ESCROW AGREEMENT
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Exhibit 10.2
THIS ESCROW AGREEMENT, made and entered into as of the day of October, 2002, by and between Community Bancshares of West Georgia, Inc., a Georgia corporation (the "Company"), and First Tennessee Bank, National Association, a national banking association (the "Escrow Agent"), as escrow agent.
WITNESSETH:
WHEREAS, the Company proposes to offer for sale up to an aggregate of 1,100,000 shares of common stock of the Company a purchase price of $10.00 per share; and
WHEREAS, the Company has agreed to deposit certain proceeds from the offering in escrow on the terms and conditions set forth herein; and
WHEREAS, the Escrow Agent has agreed to accept subscription documents (the "Subscription Documents") to be executed and delivered by subscribers for shares together with sums (the "Subscription Funds") received from such subscribers and to hold and distribute the Subscription Documents and Subscription Funds all in accordance with the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the sum of $ and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Escrow Agent, the parties hereto do hereby agree as follows:
1. Deposits with the Escrow Agent. The Company agrees to deposit with the Escrow Agent, or to cause to be deposited with the Escrow Agent, all Subscription Documents and Subscription Funds received by it. The Company will allow said Subscription Funds and Subscription Documents to remain in escrow with the Escrow Agent and will not withdraw or attempt to withdraw either such Subscription Funds or such Subscription Documents from the Escrow Agent except as herein provided.
2. Minimum Escrow Amount. Except as otherwise provided herein, the Escrow Agent shall negotiate and hold all Subscription Documents and Subscription Funds deposited with the Escrow Agent under the terms of this Escrow Agreement until such time as the Escrow Agent shall a have received Subscription Documents executed by investors agreeing to purchase 750,000 of the shares of stock of the Company and cleared and collected Subscription Funds in the amount of $7,500,000 with respect thereto and a certificate from the President or the Chairman of the Board of the Company that all other conditions to the release of funds as described in the Company's Registration Statement filed with the Securities and Exchange Commission pertaining to the public offering have been met, at which time all Subscription Documents and all Subscription Funds held by the Escrow Agent and any interest earned thereon shall be distributed by the Escrow Agent, to the Company. At the time of the release of the Subscription Documents and Subscription Funds to the Company in the manner described above, except for the provisions of Section 8 hereof, this Escrow Agreement will terminate, and any Subscription Documents or Subscription Funds received by the Escrow Agent after such time will be promptly forwarded to the Company. In the event the Company is unable to raise $7,500,000 in starting capital, the Company, in its sole discretion, may terminate the offering and this Escrow Agreement.
3. Return of Documents and Funds. In the event that the Escrow Agent shall not have received, prior to termination of the offering, Subscription Documents executed by subscribers agreeing to purchase at least 750,000 shares of Company common stock and Subscription Funds in the amount of at least $7,500,000 with respect thereto or the certificate of the President or the Chairman of the Board of the Company described in Section 2 above, the Escrow Agent shall return all Subscription Funds then held by it under this Escrow Agreement, together with any interest actually earned thereon, to the respective subscribers at the addresses indicated on the Subscription Documents, or as such subscribers may otherwise direct, together with the corresponding executed Subscription Documents. After the
distribution of all Subscription Documents and Subscription Funds in accordance with the terms of this Section 3, except for the provisions of Section 8 hereof, this Escrow Agreement shall terminate.
4. Return of Subscriptions. In the event the Escrow Agent shall have received written notification from the Company that any subscription is being returned by the Company to the subscriber, in whole or in part, the Escrow Agent shall return to the subscriber at the address indicated on the subscriber's Subscription Documents, or as such subscriber may otherwise direct, the Subscription Documents executed by such subscriber and all or a portion of the Subscription Funds deposited with the Escrow Agent on behalf of such subscriber. Release of any Subscription Funds by the Escrow Agent under the circumstances described in this Section shall be accomplished by delivery to the subscriber of a check of the Escrow Agent in the amount of the Subscription Funds being returned, together with any interest actually earned thereon, payable to the order of such subscriber.
5. Agreement of the Escrow Agent. The Escrow Agent hereby agrees to receive such deposits of Subscription Documents and Subscription Funds, to hold the same intact, to promptly negotiate all checks, money orders or other instruments received by Subscription Funds, to keep true, complete and accurate records of all deposits and disbursements of the Subscription Documents and Subscription Funds, to permit withdrawal thereof only in accordance with the terms of this Escrow Agreement, and to refund or deliver all such Subscription Funds and Subscription Documents to the respective subscribers or the Company, as the case may be, at the time and in the manner provided under the terms of this Escrow Agreement.
6. Representations of Company. The Company hereby acknowledges that the status of the Escrow Agent with respect to the offering of the shares of stock is that of agent only for the limited purposes herein set forth, and hereby agrees that it will not represent or imply that the Escrow Agent, by serving as the Escrow Agent hereunder or otherwise, has investigated the desirability or advisability of investment in the Company, or has approved, endorsed or passed upon the merits of the shares of the stock or the Company.
7. Liability of the Escrow Agent. The acceptance by the Escrow Agent of its duties under this Agreement is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control with respect to the rights, duties and liabilities of the Escrow Agent;
(a) The Escrow Agent is not a party to and is not bound by any agreement between any one or more of the parties hereto relating to the Subscription Funds, except this Agreement, unless otherwise expressly stated herein.
(b) The duties of the Escrow Agent hereunder are only such as are herein specifically provided, being purely ministerial in nature, and it shall have no responsibility in respect of any of the cash, property or items ("Escrow Deposit") deposited with it other than faithfully to follow the instruments herein contained.
(c) The Escrow Agent acts hereunder as a depositary only. The Escrow Agent is not responsible for or liable in any manner whatever for the sufficiency, correctness, genuineness and validity of any security, document, or other item, which is a part of the Escrow Deposit or for any claim or action by any person, firm, corporation or trustee concerning the right or power of any depositor to make any transfer or the validity of the transfer of any part of the Escrow Deposit to the Escrow Agent.
(d) The Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent, receipt or other paper or documents which the Escrow Agent in good faith believes to be genuine.
(e) The Escrow Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it
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may do or refrain from doing in connection herewith, except its own gross negligence or willful misconduct.
(f) The Escrow Agent is authorized to hire, may consult with, and obtain advice from legal counsel in the event any dispute, conflict or question arises as to the construction of any of the provisions hereof or its duties hereunder. The Escrow Agent shall be indemnified in accordance with Section 8 hereof for all reasonable costs so incurred and shall incur no liability and shall be fully protected for acting in good faith in accordance with the written opinion and instructions of such counsel.
(g) The Escrow Agent may, but shall not be required to, defend itself in any legal proceedings which may be instituted against it or it may, but shall not be required to, institute legal proceedings in respect of the Escrow Deposit, or any part thereof. The Escrow Agent shall be indemnified and held harmless in accordance with Section 8 hereof against the cost and expense of any such defense or action.
(h) The Escrow Agent shall make payment to or for, or deliver documents to, any party only if in the Escrow Agent's judgment such payment or delivery may be made under the terms of this Agreement without its incurring any liability. If conflicting demands not expressly provided for in this Agreement are made or notices served upon the Escrow Agent with respect to its action or omission under this Agreement, the parties hereto agree that the Escrow Agent shall have the absolute right to elect to do either or both of the following:
(i) withhold and stop all future actions or omissions on its part under this Agreement, or
(ii) file a suit in interpleader or for instructions or for a declaratory judgment for other relief and obtain an order from a proper court requiring the parties to litigate in such court their conflicting claims and demands.
In the event any such action is taken, the Escrow Agent shall be fully released and discharged from all obligations.
8. Indemnification of the Escrow Agent. The Company hereby agrees to indemnify and hold harmless the Escrow Agent against any and all losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and counsel fees and disbursements, which may be imposed upon the Escrow Agent or incurred by the Escrow Agent hereunder, or as a result of the performance of its duties as the Escrow Agent hereunder or involving the subject matter hereof, except to the extent that such losses, claims, damages, liabilities and expenses result from the willful misconduct or gross negligence of the Escrow Agent.
9. Escrow Agent Fees, Investment Authorization. The Escrow Agent shall receive for its services hereunder the sum of $ due upon distribution of the Subscription Documents and Subscription Funds as provided in Section 3 hereof. Upon collection, the Escrow Agent shall promptly invest the Subscription Funds, at the direction of the Company, in United States Government securities, or interest bearing accounts offered by the Escrow Agent, or in such other short-term investments as may be agreed upon by the Company and the Escrow Agent from time to time.
10. Instructions and Notice. All notices, requests, demands or other communications authorized or required to be given by any party pursuant to this Agreement shall be in writing to all parties, and
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shall be deemed to have been sufficiently given on the date delivered by hand delivery, by overnight courier or by certified mail, return receipt requested, to the address set forth below:
(i) If to the Escrow, Agent:
First
Tennessee Bank N.A. Trust Department
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxx
(ii) If to the Company:
Community
Bancshares of West Georgia, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
(iii) With a copy to:
Xxxxx
X. Xxxxxxxxxxx Esq.
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Any party hereto may change its address for purposes of notice by notice of such change given to the other parties in the manner specified herein.
11. Amendment. The parties hereto may amend, alter, modify or change any portion of the Escrow Agreement by written agreement of the parties hereto.
12. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall constitute one agreement. The signature of any party to any counterpart shall be deemed to be a signature to, and may be appended to, any other counterpart.
13. Application Of Georgia Law. This Escrow Agreement and the application and interpretation hereof shall be governed exclusively by the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the day and year first above written.
| Community Bancshares of West Georgia, Inc. | |||
By: |
Xxxxxxx X. Xxxxxx President and Chief Executive Officer |
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FIRST TENNESSEE BANK NATIONAL ASSOCIATION |
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By: |
Xxxx Xxxxxxxx Vice President |
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ESCROW AGREEMENT
