Exhibit 99(c)
ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into this ____ day of , 1999,
by and between CommerceFirst Bancorp, Inc., a Maryland corporation (the
"Company"), and (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, with the limited
assistance of Xxxxxx Securities, Inc., a registered broker dealer ("Xxxxxx") or
another broker-dealer in jurisdictions in which Xxxxxx is not registered, the
services of Capitol Investment group as finder, and through the efforts of
certain of its organizers, a minimum of 650,000 and a maximum of 800,000 shares
of its common stock, $.01 par value per share, of the Company (the "Common
Stock"), plus an oversubscription allotment of an additional 200,000 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 650,000 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 , as Escrow
Agent to serve in accordance with the terms and conditions of this Escrow
Agreement and the Escrow Agent agrees to act as such Escrow Agent in accordance
with the terms and conditions of this 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 then the first business day following receipt,
be invested by the Escrow Agent in an interest bearing Repurchase Agreement
secured by United States government securities. All interest accrued on the
Escrowed Funds or interest earned on the Escrowed Funds shall be retained by the
Escrow Agent until released in accordance with the provisions of this Escrow
Agreement. It is acknowledged and agreed that the Escrowed Funds, including any
interest or earnings thereon, are not assets of the Escrow Agent, but constitute
funds placed with the Escrow Agent for deposit, safekeeping and investment
pending disbursement in accordance with provisions of this 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.
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 any two of
Xxxxxx X. Xxxxxxxx XX, Xxxxxxx X. Xxxxxx and/or Xxxxxx Xxxxxx, Chairman,
President and Executive Vice President/Treasurer , respectively, of the Company,
or the then serving Chairman, President and Executive Vice President/treasurer,
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
650,000 shares, and has accepted subscriptions with respect to not less than
650,000 shares; and (ii) the Company has received final approval to become a
bank holding company, and the Company's proposed bank subsidiary has received
final approval to commence business as a bank. 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. Xxxxxxxx, Xxxxxx and/or Xxxxxx and nothing contained herein shall
constitute any obligation, express or implied, of Messrs. Xxxxxxxx, Xxxxxx
and/or Xxxxxx 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) any two of Messrs. Xxxxxxxx, Xxxxxx and/or Xxxxxx, or
the then serving Chairman, President and Executive Vice President/Treasurer 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 any two of Messrs. Xxxxxxxx, Xxxxxx and/or
Xxxxxx, or the then serving Chairman, President and Executive Vice
President/Treasurer, 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. It is expressly agreed that, in the event any
release of escrowed funds to subscribers is required for any reason, the Company
will provide, as part of its certification, complete information to enable such
action to be completed in a prompt and timely manner.
(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 __________________.
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 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 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, 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 willful misconduct or gross negligence of the Escrow Agent.
7. COMPENSATION. The Company shall pay all reasonable and customary
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 thirty (30) day advance 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 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 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:
Xxxxxxx X. Xxxxxx
CommerceFirst Bancorp, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 000
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 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 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 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.
(c) Waiver. Waiver of any term or condition of this 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 Escrow Agreement.
(d) Governing Law. This 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 Escrow Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes any prior agreement 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 Escrow Agreement
warrants its authority to execute this Escrow Agreement.
(g) Counterparts. This 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 Escrow
Agreement to be signed the day and year first above written.
ATTEST: COMMERCEFIRST BANCORP, INC.
By
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Name: Name: Xxxxxxx X. Xxxxxx
Title: Title: President
ATTEST:
By
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Name: Name:
Title: Title:
