Exhibit 99
ESCROW AGREEMENT
This ESCROW AGREEMENT ("Agreement"), made and entered into as of
__________, 2002, by and among ▇▇▇▇▇▇▇▇ & COMPANY, INC., a Virginia corporation
(the "Underwriter"), CAROLINA BANK HOLDINGS, INC., a North Carolina corporation
("CBHI"), and SUNTRUST BANK, a Georgia banking corporation (the "Escrow Agent").
R E C I T A L S:
A. CBHI proposes to sell up to _________ shares (the "Shares") of
CBHI's common stock, par value $1.00 per share (the "Common Stock"), to the
public at a price of $_____ per share (the "Offering").
B. CBHI has retained the Underwriter, as selling agent for CBHI on a
best efforts basis, to sell the Shares in the Offering, and the Underwriter has
agreed to sell the Shares as CBHI's selling agent on a best efforts basis in the
Offering, the terms of which relationship are set forth in an Underwriting
Agreement between CBHI and the Underwriter (the "Underwriting Agreement").
C. The Underwriter will enter into agreements with other
brokers/dealers (the "Selected Dealers" or individually, the "Selected Dealer")
to assist in the sale of the Shares.
D. The Escrow Agent is willing to hold the proceeds from the Offering
in escrow pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, it is hereby agreed as
follows:
1. Establishment of the Escrow Account. The Underwriter and CBHI
hereby appoint Escrow Agent to serve as escrow agent for purposes of the
Underwriting Agreement, and Escrow Agent hereby accepts the appointment as
escrow agent hereunder and agrees to act on the terms and conditions set forth
in this Agreement.
On or prior to the date of commencement of the Offering, the parties
shall establish an account with the Escrow Agent, which escrow account shall be
entitled "Carolina Bank Holdings, Inc. Escrow Account" (the "Escrow Account").
This Agreement is being executed and the Escrow Account is being established
to, and the parties hereto will, comply with SEC Rule 15c2-4. The Underwriter
shall provide instructions to the Escrow Agent to remit payment for the Shares
by wire transfer of immediately available funds as follows:
SunTrust Bank
ABA #▇▇▇▇▇▇▇▇▇
Credit Account #9443001321
Account Name: Corporate Trust Division
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
FBO: Carolina Bank Holdings, Inc.
2. Escrow Period. The escrow period (the "Escrow Period") shall begin
with the commencement of the Offering and shall terminate upon the Closing Date
(as defined in Section 5 of this Agreement), or ___________, 2002, whichever
first occurs. During the Escrow Period, CBHI is aware and understands that it is
not entitled to any funds received into escrow and no amounts deposited by the
Escrow Agent shall become property of CBHI or any other entity, or be subject to
the debts of CBHI or any other entity.
3. Deposits into the Escrow Account. Funds received from purchasers
by the Underwriter, or Selected Dealers shall be deposited in the Escrow
Account in compliance with SEC Rule 15c2-4. All money so deposited in the Escrow
Account is hereinafter referred to as the "Escrow Funds".
4. Delivery of Escrow Account Proceeds. Upon the Closing Date (as
defined in Section 5 of this Agreement), the Underwriter and CBHI shall provide
the Escrow Agent with written directions for the distribution of the Escrow
Funds, and the Escrow Agent agrees to distribute the Escrow Funds pursuant to
such written directions. If no direction is received on or before 5:00 p.m.,
__________, 2002 (unless such time shall be extended by written agreement of the
Underwriter, CBHI and the Escrow Agent), the Escrow Agent shall return the
Escrow Funds, without interest thereon, to the parties that made payments to the
Escrow Account and this Agreement shall be of no further force or effect.
As an additional consideration for and as an inducement for the
Escrow Agent to act hereunder, it is understood and agreed that, in the event of
any disagreement between the parties to this Agreement or among them or any
other person(s) resulting in adverse claims and demands being made in connection
with or for any money or other property involved in or affected by this
Agreement, the Escrow Agent shall be entitled, at the option of the Escrow
Agent, to refuse to comply with the demands of such parties, or any of such
parties, so long as such disagreement shall continue. In such event, the Escrow
Agent shall make no delivery or other disposition of the Escrow Funds or any
part of such Escrow Funds. Anything herein to the contrary notwithstanding, the
Escrow Agent shall not be or become liable to such parties or any of them for
the failure of the Escrow Agent to comply with the conflicting or adverse
demands of such parties or any of such parties.
The Escrow Agent shall be entitled to continue to refrain and
refuse to deliver or otherwise dispose of the Escrow Account or any part thereof
or to otherwise act hereunder, as stated above, unless and until:
(a) the rights of such parties have been finally sealed by
binding arbitration or duly adjudicated in a court having jurisdiction of the
parties and the Escrow Account; or
(b) the parties have reached an agreement resolving their
differences and have
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notified the Escrow Agent in writing of such agreement and have provided the
Escrow Agent with indemnity satisfactory to the Escrow Agent against any
liability, claims or damages resulting from compliance by the Escrow Agent with
such agreement.
In the event of a disagreement between such parties as described
above, the Escrow Agent shall have the right, in addition to the rights
described above and at the option of the Escrow Agent, to tender into the
registry or custody of any court having jurisdiction, all money and property
comprising the Escrow Account and may take such other legal action as may be
appropriate or necessary, in the opinion of the Escrow Agent. Upon such tender,
the parties hereto agree that the Escrow Agent shall be discharged from all
further duties under this Agreement; provided, however, that the filing of any
such legal proceedings shall not deprive the Escrow Agent of its compensation
hereunder earned prior to such filing and discharge of the Escrow Agent of its
duties hereunder.
5. Closing Date. The "Closing Date" shall be that date specified in
the Underwriting Agreement. The Underwriter will notify the Escrow Agent of the
Closing Date.
6. Investment of Escrow Account. The Escrow Agent shall deposit all
subscription funds it receives in the Escrow Account, which shall be a
non-interest-bearing bank account at SunTrust Bank. The Escrow Funds in the
Escrow Account shall not be invested.
The Underwriter and CBHI each warrant to and agree with the Escrow
Agent that, unless otherwise expressly set forth in this Agreement, there is no
security interest in the Escrow Account; no financing statement under the
Uniform Commercial Code of any jurisdiction is on file in any jurisdiction
claiming a security interest in or describing, whether specifically or
generally, the Escrow Account; and the Escrow Agent shall have no responsibility
at any time to ascertain whether or not any security interest exists in the
Escrow Account or to file any financing statement under the Uniform Commercial
Code of any jurisdiction with respect to the Escrow Account.
7. Compensation of Escrow Agent. The Underwriter shall pay the Escrow
Agent a fee for its services hereunder in an amount equal to $750, which amount
shall be paid on the Closing Date. In the event that the Offering is canceled
for any reason, the Underwriter shall pay the Escrow Agent its fee within 10
days after all of the Escrow Funds have been refunded to the parties that made
payment to the Escrow Account. In addition, the Underwriter agrees to pay to the
Escrow Agent its further expenses incurred in connection with this Agreement,
including but not limited to the actual cost of legal services in the event the
Escrow Agent deems it necessary to retain counsel. Such expenses shall be paid
to the Escrow Agent within 30 days following receipt by the Underwriter of a
written statement setting forth such expenses. The Underwriter agrees that, in
the event any controversy arises under or in connection with this Agreement or
the Escrow Account or the Escrow Agent is made a party to or intervenes in any
litigation pertaining to this Agreement or the Escrow Account, to pay to the
Escrow Agent reasonable compensation for its extraordinary services and to
reimburse the Escrow Agent for all costs and expenses associated with such
controversy or litigation. No such fee, expenses or any other monies whatsoever
shall be paid out of or chargeable to the funds on deposit in the Escrow
Account.
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8. Duties and Rights of the Escrow Agent. The foregoing agreements
and obligations of the Escrow Agent are subject to the following provisions:
(a) The Escrow Agent's duties hereunder are limited solely to
the safekeeping of the Escrow Account and the delivery of the Escrow Account in
accordance with the terms of this Agreement and no additional duties or
obligations shall be implied hereunder. It is agreed that the duties of the
Escrow Agent are only such as herein specifically provided, being purely of a
ministerial nature, and the Escrow Agent shall incur no liability whatsoever
except for gross negligence or willful misconduct. The Escrow Agent shall have
no duty with respect to the Shares.
(b) The Escrow Agent is authorized to rely on any document
believed by the Escrow Agent to be authentic in making any delivery of the
Escrow Account or otherwise acting under this Agreement. It shall have no
responsibility for the genuineness or the validity of any document or any other
item deposited with it, and it shall be fully protected in acting in accordance
with this Agreement or instructions received. The Escrow Agent shall in no event
incur any liability with respect to any action taken or omitted to be taken in
good faith upon advice of legal counsel, which may be counsel to any party
hereto, given with respect to any question relating to the duties and
responsibilities of the Escrow Agent hereunder. Escrow Agent shall not be bound
in any way by any agreement or contract between the Underwriter and CBHI,
including the Underwriting Agreement, whether or not the Escrow Agent has
knowledge of any such agreement or contract.
(c) CBHI and the Underwriter hereby waive any suit, claim,
demand or cause of action of any kind that they may have or may assert against
the Escrow Agent arising out of or relating to the execution or performance by
the Escrow Agent of this Agreement, unless such suit, claim, demand or cause of
action is based upon the gross negligence or willful misconduct of the Escrow
Agent.
(d) The Escrow Agent shall have no obligation to take any legal
action in connection with this Agreement or towards its enforcement, or to
appear in, prosecute or defend any action or legal proceeding which would or
might involve it in any cost, expense, loss or liability unless security and
indemnity, as provided in this subsection, shall be furnished.
The Underwriter and CBHI jointly and severally agree to indemnify
the Escrow Agent and its officers, directors, employees and agents and save the
Escrow Agent and its officers, directors, employees and agents harmless from and
against any and all Claims (as hereinafter defined) and Losses (as hereinafter
defined) which may be incurred by the Escrow Agent or any of such officers,
directors, employees or agents as a result of Claims asserted against the Escrow
Agent or any of such officers, directors, employees or agents as a result of or
in connection with the Escrow Agent's capacity as such under this Agreement by
any person or entity. For the purposes hereof, the term "Claims" shall mean all
claims, lawsuits, causes of action or other legal actions and proceedings of
whatever nature brought against (whether by way of direct action, counterclaim,
cross action or impleader) the Escrow Agent or any such officer, director,
employee or agent, even if groundless, false or fraudulent, so long as the
claim, lawsuit, cause of action or other legal action or proceeding is alleged
or determined, directly or
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indirectly, to arise out of, result from, relate to or be based upon, in whole
or in part: (a) the acts or omissions of the Underwriter and CBHI, (b) the
appointment of the Escrow Agent as escrow agent under this Agreement, or (c) the
performance by the Escrow Agent of its powers and duties under this Agreement;
and the term "Losses" shall mean losses, costs, damages, expenses, judgments and
liabilities of whatever nature (including but not limited to attorneys',
accountants' and other professionals' fees, litigation and court costs and
expenses and amounts paid in settlement), directly or indirectly resulting from,
arising out of or relating to one or more Claims. Upon the written request of
the Escrow Agent or any such officer, director, employee or agent (each referred
to hereinafter as an "Indemnified Party"), the Underwriter and CBHI jointly and
severally agree to assume the investigation and defense of any Claim, including
the employment of counsel acceptable to the applicable Indemnified Party and the
payment of all expenses related thereto and, notwithstanding any such
assumption, the Indemnified Party shall have the right, and the Underwriter and
CBHI jointly and severally agree to pay the cost and expense thereof, to employ
separate counsel with respect to any such Claim and participate in the
investigation and defense thereof in the event that such Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to such Indemnified Party which are different from or additional to
those available to either the Underwriter or CBHI. The Underwriter and CBHI
hereby agree that the indemnifications and protections afforded Escrow Agent in
this subsection shall survive the termination of this Agreement.
(e) In order to induce and as partial consideration for the
Escrow Agent's acceptance of this Agreement, the Underwriter and CBHI
acknowledge that the Escrow Agent is serving as escrow agent for the limited
purposes set forth herein and each represent, covenant and warrant to the Escrow
Agent that no statement or representation, whether oral or in writing, has been
or will be made to any prospective subscribers for any of the Shares to the
effect that Escrow Agent has investigated the desirability or advisability of
investment in the Shares or approved, endorsed or passed upon the merits of such
investment or is otherwise involved in any manner with the transactions or
events contemplated in the offering documents for the Shares being used by the
Underwriter or CBHI other than as the Escrow Agent under this Agreement. It is
further agreed that no party shall in any way use the name "SunTrust Bank" or
"SunTrust Banks, Inc." in any sales presentation or literature except in the
context of the duties of the Escrow Agent as escrow agent of the offering of the
Shares in the strictest sense. Any breach or violation of this subsection shall
be grounds for immediate termination of the Agreement by the Escrow Agent.
Without limitation to any release, indemnification or hold
harmless provision in favor of the Escrow Agent as elsewhere provided in this
Agreement, the Underwriter and CBHI jointly and severally covenant and agree to
indemnify the Escrow Agent and its officers, directors, employees and agents and
to hold the Escrow Agent and such officers, directors, employees and agents
harmless from and against all liability, cost, losses and expenses, including
but not limited to attorneys' fees and expenses which are suffered or incurred
by the Escrow Agent or any such officer, director, employee or agent as a direct
or indirect result of the threat or the commencement of any claim or proceeding
against the Escrow Agent or any such officer, director, employee or agent based
in whole or in part upon the allegation of a misrepresentation or an omission of
a material or significant fact in connection with the sale or subscription of
any one or more of the Shares. The Escrow Agent shall have no responsibility for
approving or
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accepting on behalf of the Underwriter or CBHI any proceeds delivered to it
hereunder, nor shall Escrow Agent be responsible for authorizing issuance of the
Shares or for determining the qualification of any purchaser or the accuracy of
the information contained in any offering documents for the Shares being used by
the Underwriter or CBHI.
(f) The Escrow Agent may resign at any time from its
obligations under this Agreement by providing written notice to the parties
hereto. Such resignation shall be effective on the date set forth in such
written notice which shall be no earlier than 30 days after such written notice
has been given. In the event no successor escrow agent has been appointed on or
prior to the date such resignation is to become effective, the Escrow Agent
shall be entitled to tender into the custody of a court of competent
jurisdiction all assets then held by it hereunder and shall thereupon be
relieved of all further duties and obligations under this Agreement. The Escrow
Agent shall have no responsibility for the appointment of a successor escrow
agent hereunder.
(g) The Escrow Agent will not be responsible for tax reporting
of any income on the Escrow Account.
9. Notices. All notices given hereunder will be in writing,
served by registered or certified mail, return receipt requested, postage
prepaid, or by hand-delivery, to the parties at the following addresses:
To CBHI:
Carolina Bank Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the Underwriter:
▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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To the Escrow Agent:
SunTrust Bank
Corporate Trust Department
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10. Miscellaneous.
(a) This Agreement shall be binding upon, inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
assigns.
(b) If any provision of this Agreement shall be held invalid by
any court of competent jurisdiction, such holding shall not invalidate any other
provision hereof.
(c) This Agreement shall be governed by the applicable laws of
the Commonwealth of Virginia.
(d) This Agreement may not be modified except in writing signed
by the parties hereto.
(e) All demands, notices, approvals, consents, requests and
other communications hereunder shall be given in the manner provided in this
Agreement.
(f) This Agreement may be executed in several counterparts,
each of which counterparts shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument.
(g) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous writings, understandings, agreements, solicitation documents and
representations, express or implied. By execution of this Agreement, the Escrow
Agent shall not be deemed or considered to be a party to any other document,
including the Underwriting Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective names, all as of the date first above written.
▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
CAROLINA BANK HOLDINGS, INC.
By:__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
SUNTRUST BANK
By:__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Trust Officer
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