Exhibit 10.6


 


SOUTH
CAROLINA BANK AND TRUST


 


ESCROW
AGREEMENT


 


Relating to Subscriptions for Shares of  Coastal Carolina Bancshares, Inc.


 


This Escrow Agreement (the “Agreement”) is made and entered into as of
the 6th day of June, 2008, by and between Coastal Carolina Bancshares, Inc.,
a South Carolina corporation  (the “Company”) and South Carolina Bank and Trust, (the “Escrow
Agent”).


 


WHEREAS, the Company proposes to offer and
sell (the “Offering”) up to 3,000,000 shares of Common Stock, $0.01 par value
per share (the “Shares”), to investors at $10.00 per Share pursuant to a public
offering registered pursuant to the Securities Act of 1933; and


 


WHEREAS, the Company desires to establish an
escrow for funds forwarded by investors for Shares, and the Escrow Agent is
willing to serve as Escrow Agent upon the terms and conditions herein set
forth.


 


NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


 


1.     ESCROW DEPOSIT.


 


a.       Each investor
will deliver the funds in payment for the Shares purchased by such investor, as
set forth in the Subscription Agreement, to the Company for further delivery to
the Escrow Agent.  The Company will
collect and deliver to the Escrow Agent appropriate IRS W-9 Forms for each
investor.  Checks should be made payable
to “South Carolina Bank and Trust, as Escrow Agent for Coastal Carolina
Bancshares, Inc.”  If any check does
not clear normal banking channels in due course, the Escrow Agent will promptly
notify the Company.  Any check which does
not clear normal banking channels and is returned by the drawer’s bank to
Escrow Agent will be promptly turned over to the Company along with all other
subscription documents relating to such check. 
Any check received that is made payable to a party other than the Escrow
Agent shall be returned to the Company for return to the proper party.  The Company in its sole and absolute
discretion may reject any subscription for Shares in whole or in part for any
reason and upon such rejection, it shall notify and instruct the Escrow Agent
in writing to return the appropriate amount of Escrowed Funds by check made
payable to the investor.  If the Company
rejects or cancels any subscription for any reason, the Company will retain any
interest earned on the Escrowed Funds to help defray organizational costs.


 


b.       Subscription Agreements for
the Shares shall be promptly reviewed for accuracy by the Company and,
immediately thereafter, the Company shall promptly deliver to the Escrow Agent
the following information: (i) the name and address of the investor; (ii) the
number of Shares subscribed for by such investor; (iii) the subscription
price paid by such investor; (iv) the investor’s tax identification number
certified by such investor; and (v) a copy of the investor’s Subscription
Agreement.


 


2.     INVESTMENT OF ESCROW DEPOSIT.  All funds received by the Escrow Agent
pursuant to this Agreement shall be invested, to the extent practicable, in
deposit accounts or certificates of deposit which are insured by the Federal
Deposit Insurance Corporation or another agency of the 


 


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United States government, short-term
securities issued or fully guaranteed by the United States government, federal
funds, or such other investments as the Escrow Agent and the Company shall
agree.  All investments shall comply with
applicable laws, rules and regulations, including Rule 15(c)(2-4)
under the Securities Exchange Act of 1934. 
The Company shall provide the Escrow Agent with instructions from time
to time concerning in which of the specific investment instruments described
above the Escrowed Funds shall be invested, and the Escrow Agent shall adhere
to such instructions.  Unless and until
otherwise instructed by the Company, the Escrow Agent shall invest the Escrowed
Funds in Escrow Agent’s Business Money Market Account.  Interest will begin accruing no later than
the next business day after receipt.  Incoming
wire transfers received by 6:00 P.M. (ET) will be posted as soon as
feasible.  Incoming wire transfers
received without a Subscription Agreement will be posted, but returned after
five business days if a Subscription Agreement has not been received by the
Company. Interest and other earnings shall start accruing on such funds as soon
as such funds would be deemed to be available for access under applicable
banking laws and pursuant to the Escrow Agent’s own banking policies.


 


3.     CERTIFICATION
OF FUNDS.  Upon receipt of (i) funds
in the amount of at least $21 million in payment for Shares, and (ii) at
the direction of Company, the Escrow Agent shall certify to the appropriate
regulatory authorities that the Escrow Agent holds a minimum of $21 million on
deposit in the escrow account for the purchase of Shares in Company.


 


4.     DISTRIBUTION OF FUNDS.  The Escrow Agent shall distribute the funds
held by it under this Agreement as follows:


 


a.       Upon receipt of (i) funds
in the amount of at least $21 million in payment for Shares, and (ii) a
certificate executed by the Company’s CEO or CFO attesting that all other
conditions to the release of funds as described in the Company’s prospectus
pertaining to the offering, including but not limited to approval of the appropriate
bank regulators, have been met and directing the Escrow Agent to distribute all
funds then held by the Escrow Agent pursuant to this Agreement to the Company,
then the Escrow Agent shall deliver the funds, by cashier’s check, wire
transfer, or other form of payment mutually acceptable to the Company and the
Escrow Agent, to the Company, together with the income earned thereon pursuant
to subsection (c) of this Section 4. 
The parties anticipate that there may be multiple distributions of
escrowed funds and that the Company will deliver a certificate from the Company’s
CEO or CFO as contemplated above prior to each such distribution.  No distribution will be made until the last
investor deposit to be distributed in that distribution has been made for at
least two business days.  The Company
shall provide account information and other necessary directions for
disbursements by the Escrow Agent to it under this Agreement.  The Escrow Agent must be provided a copy of
the form of Subscription Agreement at the signing of this Agreement.


 


b.       Upon (i) receipt
of direction from the Company, to return the funds to the investors; or (ii) in
the event the Escrow Agent shall have received less than $21 million or shall
have received no direction or certificate from the Company pursuant to either
subsection (a) or this subsection (b) of this Section 4 on or prior
to initial closing date of  the Offering
as described in the Company’s prospectus (unless the Company notifies the
Escrow Agent that the Offering has been extended), the Escrow Agent shall
distribute such funds to the investors, without interest, pursuant to
subsection (c) of this Section 4. 
The Company may give notice to the Escrow Agent that the Company is
canceling its offer of the Shares prior to the ultimate expiration date of the
Offering as described in the Company’s prospectus (beyond such date the
Offering may not be extended by the Company), and the Escrow Agent shall
distribute the funds to the investors in accordance with this Agreement.


 


c.       Any income earned on
the investment of funds received under this Agreement will first be applied
against the Escrow Agent’s fee set forth in Section 9 hereof and any
expense of the Escrow Agent incurred pursuant to Section 6 hereof,
provided that in no event shall 


 


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the Escrow Agent apply any of the investors’
original investment principal towards such fees and expenses.  To the extent that such income exceeds the
Escrow Agent’s fee and expenses, the Escrow Agent shall distribute such excess
to the Company, in the event that funds are returned to investors pursuant to
subsection (b) of this Section. 
Such excess shall also be delivered to the Company, in the event that
the funds received and held hereunder are delivered to the Company pursuant to
subsection (a) of this Section.  To
the extent that the income earned on the investment of funds does not exceed
the Escrow Agent’s fees and expenses, the Company shall promptly pay the Escrow
Agent the amount by which the Escrow Agent’s fees and expenses exceed the
income.


 


5.     AUTHORIZATION FOR DISBURSEMENT.  The Escrow Agent is hereby authorized and
directed to issue its checks for each disbursement hereunder and the Escrow
Agent shall be relieved of all liability with respect to making the
disbursements in accordance with the provisions hereof.


 


6.     PROFESSIONAL SERVICES USED BY ESCROW AGENT.  The Escrow Agent may engage the
services of such attorneys, accountants, and other professionals, as the Escrow
Agent may, in its sole discretion, deem advisable to carry out its duties under
the Agreement.  The Company agrees to
reimburse the Escrow Agent for all costs, expenses and professional fees
incurred hereunder which are not covered by income earned on escrowed funds
pursuant to Section 4(c) hereof, including all legal fees and
expenses incurred in the review of this Agreement.


 


7.     LIABILITY OF ESCROW AGENT.


 


a.       In performing any of its duties under the
Agreement, or upon the claimed failure to perform its duties hereunder, the
Escrow Agent shall not be liable to anyone for any damages, losses or expenses
which it may incur as a result of the Escrow Agent so acting, or failing to
act; provided, however, the Escrow Agent shall be liable for damages arising
out of its willful default or misconduct or its gross negligence under this
Agreement.  Accordingly, the Escrow Agent
shall not incur any such liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of its counsel or counsel for the
Company which is given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder; or (ii) any action taken
or omitted to be taken in reliance upon any document, including any written
notice or instructions provided for in this Agreement, not only as to its due
execution and to the validity and effectiveness of its provisions but also as
to the truth and accuracy of any information contained therein, if the Escrow
Agent shall in good faith believe such document to be genuine, to have been
signed or presented by a proper person or persons, and to conform with the
provisions of this Agreement.


 


b.       The Company agrees to indemnify and hold harmless the Escrow Agent
against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitation, any litigation arising from this Agreement or involving the subject
matter thereof; except, that if the Escrow Agent shall be found guilty of
willful default, misconduct or gross negligence under this Agreement, then, in
that event, the Escrow Agent shall bear all such losses, claims, damages and
expenses.


 


c.       If a dispute ensues between any of the
parties hereto which, in the opinion of the Escrow Agent, is sufficient to
justify its doing so, the Escrow Agent shall retain legal counsel of its choice
as it reasonably may deem necessary to advise it concerning its obligations
hereunder and to represent it in any litigation to which it may be a party by
reason of this Agreement.  The Escrow
Agent shall be entitled to tender into the registry or custody of any court of
competent jurisdiction all money or property in its hands under the terms of
this Agreement, and to file such legal proceedings as it deems appropriate, and
shall 


 


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thereupon be discharged from all further
duties under this Agreement.  Any such
legal action may be brought in any such court as the Escrow Agent shall
determine to have jurisdiction thereof. 
In connection with such dispute, the Company shall indemnify the Escrow
Agent against its court costs and reasonable attorney’s fees incurred.


 


8.     RESIGNATION.  The Escrow
Agent may resign at any time upon fifteen days’ written notice to the
Company.  Such resignation shall take
effect upon receipt by the Escrow Agent of an instrument of acceptance executed
by a successor escrow agent and subscribed and consented to by the Company, and
the delivery by the Escrow Agent to such successor of any funds held under this
Agreement.  The Escrow Agent, if it has
not received such an instrument of acceptance prior to the expiration of
fifteen calendar days after the giving of notice of resignation, shall be
discharged of its duties and obligations hereunder only upon the deposit of any
funds being held by it under this Agreement into, and the acceptance thereof,
by a court of competent jurisdiction, to which application shall be made for
the appointment of a successor escrow agent and such successor agent so
appointed shall succeed to all of the rights, duties and responsibilities of
the Escrow Agent hereunder.


 


9.     ESCROW AGENT’S FEES.   There will be no fees charged by the Escrow
Agent for the administration and execution of this agreement.


 


10.  NOTICE.  All notices,
certificates, requests, demands and other communications or deliveries
hereunder shall be in writing and shall be sufficiently given and shall be
deemed given when delivered, postage prepaid, addressed as follows by Certified
Mail (or other means, if unanimously agreed to by the parties in writing):


 


	
  To the Escrow Agent:

  	
  Attention: Alex Shuford

  
	
   

  	
  South Carolina Bank and Trust

  
	
   

  	
  Post Office Box 1030

  
	
   

  	
  Columbia, SC 29202

  
	
   

  	
   

  
	
  To the Investors:

  	
  To the persons named and at the Addresses listed in the Subscription
  Agreements

  
	
   

  	
   

  
	
  To Company:

  	
  Attention: Holly L. Schreiber, CFO

  
	
   

  	
  Coastal Carolina Bancshares, Inc.

  
	
   

  	
  Post Office Box 2969

  
	
   

  	
  Myrtle Beach, SC 29578

  



 


Any party may, by notice given hereunder, designate any future or
different addresses to which subsequent notices, certificates, and other
communications shall be sent.


 


11.  REPRESENTATIONS OF THE COMPANY.  The Company hereby acknowledges that the
status of the Escrow Agent with respect to the offering of the Shares is that
of agent only for the limited purposes herein set forth, and hereby agrees it
will not represent or imply that the Escrow Agent, by serving as the Escrow
Agent hereunder or otherwise, has investigated the desirability or advisability
of an investment in the Shares, or has approved, endorsed or passed upon the merits
of the Shares, nor shall the Company use the name of the Escrow Agent in any
manner whatsoever in connection with the offer or sale of the Shares, other
than in the Company’s registration statement and related prospectus by
acknowledgment that the Escrow Agent has agreed to serve as Escrow Agent for
the limited purposes herein set forth.


 


12.  ENTIRE AGREEMENT.  This Agreement sets forth the entire
agreement and understanding of the parties with regard to the escrow
transaction and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof.  The parties hereto acknowledge that it is
currently contemplated that the Company will engage a sales agent to assist in
the Offering and agree to amend this Agreement as necessary to comply with any
requirements for this Agreement 


 


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imposed by the National Association of
Securities Dealers as a result of the subsequent engagement.


 


13.  AMENDMENT.  This Agreement may be amended, modified,
superseded or canceled, and any of the terms or conditions hereof may be
waived, only by a written instrument executed by each party hereto or, in the
case of a waiver, by the party waiving compliance.  The failure of any party at any time or times
to require performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. 
No waiver in any one or more instances by any party of any condition, or
of the breach of any term contained in this Agreement, whether by conduct or
otherwise, shall be deemed to be, or construed as, a further or continuing
waiver of any such condition or breach, or a waiver of any other condition or
of the breach of any other terms of this Agreement.


 


14.  BINDING EFFECT.  This Agreement
shall inure to the benefit of and shall be binding upon the parties hereto and
their respective heirs, executors, successors, administrators and assigns.  The Escrow Agent shall be bound only by the
terms of this Agreement and shall not be bound by or incur any liability with
respect to any other agreement or understanding between the parties with
respect to the subject matter hereof except as herein expressly provided herein.  The Escrow Agent shall not have any duties
hereunder except those specifically set forth herein.


 


15.  ASSIGNMENT.  No interest of any party to this Agreement
shall be assignable in the absence of a written agreement by and between the
parties to this Agreement, executed with the same formalities as this original
Agreement.


 


16.  SEVERABILITY.  In the
event any court of competent jurisdiction shall hold any provision of this
Agreement invalid or unenforceable, such holding shall not invalidate or render
unenforceable any other provision hereof.


 


17.  EXECUTION OF COUNTERPARTS.  This
Agreement may be executed in several counterparts, each of which shall be an
original, and all of which shall constitute one and the same instrument.


 


18.  APPLICABLE LAW.  This
Agreement shall be construed and governed exclusively by the laws of the State
of South Carolina, without regard to its principles of conflicts of law.


 


19.  HEADINGS.  The headings
used in this Agreement have been prepared for the convenience of reference only
and shall not control, affect the meaning of, or be taken as an interpretation
of any provisions of this Agreement.


 


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IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the date first
written above.


 


 


	
   

  	
  ESCROW AGENT: SOUTH CAROLINA BANK AND 

  TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
               s/
  Alex Shuford

  
	
   

  	
               Alex
  Shuford, Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY:    COASTAL
  CAROLINA BANCSHARES, 

  INC

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
               s/
  Holly L. Schreiber

  
	
   

  	
               Holly
  L. Schreiber, Chief Financial Officer

  



 


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