EXHIBIT 10.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, executed this ________ day of ____________, 2003, by
CFB Banchares, Inc. (the "Corporation") and First Tennessee Bank (the "Escrow
Agent").
W I T N E S S E T H:
WHEREAS, the Corporation is offering for sale a minimum of $5,000,000 and a
maximum of $7,000,000 in shares of its common stock, $1.00 par value per share
(the "Stock"); and
WHEREAS, the Corporation is desirous of entering into this Escrow Agreement
with the Escrow Agent for the receipt and disposition of the subscription funds
for the Stock of the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
conditions contained herein, the parties hereby agree as follows:
1. Payment of Escrow Account. All payments for each share of Stock will be
held by the Escrow Agent under this Escrow Agreement. The Corporation will hold
the subscription agreements and a copy of the fully executed signature page of
the Subscription Agreement showing the subscriber's name(s), social security
number(s)/tax identification number, address, jurisdiction, capacity of
ownership, and signature(s) of the subscriber(s). Immediately upon collection of
payments for subscriptions, the Company will deliver the payments to the Escrow
Agent. Escrow Agent shall deposit such payments in an account (the "Escrow
Account") and invest and reinvest such funds in the permitted investments
("Permitted Investments") described below. The earnings thereon shall inure to
the benefit of and be distributed to the Corporation or the subscribers as
hereinafter provided, with any taxes to be reported on interest earned to the
tax identification number of the Corporation. A Permitted Investment shall mean
the following, and no other:
(i) certificates of deposit or time deposits constituting direct
obligations of any bank, which deposits are fully insured by the Federal
Deposit Insurance Corporation;
(ii) short-term bonds, notes, certificates of indebtedness, treasury bills,
or other securities constituting direct obligations of the United States of
America; or
(iii) overnight federal funds.
Any Permitted Investment shall be made only as permitted by law and for a
period not longer than is specified by law or through the date in which the
Escrow Agent, upon consultation with the Corporation, determines that the
subscription amounts and all interest accrued thereon will be needed for the
purposes for which such investment is held.
2. Disbursement of Escrow Account. The purpose of the Escrow Account is to
hold the funds of the subscribers. Upon written notice by the bank regulatory
authorities that the Peoples Bank of Xxxxx County (the "Bank") is approved to
commence operating as a bank
and the Corporation is approved to acquire the Bank, the Escrow Agent will
deliver all amounts in the Escrow Account to the Corporation, less any fees due
to Escrow Agent. If requests are made to make payments that are greater than the
amount in the Escrow Account, notice of any deficiency will be given by the
Escrow Agent to the Corporation, and the Escrow Agent will not make any payments
until either the deficiency is eliminated or specific written instructions are
received from the Corporation on paying out the remaining funds. After the
initial distribution to the Corporation, subsequent subscriptions may be paid
directly to the Corporation.
3. Termination of Escrow Agreement; Extension of Escrow Agreement. This
Escrow Agreement shall terminate on the earlier of the date that all funds held
in the Escrow Account are disbursed under the terms of Item 2 of this Escrow
Agreement or upon the termination of the offering of Stock, whichever date is
earlier. If the offering of Stock is terminated, the Escrow Agent will return
all amounts in the Escrow Account to the subscribers of the Stock of the
Corporation, less any amounts due from the organizers of the Bank to the Company
to pay for organizational expenses, which amounts shall be paid to the
Corporation. Distributions will be directed by the Corporation, or its
designated representative. This Escrow Agreement may be extended until such time
as may be agreed upon between the parties hereto. Such extension shall be
evidenced in writing signed by the parties hereto.
4. Duties of Escrow Agent. The Corporation agrees that the following
provisions shall control with respect to the rights, duties, liabilities,
privileges and immunities of the Escrow Agent:
(a) The Escrow Agent is not responsible or liable in any manner whatsoever
for the sufficiency, correctness, genuineness or validity of the
subject matter of payments into the Escrow Account, or any part
thereof, or for the form of execution thereof, or for the identity or
authority of any person executing or deposition the same.
(b) The Escrow Agent shall have no liability hereunder except for the
performance by it in good faith of the acts to be performed hereunder
and except for its own willful misconduct or gross negligence.
(c) The Escrow Agent shall be entitled to rely on any written notice,
demand, certificate or document which, in good faith, it believes to
be genuine.
(d) In the event of conflicting demands upon the Escrow Agent, it may
withhold performance under these instructions until the said
conflicting demands are withdrawn or until the rights of the
respective parties shall have been finally settled by a court
adjudication or otherwise.
(e) The Escrow Agent shall provide to the Corporation, at the address
indicated below or at such other address provided by the Corporation,
statements indicating the activity in the Escrow Account upon request.
(f) The Escrow Agent shall act only in the capacity of an escrow agent
whose duties are limited solely to those set forth herein. The Escrow
Agent shall have no
duties or responsibilities with regard to the offer or sales of Stock
by the Corporation other than those set forth herein.
5. Resignation. The Escrow Agent may resign at any time by giving 10 days'
written notice thereof to the Corporation. If the Escrow Agent shall cease to
act as Escrow Agent, then the Corporation shall appoint its successor or any
other successor. If no successor is appointed, the Escrow Agent may deposit the
Escrow Account with an appropriate court with proper jurisdiction.
6. Indemnification of Escrow Agent. The Corporation agrees to indemnify,
defend, and hold harmless Escrow Agent from any and all liability of any kind
whatsoever including claims and expenses arising by virtue of its services as
Escrow Agent hereunder, except for liabilities due to the Escrow Agent's gross
negligence or willful misconduct.
7. Disputes. In the event of any disputes or questions as to the duties of
the Escrow Agent hereunder, it shall be entitled, at its option, without
liability to any person having a claim to the property held by it, to refuse to
perform any act other than to retain said property held by it, to refuse to
perform any act other than to retain said property in its then condition until
the Escrow Agent's obligations hereunder have been finally determined by
arbitration or in a court of competent jurisdiction, or until it shall have
received appropriate instructions in writing signed by the Corporation.
8. Complete Agreement. This Escrow Agreement sets forth exclusively the
duties of the Escrow Agent with respect to any and all matters pertinent hereto,
and no implied duties or obligations shall be read into this Escrow Agreement
against the Escrow Agent.
9. Notices. All notices, instructions and requests required or permitted to
be given or received under the provisions hereof shall be deemed to have been
fully given or received if delivered or mailed, by registered or certified mail,
postage prepaid, to or from:
If to or from Corporation: Xxxxx X. Xxxx
Citizens First Bank
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
If to or from Escrow Agent: First Tennessee Bank
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn:__________________________
10. Parties in Interest. This Escrow Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
11. Counterparts. This Escrow Agreement may be executed in one or more
counterparts, with the same effect as if each one were an original.
12. Severability. If any provision of this Agreement shall be held or
deemed to be invalid, inoperative or unenforceable as applied in any particular
case in any jurisdiction or jurisdictions or in all jurisdictions, or in all
cases because it conflicts with any other provision or provisions hereof or any
constitution or statute or rule of public policy, or for any other reason, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatever. The invalidity of any one or more phrases,
sentences, clauses or Sections in this Agreement contained shall not affect the
remaining portions of this Agreement, or any part thereof.
13. Captions. The captions and headings in this Agreement are for
convenience of reference only and in no way define, limit or describe the scope
or intent of any provisions or sections of this Agreement.
14. Governing Law. This Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of Tennessee.
15. Escrow Agent Fees. The Escrow Agent fees are $________ per __________
for this service.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on the
day and year first above written.
FIRST TENNESSEE BANK
By:
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Title:
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CFB BANCSHARES, INC.
By:
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Xxxxx X. Xxxx, President
