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EXHIBIT 10 C. ESCROW AGREEMENT BETWEEN COMPANY AND MID AMERICAN NATIONAL BANK
& TRUST COMPANY
ESCROW AGREEMENT
This Escrow Agreement dated as of December 23, 1997 is entered into by
and between Western Reserve Bancorp, Inc., an Ohio corporation (the "Company"),
and Mid American National Bank & Trust Co., Bowling Green, Ohio (the "Escrow
Agent").
RECITALS
A. The Company proposes to engage in offering for sale a minimum of 250,000
common shares and a maximum of 500,000 common shares (the "Shares") at a per
share price of $20.00 per share (the "Offering"), pursuant to a Prospectus (the
"Prospectus") which is to be filed as part of a Registration Statement on form
S-1 with the Securities and Exchange Commission and appropriate state regulatory
agencies, a copy of which will be provided to the Escrow Agent.
B. The Offering provides that all sums paid in connection with subscriptions for
the minimum number of 250,000 Shares (the "Offering Proceeds") will be deposited
into an Escrow Account with the Escrow Agent and will be subject to certain
terms and conditions as hereinafter described. However, some of the Shares have
been and will be sold to the Organizers of the Company outside of the escrow as
described in the Prospectus.
C. The Company desires to have Mid American National Bank & Trust Co. act as
Escrow Agent and in connection with such responsibilities to establish an
appropriate segregated interest bearing account to receive for deposit all of
the aforesaid Offering Proceeds of sales of the Offering.
D. Escrow Agent desires to act in such capacity.
AGREEMENT
In consideration of these premises and of the mutual promises and other
good and valuable consideration, the parties hereby agree as follows:
1. Appointment of Escrow Agent
The Company hereby appoints Mid American National Bank & Trust Co. as
the Escrow Agent and Mid American National Bank & Trust Co. hereby accepts such
appointment to serve as the Escrow Agent, all in accordance with the terms and
conditions set forth herein.
2. Term of the Escrow Agreement
The term of this agreement shall commence on the date hereof and shall
terminate upon completion of the Offering, whether successful or unsuccessful.
As of the date hereof, it is anticipated that such term will end no earlier than
July 1, 1998 or later than September 30, 1998, provided, however, that the
Company can further extend the Offering as described in the Prospectus.
3. Compensation under Escrow Agreement
For its services rendered hereunder, the Escrow Agent shall be entitled
to receive the fees set forth on Exhibit A attached hereto and made a part
hereof. All interest income generated from holding the Offering Proceeds in an
interest bearing account shall be disbursed as herein described.
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4. Recording of Proceeds of the Offering Held in Escrow
In accordance with the provisions herein, the Company shall provide and
the Escrow Agent is responsible for recording: (i) the name and address of the
subscriber; (ii) the amount of Offering Proceeds held in escrow under such
subscriber's name; (iii) the date of deposit of such Offering Proceeds; (iv)
interest earned on such deposit; and (v) the date of distribution from the
Escrow Account for each deposit made by the Company in the name of such
subscriber.
5. Conditions for Release of Escrowed Funds/Termination
The Escrow Agent shall act as Escrow Agent hereunder until the earlier
to occur of:
(a) The sale of 250,000 shares, including the Shares of the Company
sold to the Organizers of the Company outside of the escrow; or
(b) July 1, 1998, provided, however, that the Company may, by letter to
the Escrow Agent, extend this Expiration Date until not later than
December 31, 1998. Any extension beyond September 30, 1998 will require
the approval of the then current subscribers to Shares in the Offering.
Upon the occurrence of one of the foregoing two events, the Escrow
Agent shall remit the balance of monies held in the Escrow Account by issuing
its cashiers checks payable to the Company or, if the Company fails to accept
subscription agreements representing the sale of at least 250,000 Shares prior
to the Expiration Date, then, the Escrow Agent shall return the Proceeds to each
subscriber. The person or entity to which the subscription proceeds are remitted
also shall receive from the Escrow Agent interest on such Subscription Proceeds
in an amount equal to the U.S. Government Money Market Fund rate from time to
time in effect with the Escrow Agent during the time period while the Offering
Proceeds were held in escrow
6. Delivery of Proceeds to the Escrow Agent
Proceeds from the Offering shall be delivered, in accordance with the
Subscription Agreement, to the Company and the Company hereby agrees to deliver
such Offering Proceeds to the Escrow Agent within five (5) days of acceptance of
such subscriptions. Further, Company agrees to provide to the Escrow Agent the
name, address, amount subscribed for by subscribing individual, the date
accepted by the Company, the date delivered to the Escrow Agent and a copy of
substitute IRS Form W-9 for each such subscriber.
7. Investment of Proceeds
All Proceeds of the offering held in the Escrow Account by the Escrow
Agent shall be invested in interest bearing accounts. All such funds shall be
invested in the Escrow Agent's U.S. Government Money Market Fund unless
otherwise mutually agreed to by the Company and the Escrow Agent. In no event
shall any such Proceeds be held in other than such account or short term
obligations of the United States Government or shares of a money market fund,
the assets of which are invested in short term obligations of the United States.
The Escrow Agent shall hold such Proceeds of the Offering in a separate account
on behalf of the Company as herein described, and shall hold such proceeds under
the name of the individual subscriber.
8. Indemnification
The Company hereby agrees to indemnify and hold harmless the Escrow
Agent from and against any and all claims, liabilities, losses, actions, suits
or proceedings at law or in equity, which it may incur or with which it may be
threatened by reason of its acting as Escrow Agent as herein described, and in
connection therewith, to indemnify Escrow Agent against any and all expenses
(including attorneys' fees)
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or costs of defending any such action, suit or proceeding or resisting any such
claims, provided, however, that the provisions of this paragraph shall not apply
in the event of any claim, liability, loss, action, suit or proceeding,
resulting from a material breach by the Escrow Agent of any provisions in this
agreement or from its gross negligence or willful misconduct.
9. Contingencies
If any event, circumstances or happening shall arise or occur that is
not provided for hereunder, the Escrow Agent shall have no duty to act or not
act, as the case may be, until: (a) written instructions are received from the
Company; or (b) instructions are provided by a court of competent jurisdiction.
10. Miscellaneous
This Escrow Agreement shall be read in accordance with and interpreted
under the laws of the State of Ohio. It is further agreed among the parties that
all conflicts of law as relating to this agreement shall be under the
jurisdiction of the laws and courts of the State of Ohio. This agreement shall
be binding upon the Company and Escrow Agent and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date and year above stated.
Western Reserve Bancorp, Inc. Mid American National Bank & Trust Co.
By: /s/ Xxxxxx X. XxXxxx By: /s/ J. Xxxxxx Xxxxx
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Xxxxxx X. XxXxxx, President J. Xxxxxx Xxxxx, Senior Vice President
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EXHIBIT A
In consideration of the Escrow Agent timely fulfilling its duties and
obligations under this Agreement, the Company agrees to pay to the Escrow Agent
the following fees pursuant to Paragraph 3 of the Agreement:
A. An escrow administration fee of $1,200.00, $600.00 of which is payable
upon execution hereof, receipt of which is hereby acknowledged by the
Escrow Agent, and the balance due at the termination of this Agreement.
B. A subscriber maintenance fee of $10.00 per subscriber account
established will be charged at the termination of this Agreement,
except that this charge will be waived if the Offering is successful
and Mid American National Bank & Trust Co. is not required to issue any
1099 forms to any subscribers, but only to issue one form 1099 to the
Company.
C. $85.00 per hour for "extraordinary" work on the part of Escrow Agent,
provided that fees under this subparagraph D. shall not exceed $500.00
without the Company approving the "extraordinary" work required. Such
$500.00 limit shall not apply to the indemnification of the Escrow
Agent pursuant to the provisions of Paragraph 8 of this Agreement.
