Exhibit 99.3
ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into this ____ day of
________, 2003, by and among Eagle Bancorp, Inc., a Maryland corporation (the
"Company"), Virginia Commerce Bank, as escrow agent hereunder (the "Escrow
Agent"), and Xxxxxxxx, Xxxxxxxx Xxxxxx & Co., Inc. ("FBR").
BACKGROUND. Pursuant to a prospectus forming a part of a Registration
Statement on Form S-2 filed by the Company with the Securities and Exchange
Commission (the "Prospectus") the Company is offering for sale, through the
efforts of certain of its directors and officers, with the limited assistance of
FBR, a registered broker-dealer, in order to comply with the securities laws of
the jurisdictions in which the shares will be offered, shares of its common
stock, $.01 par value per share, of the Company (the "Common Stock"), for an
aggregate offering price of approximately $10 million, subject to an
oversubscription allotment of an additional $2 million (the "Offering"). Those
persons who desire to purchase shares are required to execute and deliver an
Order Form 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, or wire transfer. The Prospectus provides that all subscriptions should
be delivered to FBR, the subscription agent for the Offering and that all checks
or other orders are to be made payable to the Eagle Bancorp, Inc. Escrow Account
and delivered to the Escrow Agent as escrow agent for the Company.
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 Virginia
Commerce Bank, Arlington, Virginia, 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 FBR, 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 FBR for deposit in escrow hereunder (the "Escrowed Funds") for
the benefit of the parties having an interest therein in accordance with Rule
15c2-4, until released as set forth herein. All checks or other instruments
representing the purchase price of shares shall be made payable to the Escrow
Agent in its capacity as such, and shall be delivered by FBR to the Escrow Agent
no later than noon of the next business day after receipt.
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 interest bearing assets which constitute
permissible investments under SEC Rule 15c2-4. 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
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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
Xxxxxxx X. Xxxx, Xxxxxx X. Xxxx and Xxxxxx X. Xxxxxx, Chairman, President and
Chief Financial Officer, respectively, of the Company, or the then serving
Chairman, President and Chief Financial Officer, to the effect that (i) the
Company has received acceptable subscriptions (including payment in full of the
purchase price) with respect to at least the number of shares of Common Stock
with respect to which funds are sought to be released; and (ii) the Company has
accepted subscriptions with respect to such number of shares of Common Stock.
Such certification shall indicate the exact number of shares of Common Stock
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, Xxxx and/or Tinley and nothing
contained herein shall constitute any obligation, express or implied, of Messrs.
Xxxx, Xxxx and/or Tinley to deliver such certification, or to deliver it at any
specified time; and (2) the certification of an appropriate officer of FBR 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
of Common Stock 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. Xxxx, Xxxx and/or Tinley, or the
then serving Chairman, President and Chief Financial Officer 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 FBR 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. Xxxx, Xxxx and/or Tinley
or the then serving Chairman, President and Chief Financial Officer, 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 EagleBank, Bethesda, Maryland, or to
such other account as the Company may from time to time direct.
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
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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
Company 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: To FBR:
Xxxxxx X. Xxxx Xxxxx Xxxxxxxx Xxxxxxx X. Xxxxx
Eagle Bancorp, Inc. Virginia Commerce Bank Friedman, Billings, Xxxxxx &
0000 Xxxxxxxx Xxxxxx 0000 Xxx Xxxxxxx Xx., Xxx.
Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, XX 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
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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: EAGLE BANCORP, INC>
By
------------------------ -----------------------------------
Name: Name: Xxxxxx X. Xxxx
Title: Title: President
ATTEST: VIRGINIA COMMERCE BANK
By
------------------------ -----------------------------------
Name: Name: X.X. Xxxxxxxx, Xx.
Title: Title: Executive Vice President
ATTEST: FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By
------------------------ -----------------------------------
Name: Name:
Title: Title:
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[Eagle Bancorp letterhead]
____________, 2003
X.X. Xxxxxxxx, Xx.
Virginia Commerce Bank
0000 Xxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
RE: Eagle Bancorp, Inc. Escrow Agreement - Release of funds
Dear Xx. Xxxxxxxx:
On behalf of Eagle Bancorp, Inc. (the "Company") and in connection with
the escrow agreement dated as of __________, 2003 (the "Agreement") among the
Company, Friedman, Billings, Xxxxxx & Co, Inc. and you as escrow agent for
subscriber funds received in respect of the Company's offering of shares of its
common stock, $.01 par value per share, pursuant to its Prospectus dated
________, 2003, we hereby request the release and delivery to the Company of
$___________ of the Escrowed Funds held under the Agreement, representing the
subscription price of ________ shares of common stock in the offering, together
with all undistributed interest and earnings on the Escrowed Funds.
In accordance with Section 5 of the Agreement, we hereby certify as
follows:
1. The undersigned are, respectively, the duly appointed and
currently serving ________ and ___________ of the Company.
2. The Company has received acceptable subscriptions, including
payment in full of the purchase price, with respect to
________________ shares of common stock.
3. The Company has accepted subscriptions with respect to
_____________ shares of common stock in the offering, having
an aggregate subscription price of $___________.
INSERT NEXT PARAGRAPH IF ANY OF ESCROWED FUNDS ARE BEING
RETURNED.
[4. The Company has rejected, revoked or cancelled, in whole or in
part, subscriptions for _______ shares of common stock. The
names and addresses of the subscribers the subscriptions of
which have been rejected, revoked or cancelled, in whole or in
part, and the number of shares relating to such subscription,
and the amount to be returned, are set forth on the attached
schedule.]
Please deposit the released funds to the Company's account as follows:
[INSERT WIRE/PAYMENT INFORMATION]
On behalf of the Company we also advise you that the offering [INSERT
AS APPROPRIATE] [has been terminated as of ________, 200__ /OR/ is continuing
until /OR/ has been extended until ____, 200___].
Thank you for your assistance in this matter, please contact
____________ at ________ with any questions or with respect to any discrepancy
in the amounts reflected by this letter and the amount of Escrowed Funds.
Very truly yours,
-------------------------------
Name:
Title:
-------------------------------
Name:
Title:
[FBR letterhead]
___________, 2003
X.X. Xxxxxxxx, Xx.
Virginia Commerce Bank
0000 Xxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
RE: Eagle Bancorp, Inc. Escrow Agreement - Release of funds
Dear Xx. Xxxxxxxx:
In connection with the escrow agreement dated as of __________, 2003
(the "Agreement") among Eagle Bancorp, Inc. (the "Company"), Friedman, Billings,
Xxxxxx & Co, Inc. ("FBR") and you as escrow agent for subscriber funds received
in respect of the Company's offering of shares of its common stock pursuant to
its Prospectus dated __________, 2003, and the Company's request for the release
and delivery to the Company of $___________ of the Escrowed Funds held under the
Agreement, representing the subscription price of ______ shares of common stock
in the offering, we hereby certify as follows:
1. The undersigned is the duly appointed and currently serving
_________[TITLE] of XXX.
0. The Company has received subscriptions, including payment in
full of the purchase price, with respect to ________________
shares of common stock.
Please contact ____________ at 703._______ with any questions or with
respect to this matter.
Very truly yours,
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
----------------------------------
Name:
Title:
