Exhibit 1.3
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of ________________, 2000 ("Escrow
Agreement"), is by and between WACHOVIA SECURITIES, INC., a North Carolina
corporation ("Sales Agent"); AMERICAN COMMUNITY BANCSHARES, INC., a North
Carolina corporation ("Issuer"); and FIRST UNION NATIONAL BANK, a national
banking association, as Escrow Agent hereunder ("Escrow Agent").
BACKGROUND
A. Issuer has engaged Sales Agent as its agent to assist in the
placement of up to 1,000,000 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. 333-42512 filed with the
Securities and Exchange Commission (the "SEC") and attached hereto as Exhibit A
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(the "Offering 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
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meanings when 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 Union National Bank/American
Community Bancshares, Inc.- 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 Xxxxx X. Xxxxxx, President and CEO
of Issuer.
"Minimum Offering" shall mean 500,000 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.
2. Appointment of and Acceptance by Escrow Agent. Issuer hereby
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appoints 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
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of any 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 Union National Bank
Charlotte, North Carolina
ABA # 000000000
D/5000000016439
FFC: 0000000000/ACB
ATTN: Corporate Trust Department
for American Community Bancshares, Inc. Escrow Account
Notify (000) 000-0000
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
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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 Union National Bank/American
Community Bancshares, Inc.- 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
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Section 10 hereof, Escrow Agent shall pay to Issuer the liquidated value of the
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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
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incorporated 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.
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No later 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 such share to be
calculated on a Pro Rata Basis.
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c. Expiration of Offering Period. Notwithstanding anything to the
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contrary 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 such share to
be calculated on a Pro Rata Basis.
5. Suspension of Performance; Disbursement Into Court. If, at any
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time, 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
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Escrow Agent to 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
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Escrow 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
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Escrow 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. savings accounts of any bank, trust company or national banking
association (including Escrow Agent and its affiliates); 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 six (6) months.
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., Charlotte, North Carolina, 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 Charlotte, North Carolina,
are open for business.
7. Resignation and Removal of Escrow Agent. Escrow Agent may resign
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from the performance of its duties hereunder at any time by giving ten (10)
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 ten
(10) 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 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
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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 with respect
to the Escrow Funds except for 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 such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
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9. Indemnification of Escrow Agent. From and at all times after the
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date of 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
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termination of this 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
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Escrow Agent for its services hereunder in accordance with Exhibit C attached
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hereto and, in 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 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
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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
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Agent shall notify Issuer of any 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 hereof) against the Escrow Funds (to the
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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
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the 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 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.
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(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
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hereto 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
or process to vest personal jurisdiction over them in any of these courts.
13. Notice. All notices and other communications hereunder shall be
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in 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, 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: American Community Bancshares, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
ATTENTION: Xxxxx X. Xxxxxx
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 Union National Bank , as Escrow Agent
Bond Administration
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
ATTENTION: Xxxxx X. Xxxxxxxx
Facsimile Number: (000) 000-0000
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,
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waived, discharged or terminated only by a writing signed by Sales Agent, Issuer
and Escrow Agent. No
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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
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Agreement is 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
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interpreted 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.
18. Binding Effect. All of the terms of this Escrow Agreement, as
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amended 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
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in two 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
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amounts 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
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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,
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officer or 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.
AMERICAN COMMUNITY BANCSHARES, INC., as Issuer
[CORPORATE SEAL] By: __________________________________
Xxxxx X. Xxxxxx, President and CEO
ATTEST:
____________________
Secretary
WACHOVIA SECURITIES, INC., as Sales Agent
By: __________________________________
Xxxxx X. Xxxx, Jr.
Senior Vice President
FIRST UNION NATIONAL 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 Xxxxx X. Xxxxxx, 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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