EXHIBIT 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into as of this 23rd day of July, 1997 by
and among HEARTLAND COMMUNICATIONS & MANAGEMENT, INC. (hereinafter, the
"Depositor"), NORTHRIDGE CAPITAL CORPORATION (hereinafter, the "Selling Agent"),
and XXXXXX XXXXX BANK (hereinafter, the "Escrow Agent").
WHEREAS, Depositor intends to solicit subscriptions ("Subscriptions") for
the purchase of an aggregate of up to $20,000,000 in shares of common stock of
Depositor.
WHEREAS, under the method of subscription described in Depositor's draft
Prospectus dated as of August ___, 1997 (the "Offering"), payment of the
subscription price must be by check, to the order of HEARTLAND COMMUNICATIONS &
MANAGEMENT, INC. ESCROW ACCOUNT (each being a "Subscription Payment"), and the
resulting proceeds from Subscriptions (the "Subscription Proceeds") are required
to be held by an independent depository in escrow;
WHEREAS, the Selling Agent has been appointed by the Depositor to receive
all Subscription Payments and deposit with the Escrow Agent all Subscription
Proceeds; and
WHEREAS, the Depositor and the Selling Agent desire the Escrow Agent to
serve as the depository for the receipt and investment of Subscription Proceeds
and the Escrow Agent is agreeable to serving as such depository;
NOW, THEREFORE, in consideration of the foregoing promises and the
covenants and agreements hereinafter set forth, it is hereby agreed as follows:
1. Escrow Agent.
Xxxxxx Xxxxx Bank is hereby appointed and hereby accepts the appointment,
to serve as Escrow Agent for the Depositor in connection with the Offering on
the terms provided herein.
2. Establishment of Escrow Account and Investment of Funds
a. Upon execution of this Agreement, there shall be established a
separate account for the deposit of the Subscription Proceeds to be
designated as "Heartland Communications & Management, Inc. Escrow Account"
(the "Escrow Account").
b. Any and all Subscription Proceeds shall be forwarded by the
Selling Agent to the Escrow Agent by noon of the business day immediately
following their receipt from subscribers and shall be accompanied by a copy
of each Subscription to which the Subscription Proceeds relate. The Escrow
Agent shall promptly deposit the Subscription
Proceeds into the Escrow Account. The Subscription Proceeds shall be held
in the Escrow Account until disbursed in accordance with the provisions of
paragraph 3.
c. Any Subscription Proceeds placed or held in the Escrow Account
("Escrow Funds") shall be maintained and invested as the Depositor shall
from time to time direct by written notice to the Escrow Agent in FDIC
insured money market accounts or certificates of deposit, or direct United
States Government obligations which can be readily liquidated on
twenty_four hours notice. The Escrow Agent shall not be required to invest
Escrow Funds until three (3) business days after receipt of any
subscriber's check drawn on a local bank, or seven (7) business days after
receipt of any subscriber's check drawn on an out-of-state bank as
stipulated by Banking Regulation CC. During any such clearing period, said
deposits may remain uninvested. No investment of funds will be made for
checks received during the last three (3) business days of the Funding
Deadline (defined below).
d. The Escrow Agent shall notify the Selling Agent and the Depositor
immediately in writing if any check representing a Subscription Payment is
returned to the Escrow Agent for any reason and shall provide a copy of
such returned check to the Selling Agent and the Depositor.
3. Funding Deadline; Disbursement of Funds.
a. The Offering will terminate two (2) months from the effective date
of Depositor's Form S-1 Registration Statement unless the Offering is
extended by the Depositor by written notice to the Escrow Agent to a date
to coincide with the conclusion of the up to nine (9) month Initial
Offering Period as defined in the Prospectus (the "Funding Deadline" for
purposes of this Agreement).
b. All Escrow Funds received during the Initial Offering Period shall
be released to the Depositor pursuant to the instructions of the Depositor
and Selling Agent and only if by the Funding Deadline: (1) Subscriptions
Proceeds of at least $2,000,000 have been deposited in the Escrow Account
and cleared ("Required Funding"); and (2) the Escrow Agent has received an
affidavit from the Depositor signed respectively by the Depositor's
Representative and by the Selling Agent"s Representative (as such
signatures appear on Exhibits A and B hereto) which certifies that the
Depositor has accepted all Subscriptions for which money has been deposited
with the Escrow Agent.
c. If, at the end of the Funding Deadline, the conditions specified
in (b) above have not occurred, the Escrow Agent shall accept no further
Subscription Payments, and the Depositor and the Selling Agent shall notify
the Escrow Agent by written affidavit that the Depositor has not received
the Required Funding by the Funding Deadline. Upon receipt of such
affidavit, the Escrow Agent shall promptly remit the Subscription Proceeds
and accrued interest to the subscribers in proportion to their respective
interests
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according to information to be supplied by Depositors as soon after the
Funding Deadline as is reasonable in light of the bookkeeping and other
tasks such return will entail.
d. All disbursements by the Escrow Agent hereunder may be made by a
check or draft drawn on the institution in which the Escrow Funds are
deposited and shall be mailed by first class, United States mail, postage
prepaid, to the name and address of the subscriber appearing on each
Subscription. All funds remitted to subscribers pursuant to this Agreement
shall be with interest accrued, less any deductions hereunder. The Escrow
Agent shall be entitled to charge the Depositor the fees customarily
charged by the Escrow Agent in connection with issuing checks or drafts as
necessary to return all Escrow Funds to subscribers. The Escrow Agent may
off-set against any interest due to the Depositor hereunder any such
charges and all expenses incurred by the Escrow Agent hereunder.
e. Any and all interest earned on the investment of the Escrow Funds,
less any proper deductions for sums due from the Depositor to the Escrow
Agent, shall be credited on at least a weekly basis.
f. From time to time, the Company shall deliver to the Bank a list of
subscribers that specifies the taxpayer identification numbers, mailing
addresses and respective interests of such subscribers in the Escrow Funds,
which list shall be kept current by the Depositor. The Depositor agrees to
indemnify the Bank for any and all losses (including attorneys' fees) which
the Escrow Agent might incur as a result of paying interest with respect to
the Escrow Funds to such taxpayers in accordance with this Agreement and
the information contained on such lists.
g. In the event that the Escrow Agent has not received instructions
from the Depositor or the Selling Agent by the end of business on the
Funding Deadline, the Escrow Agent shall promptly thereafter proceed to
return the Escrow Funds to the subscribers whose names appear on the
Subscriptions with interest accrued, less deductions hereunder.
4. Subsequent Closings; Disbursement of Funds
a. Subject to the $2,000,000 minimum offering being achieved by the
Fund Deadline provided for in Section 3 of this Agreement (marking the end
of the Initial Offering Period), the Escrow Account will be maintained with
the Escrow Agent.
b. The Offering will terminate on the Funding Deadline unless the
Offering is extended by the Depositor by written notice to the Escrow Agent
to a date no later than 18 months from the date of the Prospectus (the
"Continuous Offering Period," as defined).
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c. All Escrow Funds received during the Continuous Offering Period
shall be released pursuant to the instructions of the Depositor and Selling
Agent (1) at a date that coincides with (a') each month-end or( b')
subscriptions for at least $250,000 are accepted, whichever first occurs;
and (2) the Escrow Agent has received an affidavit from the Depositor
signed by the Depositor's Representative and by the Selling Agent's
Representative (as such signatures appear on Exhibits A and B hereto) which
certifies that the Depositor has accepted all Subscriptions for which money
has been deposited with the Escrow Agent.
d. If, for each Subsequent Closing, the conditions specified in (b)
above have not occurred, the Escrow Agent shall accept no further
Subscription Payments, and the Depositor and the Selling Agent shall notify
the Escrow Agent by written affidavit that the Depositor has not received
the Required Funding by the Subsequent Closing. Upon receipt of such
affidavit, the Escrow Agent shall promptly remit the Subscription Proceeds
and accrued interest to the subscribers in proportion to their respective
interests according to information to be supplied by Depositor as soon
after the Subsequent Closing as is reasonable in light of the bookkeeping
and other tasks such return will entail.
e. All disbursements by the Escrow Agent hereunder may be made by a
check or draft drawn on the institution in which the Escrow Funds are
deposited and shall be mailed by first class, United States mail, postage
prepaid, to the name and address of the subscriber appearing on each
Subscription. All funds remitted to subscribers pursuant to this Agreement
shall be with interest accrued, less any deductions hereunder. The Escrow
Agent shall be entitled to charge the Depositor the fees customarily
charged by the Escrow Agent in connection with issuing checks or drafts as
necessary to return all Escrow Funds to subscribers. The Escrow Agent may
off-set against any interest due to the Depositor hereunder any such
charges and all expenses incurred by the Escrow Agent hereunder.
f. Any and all interest earned on the investment of the Escrow Funds,
less any proper deductions for sums due from the Depositor to the Escrow
Agent, shall be credited on at least a weekly basis.
g. From time to time the Depositor shall deliver to the Escrow Agent
a list of subscribers that specifies the taxpayer identification numbers,
mailing addresses and respective interests of such subscribers is the
Escrow Funds, which list shall be kept current by the Depositor. The
Depositor agrees to indemnify the Escrow Agent for any and all losses
(including attorneys' fees) which the Escrow Agent might incur as a result
of paying interest with respect to the Escrow Funds to such taxpayers in
accordance with this Agreement and the information contained on such lists.
h. In the event that the Escrow Agent has not received instructions
from the Depositor or the Selling Agent by the end of business at each
Subsequent Closing, the
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Escrow Agent shall promptly thereafter proceed to return the Escrow Funds
to the subscribers whose names appear on the Subscriptions with interest
accrued, less deductions hereunder.
5. Standard of Care of Escrow Agent.
5.1 The Escrow Agent shall be responsible only for performance of its
duties as specified in this Agreement, and no implied covenants, duties or
obligations shall bind or be enforceable against the Escrow Agent. The
Escrow Agent shall not be liable to the Depositor, the Selling Agent, the
Subscribers or any other person or entity for any act or failure to act
other than its gross negligence or willful misconduct.
5.2 The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or administered in
good faith, and in the exercise of its own best judgment, and may rely
conclusively and shall be protected in acting upon any order, notice,
demand, certificate, opinion of counsel, other advice of counsel (including
counsel selected by the Escrow Agent), statement, instrument, report or
other document (not only as to its due execution and the validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained) which is reasonably believed by the Escrow
Agent to be genuine and to be signed by the proper person or persons.
5.3 The Escrow Agent shall not be bound by any notice or demand, or
any waiver, modification, termination or rescission of this Agreement or
any of the terms hereof, unless executed in writing by the parties to this
Agreement and delivered to the Escrow Agent.
6. Indemnification of Escrow Agent.
The Depositor agrees to indemnify and hold the Escrow Agent harmless
against any damage, liability, cost or loss which it may incur by reason of its
appointment or performance as Escrow Agent or its identification as such in
Depositor's Prospectus, including, without limitation, reasonable attorney's
fees, except for any damage, liability, cost or loss resulting from the willful
misconduct or gross negligence of the Escrow Agent.
7. Termination.
Escrow Agent's responsibilities hereunder shall cease upon the closing of
the Escrow Account and its disbursement of all of the Escrow Funds pursuant to
paragraph 3 of the Agreement, provided however, that this Agreement shall
terminate on the effective date of the resignation of the Escrow Agent in
accordance with paragraph 10. Notwithstanding the foregoing, the Depositor's
obligations under paragraphs 4 and 5 of this Agreement shall survive the
termination of Escrow Agent's responsibilities hereunder.
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8. Notices.
Any notices, requests, directions, certifications or the like given by the
Depositor, Depositor's Representative, Selling Agent's Representative or the
Escrow Agent in connection with this Escrow Agreement shall be delivered in
person or mailed, certified mail, postage prepaid, to the following addresses:
If to the Escrow Agent:
Xxxxxx Xxxxx Bank
0000 Xxx Xxxxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
If to the Depositor:
Heartland Communications & Management, Inc.
0000 Xxx Xxxxx Xxxxxx Xxxx -- Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
If to the Selling Agent:
Northridge Capital Corporation
000 Xxxxxxxx Xxxx Xxxxx -- Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxx
9. Conflicting Demands.
In the event conflicting demands are made upon the Escrow Agent with
respect to this Agreement, the Escrow Account or any of the Escrow Funds, the
Depositor and the Selling Agent acknowledge and agree that the Escrow Agent
shall have the absolute right to elect to do either or both of the following:(a)
cease all further performance under this Agreement by the Escrow Agent; or (b)
file a suit in interpleader and obtain an order from a court with jurisdiction
over such matter which requires the parties to interplead and litigate in such
court their several claims and rights against each other. In the event an
interpleader suit is brought, the Escrow Agent, at its election, shall be fully
released and discharged from obligations to further perform any and all duties
or obligations imposed upon it under this Agreement, the Depositor agrees to pay
and reimburse the Escrow Agent for all costs, expenses and reasonable attorney's
fees expended or incurred by it in the defense or prosecution of such
interpleader suit in such amounts as shall be fixed and deemed reasonable by the
court.
10. Relationships Among Parties.
The parties hereto expressly recognize that this Agreement does not create
any legal relationship whatsoever among the parties hereto other than as
expressly set forth herein. The
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parties agree that the Subscription Proceeds deposited with the Escrow Agent
shall be deemed held in trust by the Escrow Agent for the benefit of the
Depositor and the Subscribers and shall not be commingled with any other funds
of the Depositor, the Selling Agent or any of their affiliates, in the
possession or custody of the Escrow Agent, or under its control.
11. Resignation of Escrow Agent.
The Escrow Agent may at any time resign and be discharged of the escrow
responsibilities hereby created by giving written notice to the Depositor and
the Selling Agent, specifying the date upon which it desires that such
resignation shall take effect. Such resignation shall take effect on the date
specified in such notice, which date shall be the earlier of: (i) five (5) days
after giving such notice; or (ii) the date upon which the successor to the
Escrow Agent (the "Successor Escrow Agent") shall have been chosen by the
Depositor and the Selling Agent and shall have accepted its appointment as such.
Upon such acceptance, the Escrow Funds may be transferred to an escrow account,
if necessary or desirable, established by the Successor Escrow Agent pursuant to
the provisions of this Agreement. The Successor Escrow Agent shall administer
the Escrow Fund and assume all other duties of the Escrow Agent as set forth in
this Agreement. If no Successor Escrow Agent shall have been appointed as of the
effective date of the resignation of the Escrow Agent as set forth above, the
Escrow Agent or the Depositor may petition a court of competent jurisdiction for
the appointment of a Successor Escrow Agent.
12. Amendments and Modifications.
This Agreement shall not be amended, modified or supplemented except by a
writing executed among the parties hereto.
13. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
14. Governing Law.
This Agreement shall be governed by and construed under the applicable laws
of Georgia, without giving effect to any choice of laws or rules which may
otherwise be applicable.
15. Applicability of Rule 15c2-4.
Notwithstanding anything herein to the contrary, all of the obligations and
duties of the parties hereto shall be subject to and consistent with Rule
15c2-4
under the Securities and Exchange Act of 1934.
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16. Fees and Expenses of Escrow Agent.
Escrow Agent shall be paid a $750 escrow fee. Expenses paid the Escrow
Agent shall be determined in accordance with the fee schedule attached as
Exhibit C. All such fees and expenses shall be paid by the Depositor.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date and year above specified.
HEARTLAND COMMUNICATIONS & MANAGEMENT, INC.
By: Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx, President
XXXXXX XXXXX BANK
By: Xxxx Xxxxxx
------------------------------
Xxxx Xxxxxx, Authorized Officer
NORTHRIDGE CAPITAL CORPORATION
By: Xxxxxxx Xxxx Xxxxx
---------------------------------
Xxxxxxx Xxxx Xxxxx, President
EXHIBIT "A" TO ESCROW AGREEMENT
Signature of Authorized Representative of
HEARTLAND COMMUNICATIONS & MANAGEMENT, INC.
Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
EXHIBIT "B" TO ESCROW AGREEMENT
Signature of Authorized Representative of
NORTHRIDGE CAPITAL CORPORATION
Xxxxxxx Xxxx Xxxxx
--------------------------------
Xxxxxxx Xxxx Xxxxx
Fee
Schedule
Business Accounts
Xxxxxx
Xxxxx Bank
Where smart money banks
Fee Schedule -- Business Accounts
Deposit Accounts Overdraft--Insufficient Funds
Per item charge...........................$25.00
Business Checking*
Minimum deposit to open.....................$100 Returned Check--Insufficient Funds
Monthly Maintenance Fee for daily Per item charge...........................$25.00
account balance under $2,000.............$10.00
Telephone Transfers
Business Interest Checking* Transfers in amounts under $500............$4.75
Minimum deposit to open.....................$100
Monthly Maintenance Fee for Stop Payment, Regular Check................$25.00
daily account balance under $750..........$9.50
Attachments, Tax Liens,
Xxxxx Money Market Account* Garnishments...............................$75.00
Minimum deposit to open...................$1,000
Monthly Maintenance Fee for Cashier's Check--Customers..................$5.95
daily account balance under $2,000........$9.50 --Non-Customers.............$12.95
Charge for third-party payments in
excess of legal maximum..........per item $9.50 Money Order.................................$5.95
Business Savings Accounts* Certified Check............................$14.95
Limit one account per Social Security/Tax ID number.
Minimum deposit to open.....................$100 Charged Back Item...........................$4.75
Quarterly Maintenance Fee for
daily account balance under $200..........$6.00 Other Services
Teller window withdrawal charge
in excess of six per quarter (per item)...$0.95 Research or Reconcilement
Per half hour.............................$11.50
Dormant Checking and Savings Accounts Minimum charge............................$11.50
Subject to regular monthly account charges.
Collection Items
Special Statement...........................$4.75 Bond Coupon, per envelope charge...........$7.50
Individual item
within statement................$0.05 per item+ Sight Drafts......................per item $10.00
(plus research costs)
Securities Purchased or Sold...............$60.00
+Customers whose checks are not returned with
statement are allowed 2 items per month at no charge. Traveler's Cheques (per $100)...............$1.50
*Charge for account closure Traveler's Cheques for Two (per $100).......$1.75
within 90 days of opening.................$17.50
Does not apply to account consolidations. Fee Schedule continues on back panel
Coins, per roll.................................$0.07
Currenty, per strap.............................$0.35
Night Deposit Bag purchase, per bag............$12.00
Wire Transfers
Outgoing Domestic, per wire charge...........$15.00
Outgoing Foreign, per wire charge............$30.00
(plus any additional correspondent bank charges)
Incoming, Non-Customers......................$25.00
Smart Money Talks
(24-hour account information)
Last five debits...........................No Charge
Last five credits..........................No Charge
Balance inquires...........................No Charge
Specific check.............................No Charge
Transfer...........................Not available for
business accounts
Safe Deposit Box Services
Safe Deposit Box Size" Annual Rent
2"x 5"x24" $25.00
3"x 5"x24" $32.50
5"x 5"x24" $47.50
3"x10"x24" $54.50
5"x10"x24" $77.50
10"x10"x24" $127.50
*All sizes not available at all branches
Xxxxxx Xxxxx Bank reserves the right to amend the terms and
conditions contained herein.
Each depositor is insured up to $100,000 by the
Federal Deposit Insurance Corporation
PLUS LOGO EQUAL HOUSING LENDER LOGO MOST LOGO
xxxx://xxx.xxxxxxxxxxxxxxx.xxx
Member FDIC
