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EXHIBIT 10.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated as of March 31, 1999,
is by and between Satilla Financial Services, Inc., a Georgia corporation (the
"Company"), and The Bankers Bank, Atlanta, Georgia (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Company proposes to publicly offer and sell (the
"Offering") a minimum of 450,000 shares (the "Minimum Offering") and a maximum
of 550,000 shares (the "Maximum Offering") of its common stock, par value $.01
per share (the "Shares"), at a price of $10.00 per Share in cash;
WHEREAS, the Offering will be made pursuant to a Prospectus dated
__________, 1999 (the "Prospectus") and a related Subscription Agreement, (the
"Subscription Agreement"), each of which will be distributed to prospective
investors and a form of each of which has been delivered to the Escrow Agent;
WHEREAS, the Company desires to establish an escrow account (the
"Escrow Account") to hold and invest subscription funds ("Subscription Funds")
that are delivered by subscribers in the Offering ("Subscribers") pending
satisfaction of the conditions to the Minimum Offering, and the Escrow Agent is
willing to serve as escrow agent upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. DEPOSIT WITH ESCROW AGENT.
(a) The Escrow Agent understands that, pursuant to the
instructions contained in the Prospectus and the Subscription Agreement,
Subscribers in the Offering shall deliver to the Company a completed
Subscription Agreement together with Subscription Funds for the Shares
subscribed. The Company will accept only those subscriptions that satisfy the
following conditions:
(i) the Subscription Agreement is properly completed and signed;
(ii) the Subscription Agreement is for the purchase of at least 200
Shares;
(iii) the Subscription Agreement is accompanied by Subscription
Funds in an amount sufficient to pay for all subscribed
Shares; and
(iv) the Subscription Funds are paid by check, money order or other
bona fide payment instrument to "The Bankers Bank, Satilla
Escrow Agent."
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If any of the foregoing conditions is not satisfied, the
Company will promptly return the Subscription Agreement and the Subscription
Funds to the Subscriber, showing the defects and requesting correction and
return of a properly completed Subscription Agreement and related payments, and
the Escrow Agent shall have no obligations with respect to such rejected
subscriptions.
(b) With respect to all subscriptions that satisfy the
conditions set forth in Section 1(a), the Company will promptly forward to the
Escrow Agent: (i) a copy of the Subscription Agreement, which sets forth, among
other things, the Subscriber's name and address, certified tax identification
number, and the number of Shares subscribed, and (ii) the Subscription Funds
payable to the Escrow Agent for the number of Shares subscribed.
(c) The Escrow Agent agrees that it will from time to
time accept, in its capacity as escrow agent, Subscription Funds for the Shares,
which have been forwarded to the Escrow Agent by the Company, and which, upon
collection, the Escrow Agent will invest in accordance with Section 2 hereof.
The Escrow Agent agrees that it will not accept any Subscription Agreements or
Subscription Funds sent from Subscribers directly to the Escrow Agent, and that,
in the event the Escrow Agent does receive Subscription Agreements or
Subscription Funds directly from Subscribers, the Escrow Agent shall promptly
forward them to the Company.
(d) All checks shall be made payable to the Escrow Agent.
If any check does not clear normal banking channels in due course, the Escrow
Agent will promptly notify the Company. Any check which does not clear normal
banking channels and is returned by the drawer's bank to the Escrow Agent will
be promptly turned over to the Company along with all other subscription
documents relating to such check. Any check received that is made payable to a
party other than the Escrow Agent shall be returned to the Company for return to
the proper party. The Company in its sole and absolute discretion may reject any
subscription for Shares for any reason and upon such rejection it shall notify
and instruct the Escrow Agent in writing to return the Escrowed Funds by check
made payable to the Subscriber.
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of
each check by the Escrow Agent, the Escrow Agent shall invest the accepted
Subscription Funds (following their acceptance by the Escrow Agent, the
"Escrowed Funds") in deposit accounts or certificates of deposit which are fully
insured by the Federal Deposit Insurance Corporation or another agency of the
United States government, short-term securities issued or fully guaranteed by
the United States government, federal funds, or such other investments as the
Escrow Agent and the Company shall agree. The Company shall provide the Escrow
Agent with instructions from time to time concerning in which of the specific
investment instruments described above the Escrowed Funds shall be invested, and
the Escrow Agent shall adhere to such instructions. Unless and until otherwise
instructed by the Company, the Escrow Agent shall by means of a "sweep" or other
automatic investment program invest the Escrowed Funds in blocks of $10,000 in
federal
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funds. Interest and other earnings shall start accruing on such funds as soon as
such funds would be deemed to be available for access under applicable banking
laws and pursuant to the Escrow Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall
distribute the Escrowed Funds in the amounts, at the times, and upon the
conditions hereinafter set forth in this Agreement.
(a) If at any time on or prior to the Expiration Date of the
Offering (as defined in the Prospectus), (i) the Escrow Agent has certified to
the Company in writing that the Escrow Agent has received at least $4,500,000 in
Escrowed Funds, and (ii) the Escrow Agent has received written confirmation from
the President or the Chairman of the Board of Directors of the Company that all
other conditions to the release of funds as described in the Prospectus with
respect to the Minimum Offering have been met, then, upon the direction of the
Company, the Escrow Agent shall deliver the Escrowed Funds to the Company in the
manner specified by the Company. If, however, any portion of the Escrowed Funds
are not collected funds, then the Escrow Agent shall notify the Company of such
fact and shall distribute such funds to the Company only after such funds become
collected funds. For purposes of this Agreement, "collected funds" shall mean
all funds received by the Escrow Agent which have cleared the normal bank
collection process and are available to the Escrow Agent hereunder.
(b) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable to the Company based on failure to meet the conditions
described in Paragraph 3(a), or if the Company terminates the Offering without
completing the Subscriptions received and accepted, at any time prior to the
Closing Date and delivers written notice to the Escrow Agent of such
termination, then the Escrow Agent shall return the collected Escrowed Funds to
Subscribers whose Subscription Agreements and Subscription Funds were accepted
by the Company, in amounts equal to the Subscription Funds paid by each of them,
plus interest earned thereon divided amongst the Subscribers according to the
number of Shares subscribed and the amount of time the Subscriber's Subscription
Funds have been held in escrow by the Escrow Agent.
The specific allocation of interest and net profits attributable to
each Subscriber shall be determined by the Escrow Agent as follows: each
Subscriber's allocated share of earnings on the Escrowed Funds, after deducting
the Escrow Agent's fees hereunder, if any, shall be that fraction (i) the
numerator of which is equal to (x) the amount of each Subscriber's accepted
Subscription Funds multiplied by (y) the number of days between the date that
the Escrow Agent collected such funds and the date of the Offering's termination
(with respect to each Subscriber, the Subscriber's "Time Subscription Factor"),
and (ii) the denominator of which is equal to the aggregate Time Subscription
Factors of all Subscriber's depositing Escrowed Funds in the Escrow Account.
All Subscription Funds which have been delivered to the Escrow Agent
by the Company but which have not been collected shall first be collected by the
Escrow Agent
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and subsequently returned to the respective Subscribers without interest. The
Company is aware and understands that, until it becomes entitled to receive the
Escrowed Funds, as described in Section 3(a) hereof, the Company is not entitled
to any Escrow Funds, and that no amounts deposited in the Escrow Account shall
become the property of, or become subject to the debts of, the Company or any
other entity.
4. FEE OF ESCROW AGENT. The Escrow Agent will accrue a service
charge of $15.00 per each month that it holds Escrowed Funds. In addition, a
$20.00 per check fee will be charged if the Escrow Account has to be refunded
due to a failure to complete the Offering. The Escrow Agent is hereby authorized
to deduct such fees from the Escrowed Funds prior to any release thereof
pursuant to Section 3 hereof.
5. LIABILITY OF ESCROW AGENT.
(a) In performing any of its duties under the Agreement or upon
the claimed failure to perform its duties hereunder, the Escrow Agent shall not
be liable to anyone for any damages, losses or expenses which it may incur as a
result of any action or failure to act by the Escrow Agent that is taken or
omitted to be taken in good faith by the Escrow Agent; provided, however, that
the Escrow Agent shall be liable for damages arising out of its willful
misconduct, gross negligence or breach of this Agreement. Accordingly, the
Escrow Agent shall not incur any such liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of its counsel or counsel
for the Company which is given with respect to any questions relating to the
duties and responsibilities of the Escrow Agent hereunder; or (ii) any action
taken or omitted to be taken in reliance upon any document, including any
written notice or instructions provided for this Escrow Agreement, not only as
to its due execution and to the validity and effectiveness of its provisions but
also as to the truth and accuracy of any information contained therein, if the
Escrow Agent shall in good faith believe such document to be genuine, to have
been signed or presented by a proper person or persons, and that is consistent
with the provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be incurred by the Escrow Agent in connection
with its acceptance of this appointment as Escrow Agent or the performance of
its duties hereunder, including, without limitation, any litigation arising from
this Escrow Agreement or involving the subject matter thereof; provided,
however, that that if the Escrow Agent shall be found guilty of breaching this
Agreement or engaging in willful misconduct or gross negligence in connection
herewith, then the Escrow agent shall bear all such losses, claims, damages and
expenses.
(c) If a dispute arises between any of the parties hereto which,
in the opinion of the Escrow Agent, is sufficient to justify its doing so, the
Escrow Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a party by
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reason of this Agreement. The Escrow Agent shall be entitled to tender into the
registry or custody of any court of competent jurisdiction all money or property
in its hands under the terms of this Agreement, and to file such legal
proceedings as it deems appropriate, and shall thereupon by discharged from all
further duties under this Agreement. Any such legal action may be brought in any
such court as the Escrow Agent shall determine to have jurisdiction thereof. In
connection with such dispute, the Company shall indemnify the Escrow Agent
against its court costs and reasonable attorney's fees incurred.
(d) The Escrow Agent may resign at any time upon giving thirty
(30) days written notice to the Company. If a successor escrow agent is not
appointed by the Company within thirty (30) days after notice of resignation,
the Escrow Agent may petition any court of competent jurisdiction to name a
successor escrow agent, and the Escrow Agent herein shall be fully relieved of
all liability under this Agreement to any and all parties upon transfer of the
Escrowed Funds and all related documentation thereto, including appropriate
information to assist the successor escrow agent with the reporting of earnings
of the Escrowed Funds to the appropriate state and federal agencies in
accordance with the applicable state and federal income tax laws, to the
successor escrow agent designated by the Company or appointed by a court.
6. APPOINTMENT OF SUCCESSOR. The Company may, upon the delivery
of thirty (30) days written notice appointing a successor escrow agent to the
Escrow Agent, terminate the services of the Escrow Agent hereunder. In the event
of such termination, the Escrow Agent shall immediately effect the transfer of
the Escrowed Funds and all related documentation thereto, including appropriate
information to assist the successor escrow agent with the reporting of earnings
of the Escrowed Funds to the appropriate state and federal agencies in
accordance with the applicable state and federal income tax laws, less any fees
and expenses due to be paid to the Escrow Agent or required to be paid by the
Escrow Agent to a third party pursuant to this Agreement.
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7. NOTICE. All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall
be in writing and, in the case of notices, requests or demands made other than
by facsimile, shall be deemed to have been duly given three (3) days after
having been deposited for mailing if sent by registered mail, or certified mail
return receipt requested, or delivery by courier, to the respective addresses
set forth below:
IF TO THE SUBSCRIBERS FOR SHARES: To their respective
addresses as specified in
their Subscription
Agreements.
THE COMPANY: Satilla Financial Services, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. XxxXxxxxx, III
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE ESCROW AGENT: The Bankers Bank
0000 Xxxxx Xxxxx Xxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
8. REPRESENTATIONS OF THE COMPANY. The Company hereby
acknowledges that the Escrow Agent shall have the duties and responsibilities
stated herein, and the Company agrees 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 in an investment in the Shares, or
has approved, endorsed or passed upon the merits of the Shares. The Company
shall not use the name of the Escrow Agent in any manner whatsoever in
connection with the offer or sale of the Shares, other than disclosing the
Agreement, the Escrow Agent's services hereunder, and the Escrow Agent's name
and address to potential investors in the Offering.
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9. GENERAL.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(c) This Agreement sets forth the entire agreement and
understanding of the parties with regard to this escrow transaction and
supersedes all prior agreements, arrangements and understandings relating to the
subject matter hereof.
(d) This Agreement may be amended, modified, superseded or
canceled, and any of the terms or conditions hereof may be waived, only by a
written instrument executed by each party hereto or, in the case of a waiver, by
the party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to require such performance at a later time. No waiver in any one or more
instances by any part of any condition, or of the breach of any term contained
in this Agreement, whether by conduct or otherwise, shall be deemed to be, or
construed as, a further or continuing waiver of any such condition or breach, or
a waiver of any other condition or of the breach of any other terms of this
Agreement.
(e) This Agreement may be executed simultaneously 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.
(f) This Agreement shall inure to the benefit of the parties
hereto and their respective permitted successors and assigns. The Escrow Agent
shall be bound only by the terms of this Escrow Agreement and shall not be bound
by or incur any liability with respect to any other agreement or understanding
between the parties except as herein expressly provided. The Escrow Agent shall
not have any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable
in the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
SATILLA FINANCIAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President and
Chief Executive Officer
By: /s/ Xxxxx X. Xxxx, Xx.
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Name: Xxxxx X. Xxxx, Xx.
Title: Chairman
THE BANKERS BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
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