SunTrust Bank, Central Florida, National Association
ESCROW AGREEMENT
This Escrow Agreement is entered into and effective this ______ day
of,__________,1997, by and between Federal Trust Corporation, a Florida
corporation ( the "Company") and the SunTrust Bank, Central Florida, National
Association ("Escrow Agent" or "Agent").
WITNESSETH:
WHEREAS, the Company, proposes to offer for sale up to 2,701,619 shares
of its $1.00 par value common stock (the "Common Stock"), which shares shall be
registered under the Securities Act of 1933, as amended, at a price of $2.00
each, in minimum subscriptions of 500 shares ("Offering"); and
WHEREAS, the Company has requested the Escrow Agent to serve as the
depository for the payment of subscription proceeds ('Payments") received by the
Company from investor(s) who are subscribing to purchase shares of Common Stock
in the Company pursuant to, and in accordance with, the terms and conditions
contained in the Company's Prospectus and Subscription Agreements ("Order Form")
thereto; and
WHEREAS, the Offering will terminate at 5:00 P.M. Eastern Time on
November 12, 1997, unless extended by the Company for up to an additional 30
days ( "Offering Period").
NOW THEREFORE, in consideration of the premises and understandings contained
herein, the parties agree as follows:
(1) The Company hereby appoints and designates the Escrow Agent for the
Purposes set forth herein. The Escrow Agent acknowledges and accepts said
appointment and designation. The Company understands that the Escrow Agent, by
accepting said appointment and designation, in no way endorses the merits of the
offering of the shares described herein. The Company agrees to notify any person
acting on its behalf that the position of Escrow Agent does not constitute such
an endorsement, and to prohibit said persons from the use of the Agent's name as
an endorser of such offering. The Company further agrees to allow the Escrow
Agent to review any sales literature in which the Agent's name appears and which
is used in connection with such offering.
(2) The Escrow Agent shall accept all Order Forms and payments (the
"Subscription Funds") delivered to the Escrow Agent (SunTrust Bank, Central
Florida, National Association, Attn: Corporate Trust Division) in the form in
which they are received. The Escrow Agent shall immediately deposit all
Subscription Funds received and shall deliver all Order Forms to the Company
within 2 days of receipt thereof. The Company shall deliver to the Escrow Agent
within five(5) calendar days of receipt of the Order Forms, copies of written
acceptances by the Company for shares in the Company for which the Subscription
Funds represent payment.
(3) Subscription Funds shall be held and disbursed by the Escrow Agent
in accordance with the terms of this Agreement.
(4) In the event any Subscription Funds are dishonored for payment for
any reason, the Escrow Agent agrees to orally notify the Company thereof as soon
as practicable and to confirm same in writing and to return dishonored
Subscription Funds to the Company in the form in which they were delivered.
Page 1 of 5
(5) Should the Company elect to accept a subscription for less than the
number of shares shown in the purchaser's Order Form, by indicating such lesser
number of shares on the written acceptance of the Company transmitted to the
Escrow Agent. Upon notice from the Company of such election, the Escrow Agent
shall remit within ten (10) days to such subscriber at the address shown in his
Subscription Agreement that amount of his Subscription Funds in excess of the
amount which constitutes full payment for the number of subscribed shares
accepted by the Company as shown in the Company's written acceptance, without
interest or diminution. Said address shall be provided by the Company to the
Escrow Agent as requested.
(6) Definitions as used herein:
(a) "Total Receipts" shall mean the sum of all Subscription
Funds delivered to the Escrow Agent pursuant to Paragraph (2) hereof, less (i)
all Subscription Funds returned pursuant to Paragraphs (5) and (6) hereof and
(ii) all Subscription Funds which have not been paid by the financial
institution upon which they are drawn.
(b) "Expiration Date" shall mean 5:00 P.M., Eastern Time on
November 12, 1997, provided, however, in the event that the Escrow Agent is
given oral notification followed in writing, by the Company that it has elected
to extend the offering to a date not later than 30 additional days, then the
Expiration Date shall mean 5:00 P.M., Eastern Time, on the date to which the
offering has been extended. The Company will notify the Escrow Agent of the
effective date of the Offering Circular as soon as practicable after such date
has been determined.
(c) "Closing Date" shall mean the business day on which the
Company, after determining that all of the Offering conditions have been met,
selects in its sole discretion. The Closing Date shall be confirmed to the
Escrow Agent in writing by the Company.
(d) "Escrow Release Conditions" shall mean that (i) the
Company has not canceled the Offering, and (ii) Subscriptions totaling 1,000,000
shares shall have been received by the Company.
(7) If, on or before the Expiration Date, (i) the Total Receipts held
by the Escrow Agent equal or exceed $2,000,000 and (ii) the Company has
certified to the Agent that the Escrow Release Conditions have been consummated,
the Escrow Agent shall :
(a) No later than 10:00 A.M., Eastern Time, one day prior to
Closing Date (as that term is defined herein), deliver to the Company all
Subscription Agreements provided to the Escrow Agent; and
(b) On the Closing Date, no later than 10:00 o'clock A.M.,
Eastern Time, upon receipt of 24-hour written instructions from the Company,
remit all amounts representing Subscription Funds, plus any profits or earnings,
held by the Escrow Agent pursuant hereto to the Company in accordance with such
instructions.
(8) If (i) the Escrow Release Conditions are not met by the Expiration
Date, or (ii) the offering is canceled by the company at any time prior to the
Expiration Date, then the Escrow Agent shall promptly remit to each subscriber
at the address set forth in his Subscription Agreement an amount equal to the
amount of his Subscription Funds thereunder, plus any profits or earnings
thereon. The earnings accruing to any individual subscriber under this paragraph
shall be a prorated share of the gross earnings on all funds under escrow,
weighted by the amount and the duration of the funds tendered for the individual
subscription. Under no circumstances will earnings accrue to any subscription
canceled for any reason other than those provided for in this paragraph.
Page 2 of 5
(9) Pending disposition of the Subscription Funds under this Agreement,
the Escrow Agent will invest collected Subscription Funds, in the SEI Master
repurchase agreement collateralized at 102% with obligations of the United
States Treasury or United States Government Agencies.
(10) The obligations as Escrow Agent hereunder shall terminate upon the
Agents transferring all funds held hereunder pursuant to the terms of Paragraphs
(6) or (7) herein, as applicable.
(11) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, or other
paper or document which the Agent believes to be genuine and what it purports to
be.
(12) The Escrow Agent shall not be liable for anything which the Agent
may do or refrain from doing in connection with this Escrow Agreement, except
for the Agent's own gross negligence or willful misconduct.
(13) The Escrow Agent may confer with legal counsel in the event of any
dispute or questions as to the construction of any of the provisions hereof, or
the Agent's duties hereunder, and shall incur no liability and shall be fully
protected in acting in accordance with the opinions and instructions of such
counsel. Any and all expenses and legal fees in this regard will be paid by the
Company.
(14) In the event of any disagreement between the Company and any other
person resulting in adverse claims and demands being made in connection with any
Subscription Funds involved herein or affected hereby, the Agent shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any Subscription Funds then held under this Agreement, and in so
doing shall be entitled to continue to refrain from acting until (a) the right
of adverse claimants shall have been finally settled by binding arbitration or
finally adjudicated in a court in Orange County, Florida assuming and having
jurisdiction of the Subscription Funds involved herein or affected hereby or (b)
all differences shall have been adjusted by agreement and the Agent shall have
been notified in writing of such agreement signed by the parties hereto. In the
event of such disagreement, the Agent may, but need not, tender into the
registry or custody of any court of competent jurisdiction in Orange County,
Florida all money or property in the Agent's hands under the terms of this
Agreement, together with such legal proceedings as the Agent deems appropriate
and thereupon to be discharged from all further duties under this Agreement. The
filing of any such legal proceeding shall not deprive the Agent of compensation
earned prior to such filing. 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 the Agent in any cost, expense, loss or liability unless
indemnification shall be furnished.
(15) The Escrow Agent may resign for any reason, upon thirty (30) days
written notice to the Company. Upon the expiration of such thirty (30) day
notice period, the Escrow Agent may deliver all Subscription Funds and
Subscription Agreements in possession under this Escrow Agreement to any
successor Escrow Agent appointed by the Company, or if no successor Escrow Agent
has been appointed, to any court of competent jurisdiction. Upon either such
delivery, the Escrow Agent shall be released from any and all liability under
this Escrow Agreement. A termination under this paragraph shall in no way change
the terms of Paragraphs (14) and (16) affecting reimbursement of expenses,
indemnity and fees.
(16) The Escrow Agent will charge the Company for services hereunder a
fee of $1,500.00, plus an additional fee of $15.00 for each Subscription
Agreement processed in excess of 150;. All actual expenses and costs incurred by
the Agent in performing obligations under this Escrow Agreement will be paid by
the Company. All fees and expenses shall be paid on the Closing Date by the
Company. Any subsequent fees and expenses will be paid by the Company upon
receipt of invoice.
Page 3 of 5
(17) All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if sent by registered or certified mail, return
receipt requested, to the respective addresses set forth herein. The Escrow
Agent shall not be charged with knowledge of any fact, including but not limited
to performance or non-performance of any condition, unless the Escrow Agent has
actually received written notice thereof from the Company or its authorized
representative clearly referring to this Escrow Agreement.
(18) The rights created by this Escrow Agreement shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
successors and assigns of the Escrow Agent and the parties hereto.
(19) This Escrow Agreement shall be construed and enforced according to
the laws of the State of Florida.
(20) This Escrow Agreement shall terminate and the Escrow Agent shall
be discharged of all responsibility hereunder at such time as the Escrow Agent
shall have completed all duties hereunder.
(21) This Escrow Agreement may be executed in several counterparts,
which taken together shall constitute a single document.
(22) This Escrow Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the transactions described
herein and supersedes all prior agreements or understandings, written or oral,
between the parties with respect thereto.
(23) If any provision of this Escrow Agreement is declared by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
(24) The Company shall provide the Escrow Agent with its Employer
Identification Number as assigned by the Internal Revenue Service. Additionally,
the Company shall complete and return to the Escrow Agent any and all tax forms
or reports required to be maintained or obtained by the Escrow Agent.
(25) The authorized signature of the Escrow Agent hereto is consent
that a signed copy hereof may be filed with the various regulatory authorities
of the State of Florida and with any Federal Government agencies or regulatory
authorities.
Executed by the Parties hereto on the day first written above:
Federal Trust Corporation
Attest: By:
Authorized Signature
Title:
Type Name and Title
Date:
Page 4 of 5
ADDITIONAL AUTHORIZED SIGNER:
Name:
Additional Authorized Signature
Title:
Type Name and Title
(SEAL)
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION
By:
Authorized Signature
Attest: ______________________
Title:
Date Type Name and Title
By: ______________________
Title: ______________________
(CORPORATE SEAL)
Page 5 of 5