the foregoing investments at
any time if the proceeds thereof are required for any release of funds permitted
or required hereunder, and Escrow Agent shall not be liable or responsible for
any loss, cost or penalty resulting from any such sale or liquidation. With
respect to any funds received by Escrow Agent for deposit into the Escrow Funds
or any written investment instruction of Issuer's Representative received by
Escrow Agent after ten o'clock, a.m., Eastern Standard time, Escrow Agent shall
not be required to invest such funds or to effect such investment instruction
until the next day upon which banks in Raleigh, North Carolina, are open for
business.
7. Resignation and Removal of Escrow Agent. Escrow Agent may resign from
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the performance of its duties hereunder at any time by giving thirty (30) days'
prior written notice to Sales Agent and Issuer or may be removed, with or
without cause, by Issuer, acting in writing, at any time by the giving of thirty
(30) days' prior written notice to Escrow Agent. Such resignation or removal
shall take effect upon the appointment of a successor Escrow Agent as provided
hereinbelow. Upon any such notice of resignation or removal, Issuer shall
appoint a successor Escrow Agent hereunder, which shall be a commercial bank,
trust company or other financial institution with a combined capital and surplus
in excess of $10,000,000. Upon the acceptance in writing of any appointment as
Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Escrow Agent, and the retiring Escrow
Agent shall be discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for actions taken as
Escrow Agent hereunder prior to such succession. After any retiring Escrow
Agent's resignation or removal, the provisions of this Escrow Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent, after making
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copies of such records as the retiring Escrow Agent deems advisable and after
deduction and payment to the retiring Escrow Agent of all fees and expenses
(including court costs and attorneys' fees) payable to, incurred by or expected
to be incurred by the retiring Escrow Agent in connection with the performance
of its duties and the exercise of its rights hereunder.
8. Liability of Escrow Agent.
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a. Escrow Agent shall have no liability or obligation for damages, loss or
expenses with respect to the Escrow Funds except for damages, loss or expenses
resulting from Escrow Agent's willful misconduct or gross negligence. Escrow
Agent's sole responsibility shall be for the safekeeping, investment, and
disbursement of the Escrow Funds in accordance with the terms of this Escrow
Agreement. Escrow Agent shall have no implied duties or obligations and shall
not be charged with knowledge or notice of any fact or circumstance not
specifically set forth herein. Escrow Agent may rely upon any instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein which Escrow Agent shall
in good faith believe to be genuine, to have been signed or presented by the
person or parties purporting to sign the same and to conform to the provisions
of this Escrow Agreement. In no event shall Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages. Escrow Agent
shall not be obligated to take any legal action or commence any proceeding in
connection with the Escrow Funds or any account in which Escrow Funds are
deposited or this Escrow Agreement, or to appear in, prosecute or defend any
such legal action or proceeding. Without limiting the generality of the
foregoing, Escrow Agent shall not be responsible for or required to enforce any
of the terms or conditions of any subscription agreement with any Subscriber or
any other agreement between Issuer, Sales Agent and/or any Subscriber. Escrow
Agent shall not be responsible or liable in any manner for the performance by
Issuer or any Subscriber of their respective obligations under any subscription
agreement nor shall Escrow Agent be responsible or liable in any manner for the
failure of Issuer, Sales Agent or any third party (including any Subscriber) to
honor any of the provisions of this Escrow Agreement. Escrow Agent may consult
legal counsel selected by it in the event of any dispute or question as to the
construction of any of the provisions hereof or of any other agreement or of its
duties hereunder, or relating to any dispute involving any party hereto, and
shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instruction of such
counsel. Issuer shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel.
b. The Escrow Agent is authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Escrow Funds,
without determination by the Escrow Agent of such court's jurisdiction in the
matter. If any portion of the Escrow Funds is at any time attached, garnished or
levied upon under any court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such property shall be stayed or enjoined by any
court order, or in case any order, judgment or decree shall be made or entered
by any court affecting such property or any part thereof, then and in any such
event, the Escrow Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree which it is advised by
legal counsel selected by it is binding upon it without the need for appeal or
other action; and if the Escrow Agent complies with any such order, writ,
judgment or decree, it shall not be liable to any of the parties hereto or to
any other person or entity by reason of such compliance even though
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such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
9. Indemnification of Escrow Agent. From and at all times after the date of
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this Escrow Agreement, Issuer shall, to the fullest extent permitted by law,
indemnify and hold harmless the Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the
"Indemnified Parties") against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever (including without limitation reasonable attorneys' fees, costs and
expenses) incurred by or asserted against any of the Indemnified Parties from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim, demand, suit,
action or proceeding (including any inquiry or investigation) by any person,
including without limitation Issuer or Sales Agent, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this Escrow Agreement or any
transactions contemplated herein, whether or not any such Indemnified Party is a
party to any such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for any liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted solely
from the gross negligence or willful misconduct of such Indemnified Party. If
any such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify Issuer in writing, and
Issuer shall assume the defense thereof, including the employment of counsel and
the payment of all expenses. Such Indemnified Party shall, in its sole
discretion, have the right to employ separate counsel (who may be selected by
such Indemnified Party in its sole discretion) in any such action and to
participate in the defense thereof, and the fees and expenses of such counsel
shall be paid by such Indemnified Party, except that Issuer shall be required to
pay such fees and expenses (a) Issuer agrees to pay such fees and expenses, or
(b) Issuer shall fail to assume the defense of such action or proceeding or
shall fail, in the sole discretion of such Indemnified Party, to employ counsel
satisfactory to the Indemnified Party in any such action or proceeding, (c)
Issuer is the plaintiff in any such action or proceeding or (d) the named or
potential parties to any such action or proceeding (including any potentially
impleaded parties) include both Indemnified Party and Issuer, and Indemnified
Party shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to Issuer. Issuer shall be liable to pay fees and expenses of counsel
pursuant to the preceding sentence. All such fees and expenses payable by Issuer
pursuant to the foregoing sentence shall be paid from time to time as incurred,
both in advance of and after the final disposition of such action or claim. The
obligations of Issuer under this Section 9 shall survive any termination of this
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Escrow Agreement and the resignation or removal of Escrow Agent shall be
independent of any obligation of the Escrow Agent.
10. Fees and Expenses of Escrow Agent. Issuer shall compensate Escrow Agent
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for its services hereunder in accordance with Exhibit C attached hereto and, in
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addition, shall reimburse Escrow Agent for all of its reasonable out-of-pocket
expenses, including attorneys' fees, travel expenses, telephone and facsimile
transmission costs, postage (including express mail and
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overnight delivery charges), copying charges and the like. All of the foregoing
compensation and reimbursement obligations shall be payable by Issuer upon
demand by Escrow Agent. The obligations of Issuer under this Section 10 shall
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survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent. The Escrow Agent is authorized to and may disburse from time to
time, to itself or to any Indemnified Party from the Escrow Funds (to the extent
of Issuer's rights thereto), the amount of any compensation and reimbursement of
out-of-pocket expenses due and payable hereunder (including any amount to which
Escrow Agent or any Indemnified Party is entitled to seek indemnification
pursuant to Section 9 hereof). Escrow Agent shall notify Issuer of any
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disbursement from the Escrow Funds to itself or to any Indemnified Party in
respect of any compensation or reimbursement hereunder and shall furnish to
Issuer copies of all related invoices and other statements. Issuer hereby grants
to Escrow Agent and the Indemnified Parties a security interest in and lien upon
the Escrow Funds (to the extent of Issuer's rights thereto) to secure all
obligations hereunder, and Escrow Agent and the Indemnified Parties shall have
the right to offset the amount of any compensation or reimbursement due any of
them hereunder (including any claim for indemnification pursuant to Section 9
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hereof) against the Escrow Funds (to the extent of Issuer's rights thereto.) If
for any reason the Escrow Funds available to Escrow Agent and the Indemnified
Parties pursuant to such security interest or right of offset are insufficient
to cover such compensation and reimbursement, Issuer shall promptly pay such
amounts to Escrow Agent and the Indemnified Parties upon receipt of an itemized
invoice.
11. Representations and Warranties; Legal Opinions. a. Issuer makes the
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following representations and warranties to Escrow Agent:
(1) Issuer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of North Carolina, and has full power and
authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder;
(2) This Escrow Agreement has been duly approved by all necessary corporate
action of Issuer, including any necessary shareholder approval, has been
executed by duly authorized officers of Issuer, and constitutes a valid and
binding agreement of Issuer, enforceable in accordance with its terms.
(3) The execution, delivery, and performance by Issuer of this Escrow
Agreement will not violate, conflict with, or cause a default under the articles
of incorporation or bylaws of Issuer, any applicable law or regulation, any
court order or administrative ruling or decree to which Issuer is a party or any
of its property is subject, or any agreement, contract, indenture, or other
binding arrangement to which Issuer is a party or any of its property is
subject. The execution, delivery and performance of this Agreement is consistent
with and accurately described in the Offering Document, and the allocation of
interest and other earnings to Subscribers, as set forth in Sections 4(b) and
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4(c) hereof, has been properly described therein.
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(4) No party other than the parties hereto and the prospective Subscribers
have, or shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.
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(5) Issuer hereby acknowledges that the status of Escrow Agent is that of
agent only for the limited purposes set forth herein, and hereby represents and
covenants that no representation or implication shall be made that the Escrow
Agent has investigated the desirability or advisability of investment in the
Shares or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Shares other than to
state that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(6) All of the representations and warranties of Issuer contained herein
are true and complete as of the date hereof and will be true and complete at the
time of any deposit to or disbursement from the Escrow Funds.
b. Sales Agent makes the following representations and warranties to Escrow
Agent:
(1) This Escrow Agreement has been duly approved by all necessary corporate
action of Sales Agent, has been executed by duly authorized officers of Sales
Agent, and constitutes a valid and binding agreement of Sales Agent, enforceable
in accordance with its terms.
(2) Sales Agent hereby acknowledges that the status of Escrow Agent is that
of agent only for the limited purposes set forth herein, and hereby represents
and covenants that no representation or implication shall be made that the
Escrow Agent has investigated the desirability or advisability of investment in
the Shares or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Shares other than to
state that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(3) All of the representations and warranties of Sales Agent contained
herein are true and complete as of the date hereof and will be true and complete
at the time of any deposit to or disbursement from the Escrow Funds.
12. Consent to Jurisdiction and Venue. In the event that any party hereto
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commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the Western District of North Carolina shall have the sole and exclusive
jurisdiction over any such proceeding. If all such courts lack federal subject
matter jurisdiction, the parties agree that the Superior Court Division of the
General Court of Justice of Mecklenburg County, North Carolina shall have sole
and exclusive jurisdiction. Any of these courts shall be proper venue for any
such lawsuit or judicial proceeding and the parties hereto waive any objection
to such venue. The parties hereto consent to and agree to submit to the
jurisdiction of any of the courts specified herein and agree to accept service
of process to vest personal jurisdiction over them in any of these courts.
13. Notice. All notices and other communications hereunder shall be in
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writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid,
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when delivered personally, one (1) day after delivery to any overnight courier,
or when transmitted by facsimile transmission facilities, and addressed to the
party to be notified as follows:
If to Issuer at: Weststar Financial Services Corporation
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
ATTENTION: G. Xxxxxx Xxxxxxxxx
Facsimile Number: (000) 000-0000
If to Sales Agent at: Wachovia Securities, Inc.
IJL Financial Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
ATTENTION: Xxxxx X. Xxxx, Jr.
Facsimile Number: (000) 000-0000
If to the Escrow
Agent at: First Citizens Bank, as Escrow Agent
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Raleigh, North Carolina
ATTENTION:
Facsimile Number: (919)
or to such other address as each party may designate for itself by like notice.
14. Amendment or Waiver. This Escrow Agreement may be changed, waived,
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discharged or terminated only by a writing signed by Sales Agent, Issuer and
Escrow Agent. No delay or omission by any party in exercising any right with
respect hereto shall operate as a waiver. A waiver on any one occasion shall not
be construed as a bar to, or waiver of, any right or remedy on any future
occasion.
15. Severability. To the extent any provision of this Escrow Agreement is
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prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
16. Governing Law. This Escrow Agreement shall be construed and interpreted
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in accordance with the internal laws of the State of North Carolina without
giving effect to the conflict of laws principles thereof.
17. Entire Agreement. This Escrow Agreement constitutes the entire
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agreement between the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in their entirety
the obligations and duties of the Escrow Agent with respect to the Escrow Funds.
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18. Binding Effect. All of the terms of this Escrow Agreement, as amended
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from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of Sales Agent, Issuer and
Escrow Agent.
19. Execution in Counterparts. This Escrow Agreement may be executed in two
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or more counterparts, which when so executed shall constitute one and the same
agreement.
20. Termination. Upon the first to occur of the disbursement of all amounts
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in the Escrow Funds or deposit of all amounts in the Escrow Funds into court
pursuant to Section 5 hereof, this Escrow Agreement shall terminate and Escrow
Agent shall have no further obligation or liability whatsoever with respect to
this Escrow Agreement or the Escrow Funds.
21. Dealings. The Escrow Agent and any stockholder, director, officer or
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employee of the Escrow Agent may buy, sell, and deal in any of the securities of
the Issuer and become pecuniarily interested in any transaction in which the
Issuer may be interested, and contract and lend money to the Issuer and
otherwise act as fully and freely as though it were not Escrow Agent under this
Agreement. Nothing herein shall preclude the Escrow Agent from acting in any
other capacity for the Issuer or any other entity.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed under seal as of the date first above written.
WESTSTAR FINANCIAL SERVICES CORPORATION,
as Issuer
[CORPORATE SEAL] By: _____________________________________
G. Xxxxxx Xxxxxxxxx, President and CEO
ATTEST:
______________________
Secretary
Wachovia Securities, Inc., as Sales Agent
By: ____________________________________
Xxxxx X. Xxxx, Jr., Senior Vice President
FIRST CITIZENS BANK, as Escrow Agent
By: _______________________________
Title: _______________________________
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Exhibit A
Offering Document
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Exhibit B
Additional Documents Required
for Release of Escrow Funds
Pursuant to Section 4(a)
1. Certificate of G. Xxxxxx Xxxxxxxxx, President and CEO of Issuer, that (a)
the Offering Document has been declared effective under the Securities Act
of 1933, and (b) no stop order has been issued or threatened to be issued
by the SEC or any other federal or state regulatory authority in connection
with the Offering Document or the offering of Shares pursuant thereto; and
2. An opinion of counsel of Issuer that (a) the Offering Document has been
declared effective under the Securities Act of 1933, and (b) to the best of
its knowledge, no stop order has been issued or threatened to be issued by
the SEC or any other federal or state regulatory authority in connection
with the Offering Document or the offering of Shares pursuant thereto.
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Exhibit C
Fees Payable to Escrow Agent
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