EXHIBIT 99(C)
Form of Escrow Agreement
ESCROW AGREEMENT
This AMENDED AND RESTATED ESCROW AGREEMENT is made and entered into
this 22nd day of January, 1998, by and between Eagle Bancorp, Inc., a Maryland
corporation (the "Company"), and Capital Bank, N.A., Rockville, Maryland (the
"Escrow Agent").
BACKGROUND. Pursuant to a prospectus forming a part of a Registration
Statement on Form SB-2 filed by the Company with the Securities and Exchange
Commission (the "Prospectus") the Company is offering for sale, Xxxxxx
Securities, Inc., a registered broker dealer ("Xxxxxx") or another broker-dealer
in jurisdictions in which Xxxxxx is not registered and through the efforts of
certain of its organizers, a minimum of 800,000 and a maximum of 1,200,000
shares of its common stock, $5 par value per share, of the Company (the "Common
Stock"), plus an Oversubscription Allotment of an additional 180,000 shares, at
a price of $10.00 per share (the "Offering"). Those persons who desire to
purchase shares are required to execute and deliver a subscription agreement and
are required to pay the full purchase price of the shares subscribed for at the
time of subscription, by cash, check, bank draft or money order. The Prospectus
provides that all subscriptions should be delivered to Xxxxxx, and that all
checks or other orders are to be made payable to the Escrow Agent as escrow
agent for the Company.
The sale of any shares in the Offering is subject to various
conditions, including the receipt of acceptable subscriptions and payment in
respect of at least 800,000 shares of Common Stock. Pending closing upon the
sale of shares or termination of the Offering, all monies received from
subscribers on account of the purchase of shares are to be deposited in an
escrow account with the Escrow Agent. The parties hereto wish to set forth
herein the terms and conditions governing the escrow account and the funds being
delivered to and held by the Escrow Agent.
NOW THEREFORE, in consideration of the mutual promises herein
contained, each intending to be legally bound hereby, the parties hereto agree
as follows:
1. ESCROW AGENT. The Company hereby designates and appoints Capital
Bank, N.A. Rockville, Maryland, as Escrow Agent to serve in accordance with the
terms and conditions of this Amended and Restated Escrow Agreement and the
Escrow Agent agrees to act as such Escrow Agent in accordance with the terms and
conditions of this Amended and Restated Escrow Agreement.
2. CREATION OF ESCROW. At any time and from time to time after the date
hereof until completion of the Offering and Closing thereunder, the Company
shall deliver, or cause to be delivered by Xxxxxx, to the Escrow Agent funds
representing the purchase price of shares subscribed for by subscribers. The
Escrow Agent shall accept and hold in escrow all such funds received by it from
the Company or Xxxxxx for deposit in escrow hereunder (the "Escrowed Funds")
until released as set forth herein.
3. INVESTMENT OF ESCROWED FUNDS. Pending release from escrow, the
Escrowed Funds shall, not later than the first business day following receipt,
be invested by the Escrow Agent in interest bearing short-term United States
government securities. All interest accrued on the Escrowed Funds or on interest
earned on the Escrowed Funds shall be retained by the Escrow Agent as part of
the Escrowed Funds and released in accordance with the provisions of this
Amended and Restated Escrow Agreement. It is acknowledged and agreed that the
Escrowed Funds, including any interest or earnings thereon, are not assets or
deposit liabilities of the Escrow Agent, but constitute funds submitted to the
Escrow Agent for safekeeping and investment pending disbursement in accordance
with the provisions of this Amended and Restated Escrow Agreement.
4. INFORMATION. From time to time upon the request of the Company, the
Escrow Agent shall furnish to the Company a statement of the amount of Escrowed
Funds held by the Escrow Agent, the approximate amount of any accrued interest
thereon, and such other information as the Company may reasonably request. The
Escrow Agent shall immediately notify the Company if any check representing
Escrowed Funds or other purported transfer of Escrowed Funds fails to result in
the delivery of funds to the Escrow Agent.
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5. RELEASE OF ESCROWED FUNDS.
(a) Release of Escrowed Funds to the Company. (i) Immediately upon
the receipt of the certificate of the Company as described below, the Escrow
Agent shall release and deliver to the Company such portion of the Escrowed
Funds as represents payment of the purchase price of shares in respect of which
the Company has accepted subscriptions. Except as provided in Section 5(b)
hereof, the Escrow Agent shall not release any portion of the Escrowed Funds to
the Company until it has received: (1) a certification of Xxxxxxx X. Xxxx and
Xxxxxx X. Xxxx, Chairman and President, respectively, of the Company, or the
then serving Chairman and President, to the effect that (i) the Company has
received acceptable subscriptions (including payment in full of the purchase
price) with respect to not less than 800,000 shares, and has accepted
subscriptions with respect to not less than 800,000 shares. Such certification
shall indicate the exact number of shares with respect to which subscriptions
have been accepted. Notwithstanding anything to the contrary contained herein,
the delivery of the foregoing certification shall be in the sole discretion of
Messrs. Xxxx and Xxxx and nothing contained herein shall constitute any
obligation, express or implied, of Messrs. Xxxx and Xxxx to deliver such
certification, or to deliver it at any specified time; and (2) the certification
of an appropriate officer of Xxxxxx to the effect that the Company has received
subscriptions (including payment in full of the purchase price) with respect to
not less than the number of shares for which the release of funds is sought.
(ii) In the event that the Offering shall continue with respect to
additional shares following the release of funds described in (a)(i) above, then
the Escrow Agent shall, immediately upon the receipt from time to time of one or
more certificates of: (1) Messrs. Xxxx and Xxxx, or the then serving Chairman
and President of the Company, stating that the Company has received acceptable
subscriptions (including payment in full of the purchase price) with respect to
a specified number of additional shares, and has accepted subscriptions with
respect to such number of additional shares; and (2) the appropriate officers of
Xxxxxx to the effect that the Company has received subscriptions (including
payment in full of the purchase price) with respect to at least that number of
additional shares, release and deliver to the Company such portion of the
Escrowed Funds as represents payment of the purchase price of such number of
additional shares in respect of which the Company has accepted subscriptions.
(b) Release of Escrowed Funds to Subscribers. Immediately after
receiving a certification of Messrs. Xxxx and Xxxx, or the then serving Chairman
and President to the effect that the Company has either (i) terminated the
Offering in whole or in part; or (ii) rejected, revoked or cancelled in whole or
in part any subscription payment in respect of all or a portion of which has
been received by the Escrow Agent, then the Escrow Agent shall return to the
subscriber whose subscription shall have been rejected, revoked or cancelled, in
whole or in part, as a result of termination of the Offering or otherwise,
Escrowed Funds representing such subscriber's payments, or all subscribers'
payments in the event of termination of the Offering as a whole, and shall
release to the Company, all interest or other earnings accrued on such portion
of the Escrowed Funds.
(c) Release of Earnings. On the first day of each month during which
there shall be any Escrowed Funds in escrow hereunder, or at such other time or
times as the Company may in writing direct, the Escrow Agent shall release that
portion of the Escrowed Funds which represent interest or other earnings on any
portion of the Escrowed Funds, to the Company. Such release shall be effected by
the deposit of such interest or other earnings to the Company's transaction
account maintained at Capital Bank. N.A., Rockville, Maryland.
6. LIMITATION OF LIABILITY. It is agreed that the duties of the Escrow
Agent are limited to those herein specifically provided and are ministerial in
nature. It is further agreed that the Escrow Agent shall incur no liability
whatever except by reason of its willful misconduct, gross negligence or bad
faith. The Escrow Agent shall be under no obligation in respect to amounts held
in escrow hereunder other than faithfully to follow the instructions herein
contained or delivered to the Escrow Agent in accordance with this Amended and
Restated Escrow Agreement. It shall not be required to institute legal
proceedings of any kind. It shall have no responsibility for computations to be
made in accordance herewith or for the genuineness or validity of any document
or other item deposited with it, and it shall be fully protected in acting in
accordance with the Amended and Restated Escrow Agreement upon any written
instructions given to it and reasonably believed by it to have been duly
executed by the Company in accordance herewith. The Company shall indemnify and
hold the Escrow Agent harmless against any claims,
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demands, damages or losses with respect to any thing done by the Escrow Agent in
good faith in any and all matters covered by this Agreement in accordance with
the instructions or provisions set forth herein, except such as may arise
through or be caused by the wilful misconduct or gross negligence of the Escrow
Agent.
7. COMPENSATION. The Company shall pay all compensation, expenses and
other charges of the Escrow Agent relating to its services hereunder for so long
as the Escrow Agent holds any amount in Escrow hereunder. The Escrow Agent and
the Company agree that such compensation shall be as described in Schedule A
hereto.
8. RESIGNATION. The Escrow Agent, or any successor to it hereafter
appointed, may at any time resign by giving notice in writing to the Company
and, upon the appointment of a successor Escrow Agent as hereinafter provided,
shall be discharged from any further duties hereunder. In the event of such
resignation, a successor Escrow Agent, which shall be a bank or trust company
organized under the laws of the United States of America, shall be appointed by
the Company. Any such successor Escrow Agent shall deliver to the Company a
written instrument accepting such appointment hereunder, and thereupon it shall
succeed to all of the unaccrued rights and duties of the Escrow Agent hereunder
and shall be entitled to receive all of the then remaining amounts held in
escrow hereunder.
9. TERMINATION. This Amended and Restated Escrow Agreement shall
terminate upon the earlier of: (i) the receipt by the Escrow Agent of a written
notice of termination signed by the Company accompanied by sufficient
certifications or other documentation to verify that all subscriptions to which
the Escrowed Funds relate shall have been accepted and certificates representing
such shares issued or rejected in whole; or (ii) the distribution of all of the
Escrowed Funds, including all undistributed interest or earnings, in accordance
with this Amended and Restated Escrow Agreement following termination or
completion of the Offering. Upon termination pursuant to clause (i) above, the
Escrow Agent shall deliver any Escrowed Funds remaining after return to
subscribers of Escrowed Funds representing rejected subscriptions as instructed
in such notice of termination.
10. NOTICES. Except as otherwise provided in this Agreement, any notice
or other communication hereunder shall be in writing and shall be deemed
delivered upon personal delivery or upon receipt if sent by facsimile
transmission, express delivery service or mailed by registered or certified
first class mail, postage prepaid, and addressed as follows:
To the Company: To the Escrow Agent:
Xxxxxx X. Xxxx Capital Bank, N.A.
Eagle Bancorp, Inc. Attention:
0000 Xxxxxxxxx Xxxx Xxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxx, Xxxxxxxx 00000
or to such other addresses or persons as the parties, from time to time, may
furnish one another by notice given in accordance with this section.
11. MISCELLANEOUS.
(a) Assignment. This Amended and Restated Escrow Agreement and
the rights of the parties hereunder may not be assigned by the Escrow Agent
without the consent of the Company, which consent may be withheld in the
absolute discretion of the Company, and any attempted assignment in violation of
this Section 11(a) shall be void. This Amended and Restated Escrow Agreement and
all action taken hereunder in accordance with its terms shall be binding upon
and inure to the benefit of each of the parties hereto and its respective
successors, permitted assigns, heirs, and legal representatives.
(b) Amendment. This Amended and Restated Escrow Agreement may
be amended upon written notice to the Escrow Agent at any time by the Company
but the duties, responsibilities or compensation of the Escrow Agent may not be
modified without its consent.
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(c) Waiver. Waiver of any term or condition of this Amended
and Restated Escrow Agreement by any party shall not be construed as a waiver of
a subsequent breach or failure of the same term or condition, or a waiver of any
other term or condition of this Amended and Restated Escrow Agreement.
(d) Governing Law. This Amended and Restated Escrow Agreement
shall be governed by and construed in accordance with the laws of the State of
Maryland, without reference to the conflicts or choice of law principles
thereof.
(e) Integration. This Amended and Restated Escrow Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and there are no other agreements, covenants,
representations or warranties except as set forth herein.
(f) Authority. Each party executing this Amended and Restated
Escrow Agreement warrants its authority to execute this Amended and Restated
Escrow Agreement.
(g) Counterparts. This Amended and Restated Escrow Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Escrow Agreement to be signed the day and year first above
written.
ATTEST: EAGLE BANCORP, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Name: Xxxxxx X. Xxxx
Title: Title: President
ATTEST: CAPITAL BANK, N.A.
/s/Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxx
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Name: Xxxxxxx X. Xxxxx Name: Xxxxx Xxxxxx
Title: SVP/ Cashier Title: Vice President / Controller
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SCHEDULE A
ESCROW AGENT COMPENSATION
The compensation to be paid to the Escrow Agent for its services hereunder shall
be as follows:
Initial setup fee: $500.00
Securities transaction fee: $50.00 per transaction
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