EXHIBIT 99(C)
Form of Escrow Agreement
ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into this _____ day of
___________ 199___, 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, and the receipt of all
approvals from state and federal regulatory authorities required for the Company
and its proposed subsidiary, EagleBank, a Maryland chartered bank (the "Bank"),
to commence their respective businesses as a bank holding company and a
commercial bank. 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 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 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 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
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
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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 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; (ii) the Company has
received the approval of the Board of Governors of the Federal Reserve (the
"Federal Reserve") to become a bank holding company; and (iii) the Bank has
received the approval of the Maryland Department of Financial Regulation to
commence business, the approval of the Federal Deposit Insurance Corporation of
the insurance of the Bank's deposits, and the approval from the Federal Reserve
of the Bank's application for membership in the Federal Reserve System. 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.
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
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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 wilful misconduct or gross negligence of
the Escrow Agent.
7. INTENTIONALLY OMITTED.
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 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 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:
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 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.
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(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 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: EAGLE BANCORP, INC.
________________________ By__________________________________________
Name: Name:
Title: Title:
ATTEST: CAPITAL BANK, N.A.
________________________ By__________________________________________
Name: Name:
Title: Title:
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