EXHIBIT 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of June 26, 2005, 2005 ("Escrow
Agreement"), is by and between AMERIFIRST CAPITAL CORP., a Florida corporation
("Underwriter CAPITAL BENEFITS, LLC, a Florida corporation ("Issuer"); and
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as Escrow
Agent hereunder ("Escrow Agent").
BACKGROUND
A. Issuer has engaged Underwriter as its agent to sell a minimum of
2,500 units and up to a maximum of 100,000 units at $1,000 per unit with
an initial minimum investment of one hundred (100) units at $100,000 (the
"Shares") on a "best efforts" basis, pursuant to the a prospectus as filed
with the Securities and Exchange Commission as part of a registration
statement on Form S-1, as amended, attached hereto as Exhibit B (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
Underwriter 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. In addition to the terms defined above, the following
terms shall have the following 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 as set forth in the
Offering Document.
"Cash Investment Instrument" shall mean a check, money order or
similar instrument, made payable to or endorsed to Escrow Agent in the manner
described in Section 3(c) hereof, 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 Escrow Agreement, together with any interest and other income
thereon.
"Expiration Date" means the date so designated on Exhibit A attached
hereto.
"Minimum Offering" shall mean the number Shares so designated on
Exhibit A attached hereto.
"Minimum Offering Notice" shall mean a written notification, signed
by Underwriter, pursuant to which the Underwriter shall represent (1) that
subscriptions for the Minimum Offering have been received, (2) that, to the best
of Underwriter'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, (3) and that such subscriptions have not been
withdrawn, rejected or otherwise terminated, and (4) that the Subscribers have
no statutory or regulatory rights of rescission without cause or all such rights
have expired.
"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
Escrow Funds during such period of days.
"Subscription Accounting" shall mean an accounting of all
subscriptions for Shares received and accepted by Underwriter 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 Underwriter 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 Underwriter, or other termination, for
whatever reason, of such subscription.
2. Appointment of and Acceptance by Escrow Agent. Issuer and
Underwriter hereby appoint 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 Underwriter of any Cash
Investment Instrument for the purchase of Shares, Underwriter shall forward to
Escrow Agent, by 12:00 noon on the next business day, the Cash Investment
Instrument for deposit into the escrow account of the Escrow Agent described on
Exhibit A attached hereto.
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;
(2) a Subscription Accounting; and
(3) instructions regarding the investment of such deposited funds
in accordance with Section 6 hereof.
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 OR ELIGIBLE TO BE RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a)
HEREOF.
b. Underwriter and Issuer understand and agree that all Cash
Investment 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 Instrument is dishonored, Escrow Agent's sole obligation shall be to
notify Underwriter of such dishonor and to return such Cash Investment
Instrument to Underwriter. Notwithstanding the foregoing, if for any reason any
Cash Investment Instrument is uncollectible after payment or disbursement 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 of an amount less than or greater than the Cash Investment, Escrow
Agent's sole obligation shall be to notify Issuer and Underwriter of such fact
and to return such Cash Investment Instrument to Underwriter.
c. All Cash Investment Instruments shall be made payable to the
order of, or endorsed to the order of, "Wachovia Bank, National
Association/Capital Benefits, LLC - Escrow
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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.
a. Completion of Minimum Offering. Subject to the provisions of
Section 10 hereof, Escrow Agent shall pay to Issuer the liquidated value of the
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 C attached hereto and
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 reason 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 Minimum Offering Notice or the documents described on Exhibit C
attached hereto are incorrect 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
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.
No later than fifteen (15) business days after receipt by Escrow Agent of
written notice (i) from Issuer or Underwriter that Underwriter intends to reject
a Subscriber's subscription, (ii) from Issuer or Underwriter that there will be
no closing of the sale of Shares to Subscribers, (iii) from any federal or state
regulatory authority that any application by Issuer to conduct its business has
been denied, or (iv) from the Securities and Exchange Commission or any other
federal or state regulatory authority that a stop or similar 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 all interest income on the
Escrow Funds in the manner set forth in Paragraph 6 on Exhibit A attached
hereto.
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c. Expiration of Offering Period. Notwithstanding anything to the
contrary contained herein, if Escrow Agent shall not have received a Minimum
Offering Notice on or before the Expiration Date, Escrow Agent shall, within
fifteen (15) business days after such Expiration Date and without any further
instruction or direction from Underwriter or 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 all interest income on the Escrow Funds in the
manner set forth in Paragraph 6 of Exhibit A attached hereto.
5. Suspension of Performance or Disbursement Into Court. If, at any
time, (i) there shall exist any dispute between Underwriter, Issuer, Escrow
Agent, any Subscriber or any other person with respect to the holding or
disposition of all or any portion of the Escrow Funds or any other obligations
of Escrow Agent hereunder, or (ii) if at any time Escrow Agent is unable to
determine, to Escrow Agent's sole satisfaction, the proper disposition of all or
any portion of the Escrow Funds or Escrow Agent's proper actions with respect to
its obligations hereunder, or (iii) if Underwriter and Issuer have not within 30
days of the furnishing by Escrow Agent of a notice of resignation pursuant to
Section 7 hereof appointed a successor 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).
b. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue convenient
to Escrow Agent, for instructions with respect to such dispute or uncertainty,
and to the extent required or permitted by law, pay into such court all funds
held by it in the Escrow Funds for holding and disposition in accordance with
the instructions of such court.
Escrow Agent shall have no liability to Underwriter, 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 the Escrow Funds or any delay in or with
respect to any other action required or requested of Escrow Agent.
6. Investment of Funds. The Escrow Agent is herein directed and
instructed to initially invest and reinvest the Escrow Funds as set forth in
Paragraph 5 of Exhibit A attached hereto. With the execution of this document,
the parties hereto acknowledge receipt of prospectuses and/or disclosure
materials associated with the investment vehicle, either through means of
hardcopy or via access to the website associated with the investment selected by
the parties to this Escrow Agreement. The parties hereto acknowledge that they
have discussed the investment and are in agreement as to the selected
investment. The Underwriter and Issuer may provide instructions changing the
investment of the Escrow Funds (subject to applicable minimum investment
requirements) by furnishing joint written instructions ("Joint Written
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Direction") to the Escrow Agent; provided, however, that no investment or
reinvestment may be made except in the following:
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 State of America;
b. certificates of deposit issued by any bank, bank and trust
company, or national banking association (including Escrow Agent and its
affiliates), which certificates of deposit are insured by the Federal
Deposit Insurance Corporation or a similar governmental agency;
c. repurchase agreements with any bank, trust company, or national
banking association (including Escrow Agent and its affiliates); or
d. any institutional money market fund offered by Escrow Agent,
including any institutional money market fund managed by Escrow Agent or
any of its affiliates.
If Escrow Agent has not received a Joint Written Direction 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 Joint Written Direction has been
received, in investments described in clause (d) above. Each of the foregoing
investments shall be made in the name of 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 the Representatives, sell or liquidate any of the
foregoing investments at any time if the proceeds thereof are required for any
disbursement of Escrow Funds permitted or required hereunder. All investment
earnings shall become part of the Escrow Funds and investment losses shall be
charged against the Escrow Funds. Escrow Agent shall not be liable or
responsible for loss in the value of any investment made pursuant to this Escrow
Agreement, or for any loss, cost or penalty resulting from any sale or
liquidation of the Escrow Funds. With respect to any Escrow Funds 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 any investment
instruction until the next day upon which banks in Charlotte, North Carolina are
open for business.
7. Resignation of Escrow Agent. Escrow Agent may resign and be
discharged from the performance of its duties hereunder at any time by giving
ten (10) days prior written notice to the Underwriter and the Issuer specifying
a date when such resignation shall take effect. Upon any such notice of
resignation, the Underwriter and Issuer jointly shall appoint a successor Escrow
Agent hereunder prior to the effective date of such resignation. The retiring
Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall
pay all Escrow Funds to the successor Escrow Agent, after making copies of such
records as the retiring Escrow Agent deems advisable and after payment by Issuer
or deduction from Escrow Funds (to the extent of Issuer's rights therein) of all
fees and expenses (including court costs and attorneys' fees)
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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. After any retiring Escrow Agent's resignation, 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. Any
corporation or association into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any corporation or
association to which all or substantially all of the escrow business of the
Escrow Agent's corporate trust line of business may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.
8. Liability of Escrow Agent.
a. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no duties shall be implied. The Escrow Agent
shall have no liability under and no duty to inquire as to the provisions of any
agreement other than this Escrow Agreement, including without limitation the
Offering Document. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith except to the extent that a court of competent
jurisdiction determines that the Escrow Agent's gross negligence or willful
misconduct was the primary cause of any loss to the Issuer, Underwriter or any
Subscriber. Escrow Agent's sole responsibility shall be for the safekeeping 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 notice,
instruction, request or other 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 believe to be genuine
and to have been signed or presented by the person or parties purporting to sign
the same. In no event shall Escrow Agent be liable for incidental, indirect,
special, consequential or punitive damages (including, but not limited to, lost
profits), even if the Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action. Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow
Agreement or the Offering Document, 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, Underwriter 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, Underwriter 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.
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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.
9. Indemnification of Escrow Agent. From and at all times after the
date of this Escrow Agreement, Issuer shall, to the fullest extent permitted by
law, defend, 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 Underwriter, 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. Each
Indemnified Party shall, in its sole discretion, have the right to select and
employ separate counsel with respect to any action or claim brought or asserted
against it, and the reasonable fees of such counsel shall be paid upon demand by
the Issuer. The obligations of Issuer under this Section 9 shall survive any
termination of this Escrow Agreement and the resignation or removal of Escrow
Agent.
10. Compensation to Escrow Agent.
a. Fees and Expenses. Issuer shall compensate Escrow Agent for
its services hereunder in accordance with Paragraph 3 of Exhibit A attached
hereto and, in addition, shall
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reimburse Escrow Agent upon production of accounts and vouchers or other
reasonable evidence submitted to Issuer by 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
compensation and reimbursement obligations set forth in this Section 10 shall be
payable by Issuer upon demand by Escrow Agent. The obligations of Issuer under
this Section 10 shall survive any termination of this Escrow Agreement and the
resignation or removal of Escrow Agent.
b. Disbursements from Escrow Funds to Pay 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 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.
c. Security and Offset. 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 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. Each of the
Underwriter and the Issuer respectively makes the following representations and
warranties to Escrow Agent:
(1) It is a corporation or limited liability company duly
organized, validly existing, and in good standing under the laws of the state of
its incorporation or organization, 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, including any necessary shareholder or membership approval,
has been executed by its duly authorized officers, and constitutes its valid and
binding agreement, enforceable in accordance with its terms.
(3) The execution, delivery, and performance of this Escrow
Agreement will not violate, conflict with, or cause a default under its articles
of incorporation, articles of
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organization or bylaws, operating agreement or other organizational documents,
as applicable, any applicable law or regulation, any court order or
administrative ruling or decree to which it is a party or any of its property is
subject, or any agreement, contract, indenture, or other binding arrangement to
which it is a party or any of its property is subject. The execution, delivery
and performance of this Escrow 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.
(4) It 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.
(5) All of its representations and warranties 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. Issuer makes the following further representation and warranty
to Escrow Agent:
(1) 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.
c. Underwriter makes the following further representation and
warranty to Escrow Agent:
(1) The deposit with Escrow Agent by Underwriter of Cash
Investment Instruments pursuant to Section 3 hereof shall be deemed a
representation and warranty by Underwriter that such Cash Investment Instrument
represents a bona fide sale to the Subscriber described therein of the amount of
Shares set forth therein, subject to and in accordance with the terms of the
Offering Document.
12. Tax Reporting. All earnings or interest paid hereunder will be
reported by the recipient thereof to the Internal Revenue Service or other
taxing authority. Notwithstanding the foregoing, Escrow Agent shall report to
the Internal Revenue Service or such other taxing authority such earnings as it
deems appropriate or as required by any applicable law or regulation. In
addition, Escrow Agent shall withhold any taxes it deems appropriate and shall
remit such taxes to the appropriate authorities.
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13. Identifying Information. Issuer and Underwriter acknowledge that a
portion of the identifying information set forth on Exhibit A attached hereto is
being requested by the Escrow Agent in connection with the USA Patriot Act,
Pub.L.107-56 (the "Act"), and Issuer and Underwriter agree to provide any
additional information requested by the Escrow Agent in connection with the Act
or any similar legislation or regulation to which Escrow Agent is subject, in a
timely manner. The Issuer and the Underwriter each represent that its respective
identifying information set forth on Exhibit A attached hereto, including
without limitation, its Taxpayer Identification Number assigned by the Internal
Revenue Service or any other taxing authority, is true and complete on the date
hereof and will be true and complete at the time of any disbursement of the
Escrow Funds.
14. Consent to Jurisdiction and Venue. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising from this
Escrow Agreement, the parties hereto agree that the State of Alabama shall have
the sole and exclusive jurisdiction over any such proceeding. If such court
lacks federal subject matter jurisdiction, the parties agree that the State of
Alabama 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 of process to vest personal jurisdiction over them in any of
these courts.
15. Notice. All notices, approvals, consents, requests, and other
communications hereunder shall be in writing and shall be deemed to have been
given when the writing is delivered if given or delivered by hand, overnight
delivery service or facsimile transmitter (with confirmed receipt) to the
address or facsimile number set forth on Exhibit A attached hereto, or to such
other address as each party may designate for itself by like notice, and shall
be deemed to have been given on the date deposited in the mail, if mailed, by
first-class, registered or certified mail, postage prepaid, addressed as set
forth on Exhibit A attached hereto, or to such other address as each party may
designate for itself by like notice.
16. Amendment or Waiver. This Escrow Agreement may be changed, waived,
discharged or terminated only by a writing signed by Underwriter, Issuer and
Escrow Agent. No 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.
17. Severability. To the extent any provision of this Escrow 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.
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18. Governing Law. This Escrow Agreement shall be construed and
interpreted in accordance with the internal laws of the State of Alabama without
giving effect to the conflict of laws principles thereof.
19. Entire Agreement. The information set forth in Exhibit A attached
hereto and the documents described on Exhibit C attached hereto, are hereby
incorporated by this reference, and form a part of this Escrow Agreement. This
Escrow Agreement, constitutes the entire 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.
20. Binding Effect. All of the terms of this Escrow Agreement, as
amended from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of Underwriter, Issuer and
Escrow Agent.
21. Execution in Counterparts. This Escrow Agreement may be executed in
two or more counterparts, which when so executed shall constitute one and the
same agreement.
22. Termination. Upon the first to occur of the disbursement of all
amounts in the Escrow Funds or deposit of all amounts in the Escrow Funds into
court pursuant to Section 5 or Section 8(b) hereof, this Escrow Agreement shall
terminate and Escrow Agent shall have no further obligation or liability
whatsoever with respect to this Escrow Agreement or the Escrow Funds.
23. Dealings. The Escrow Agent and any stockholder, director, 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
Escrow Agreement. Nothing herein shall preclude the Escrow Agent from acting in
any other capacity for the Issuer or any other entity.
[Signatures continued on next page]
-12-
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement
to be executed under seal as of the date first above written.
CAPITAL BENEFITS, LLC
By: AmeriFirst Financial Services, Inc.,
Manager
[CORPORATE SEAL] By: /s/ Brittany M. Ellis
------------------------------------
Brittany M. Ellis, President
ATTEST:
/s/ Brittany M. Ellis
- ---------------------
Secretary
AMERIFIRST CAPITAL CORP.
[CORPORATE SEAL] By: /s/ John Tooke
------------------------------------
John Tooke, Chef Executive Officer
ATTEST:
/s/ Brittany M. Ellis
- ---------------------
Secretary
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By: /s/ Theresa Callaway
----------------------------------
Title: AVP
----------------------------------
-13-
EXHIBIT A
1. Definitions. "Minimum Offering" means2,500 Shares.
"Expiration Date" means October 17, 2005, unless
extended up until April 17, 2006?. If extending the Issuer
shall notify Escrow Agent in writing of such extension.
2. Escrow Account.
Wachovia Bank, National Association
Charlotte ABA# 053000219
Trust Ops Ledger #DDA - 000000016439
ATTN: CT - 84 Birmingham
Re: AmeriFirst Trust #
3. Escrow Agent Fees.
Acceptance Fee: $1,000
Annual Escrow Fee: $2,750
Out-of-Pocket Expenses: billed at cost, if any
Other Fees (Attorney, if any): billed at cost, if any
The Acceptance Fee and the Annual Escrow Fee are payable upon execution of
the escrow documents. In the event the escrow is not funded, the
Acceptance Fee and all related expenses remain due and payable, and if
paid, will not be refunded. Annual fees cover a full year in advance, or
any part thereof, and thus are not pro-rated in the year of termination.
The fees quoted in this schedule apply to services ordinarily rendered in
the administration of an Escrow Account and are subject to reasonable
adjustment based on final review of documents, or when the Escrow Agent is
called upon to undertake unusual duties or responsibilities, or as changes
in law, procedures, or the cost of doing business demand. Services in
addition to and not contemplated in this Escrow Agreement, including, but
not limited to, document amendments and revisions, non-standard cash
and/or investment transactions, calculations, notices and reports, and
legal fees, will be billed as extraordinary expenses.
Unless otherwise indicated, the above fees relate to the establishment of
one escrow account. Additional sub-accounts governed by the same Escrow
Agreement may incur an additional charge. Transaction costs include
charges for wire transfers, checks, internal transfers and securities
transactions.
4. Taxpayer Identification Numbers.
Underwriter: 16-1628026
Issuer: 41-2065933
5. Investment Instructions
Invest all Escrow Funds in the Wachovia Trust Money Access Corp Trust
Account, CUSIP 997981022
6. Termination and Disbursement. In the event there is any termination or
failure of the offering pursuant to Sections 4b or 4c of the Escrow
Agreement, the Escrow Agent shall, in accordance with the Offering
Document (select one):
o 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 interest income earned on the Escrow Funds, each such share
to be calculated on a Pro Rata Basis (as defined in the Escrow
Agreement).
o Pay all monies representing interest and other earnings as soon as
practicable by certified or bank check, subject to Section 10 of the
Escrow Agreement, to Issuer.
7. Notice Addresses. Principal Place of Business, if different
If to Issuer, at: Capital Benefits, LLC Same
2015 A Osborne Rd.,
St. Marys, Georgia 31558
ATTN: John Tooke,
Chief Executive Officer
Facsimile Number: 912-882-9461
If to Underwriter, at: AmeriFirst Capital Corp. Same
2015 A Osborne Rd.,
St. Marys, Georgia 31558
ATTN: John Tooke,
Chief Executive Officer
Facsimile Number: 912-882-9461
If to the Escrow
Agent, at: Wachovia Bank, National Association, as Escrow Agent
Corporate Trust Bond Administration
110 Office Park Drive
Birmingham, AL 35223
ATTENTION: Teresa Callaway
Facsimile Number: 205-254-4180
Exhibit B
Offering Document
Exhibit C
Additional Documents Required
for Release of Escrow Funds
Pursuant to Section 4(a)
1. Certificate of _____(name)___ , ________(office)______ of Issuer, that (a)
the Shares described in the Offering Document have been registered or are
exempt from registration under the Securities Act of 1933, and have been
registered or are exempt from registration under applicable state
securities laws, (b) no stop or similar 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 (c) all representations and
warranties of the Issuer set forth in the Escrow Agreement are true and
correct in all material respects on and as of the date of such certificate
as if made on the date thereof; and
2. An opinion of counsel to Underwriter that (a) the Shares described in the
Offering Document have been registered or are exempt from registration
under the Securities Act of 1933 and have been registered or are exempt
from registration under applicable state securities laws, and (b) to the
best of its knowledge, no stop or similar 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.
[Include documents listed below for offering of bank shares]
1. Certificate of ____(name)____ , ____(office)____ of Issuer, that (a)
Issuer has received from the [insert appropriate State Banking Authority]
approval of its application and a certificate to operate a banking
business and approval of its articles of incorporation, and (b) the Issuer
has been granted deposit insurance by the Federal Deposit Insurance
Corporation.
2. An opinion of counsel to Underwriter that (a) Issuer has received from the
_______________[insert appropriate State Banking Authority]_______
approval of its application and a certificate to operate a banking
business and approval of its articles of incorporation, and (b) the Issuer
has been granted deposit insurance by the Federal Deposit Insurance
Corporation.