EXHIBIT 99.2
ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into as of the ____ day of
____________, 2003, by and among CITIZENS FIRST CORPORATION, a Kentucky
corporation (the "Corporation"), BANK ONE TRUST COMPANY, a Kentucky corporation,
(the "Escrow Agent") and ▇▇▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS, LLC, a Kentucky limited
liability company (the "Marketing Agent").
WITNESSETH:
WHEREAS, the Corporation proposes to offer (the "Offering") and sell
through the Marketing Agent shares (the "Shares") of Common Stock of the
Corporation at an approximate price of $_______ per Share; and
WHEREAS, the subscribers to such Shares (the "Subscribers") will execute a
Subscription Agreement, a copy of which is attached hereto as Exhibit A, and
such agreement provides that the subscription funds (the "Subscription Amounts")
received from the Subscribers for the Shares shall be held in escrow until
acceptance of such subscriptions by the Corporation, at its discretion.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements herein set forth, and in consideration of the purchase
of the Shares by the Subscribers, do hereby covenant and agree as follows:
1. The Corporation hereby appoints the Escrow Agent to serve as the escrow
agent for the Offering and the Escrow Agent agrees to serve in that
capacity, pursuant to the terms of this Escrow Agreement.
2. The Escrow Agent shall at times maintain a record of all subscriptions
and amounts deposited in escrow (such amount being hereinafter referred
to as the "Escrow Fund"). Such records and accounts shall be available at
all times for inspection, examination and reproduction by the Corporation
and/or the Marketing Agent. At the close of business on Friday of each
week during the term of this Agreement, the Escrow Agent shall prepare
and deliver to the Corporation and the Marketing Agent a list of all
Subscribers and the amount of funds received by the Escrow Agent by 12
noon (E.S./D.S.T. of such date). The list shall be sorted by alphabetical
order of the last name of the Subscriber, shall reflect the date on which
the checks or other payments were received by the Escrow Agent, shall
reflect the amount of the investment, and shall indicate the current
total amount of investment by all Subscribers. In the event there has
been no change from the previous week, the Escrow Agent shall submit a
report so indicating. The Escrow Agent shall send to the Marketing Agent
a duplicate of all reports made to the Corporation under this paragraph.
3. All Subscription Amounts delivered to the Escrow Agent shall be deposited
in a special trust account, and shall be invested by the Escrow Agent, at
the written direction of the Corporation, as soon as practicable after
the clearance of the Subscriber's check or the availability of good funds
from the Subscriber, in short-term United States government securities,
FDIC-insured bank deposits, or other such investments as the Corporation
shall determine, provided that such other investments shall be
investments permissible under Rule 15c2-4 under the Securities Exchange
Act of 1934, but not in corporate equity or debt securities, banker's
acceptances, commercial paper, municipal securities, money market funds,
or non-United States government repurchase agreements. All interest and
other sums earned on the Escrow Fund shall be treated by the Escrow Agent
as part of the Escrow Fund, subject to the terms and conditions of this
Agreement, and shall be paid to the Corporation upon the distribution or
return of the Escrow Fund.
The Escrow Fund shall be invested only as permissible under Rule 15c2-4
of the Securities Exchange Act of 1934. The principal from the Escrow
Fund shall not be at risk and liquidity shall be maintained at all times
in accordance with SEC Rule 15c2-4 and NASD Notice to Members 84-7.
4. If the Corporation at any time during the term of the Offering directs
the Escrow Agent in writing to return to any Subscriber amounts in the
Escrow Fund provided by that Subscriber, the Escrow Agent shall remit to
such Subscriber the amount delivered by the Marketing Agent on such
Subscriber's behalf, without interest from the Escrow Fund. The Escrow
Agent shall not be required to distribute such funds unless the
Corporation's instructions include the name and address of the
Subscriber, and the date that the funds were delivered to the Escrow
Agent. If the Escrow Agent returns any amounts to the Subscribers, a fee
of $____ per subscriber shall be charged. Funds returned to the
Subscriber(s) shall be paid directly to each/the Subscriber(s), and not
through the Corporation.
5. The Escrow Fund shall be released by the Escrow Agent to the Corporation
only when the Marketing Agent has delivered a certificate to the Escrow
Agent stating that all closing conditions under the Sales Agency
Agreement between the Marketing Agent and the Corporation (the "Sales
Agency Agreement") have been complied with or waived (the "Marketing
Agent's Certificate"). If more than one date is applicable for the
distribution of the Escrow Fund to the Corporation and the Marketing
Agent, the Marketing Agent shall be paid commissions, as proportionate to
the distribution and in accordance with the Sales Agency Agreement, on
each such date, subject to the terms and conditions contained in this
Agreement. Upon the receipt from time to time of the Marketing Agent's
Certificate and written instructions from the Corporation and the
Marketing Agent specifying the amount of the Escrow Fund to be paid to
the Marketing Agent as commissions and the net proceeds of the Offering
to be paid to the Corporation, in
accordance with the terms of the Sales Agency Agreement, the Escrow Agent
shall release the Escrow Fund as follows:
A. the Escrow Agent shall pay to the Marketing Agent the
commissions specified in the written instructions from the
Corporation and the Marketing Agent; and
B. the Escrow Agent shall pay to the Corporation the net
proceeds of the Offering, including any earnings on the
Escrow Fund.
In the event that the Escrow Agent does not receive the Marketing Agent's
Certificate or a written notice of extension of the Offering from the
Corporation or the Marketing Agent by the close of business on
___________, 2003, or in the event that the Corporation or the Marketing
Agent provides written notice of termination of the Offering prior to the
closing of the sale of the Shares in the Offering, the Escrow Agent shall
promptly liquidate the Escrow Fund and return the Escrow Fund, excluding
earnings thereon, to the Subscribers. In the event that the Offering is
extended but the Escrow Agent does not receive the Marketing Agent's
Certificate by the earlier of the expiration of the extended Offering or
________________, 2003, the Escrow Agent shall promptly liquidate the
Escrow Fund and return the Escrow Fund, excluding earnings thereon, to
the Subscribers. In the event that the Escrow Agent is required to return
the Escrow Fund to the Subscribers, the Escrow Agent shall return to each
Subscriber the amount delivered by the Marketing Agent on such
Subscriber's behalf, without interest. There shall be a fee of $_____ per
Subscriber. Any earnings remaining following termination of the Escrow
Fund shall be distributed to the Corporation upon termination of the
Escrow Fund.
6. It is understood and agreed that the Escrow Agent shall:
a) be under no duty to enforce payment of any check, draft, or other
document which is to be delivered to or held by it hereunder;
b) be protected in acting upon any notice, request, certificate, approval,
consent or other paper believed by it to be genuine and to be signed by
proper party or parties;
c) be indemnified by the Corporation against any claim made against it by
reason of its acting or failing to act in connection with any of the
transactions contemplated hereby and against any loss it may sustain in
carrying out the terms of this Agreement, including the reasonable fees
of counsel, except such claims or losses which arise out of or are
occasioned by its bad faith, gross negligence or misconduct, and such
indemnification shall survive the resignation or removal of the Escrow
Agent or termination of this Agreement;
d) be permitted to consult with counsel of its choice and the Escrow Agent
shall not be liable for any action taken, suffered or permitted by it in
accordance with the advise of such counsel; provided, however, that
nothing contained in this paragraph 6(d), nor any action taken by the
Escrow Agent, or suffered or omitted by it in accordance with the advice
of such counsel, shall relieve the Escrow Agent from liability for any
claim or losses which arise out of or are occasioned by its bad faith,
gross negligence or misconduct, all as provided in paragraph 6(c) hereof;
e) not be bound by any modification, amendment, termination, cancellation,
rescission or supersession of the Agreement, unless the same shall be in
writing and signed by all of the parties hereto;
f) be entitled to refrain from taking any action other than to keep all
funds deposited with it and documents held by it in escrow until it shall
be directed otherwise in writing by the Corporation and by the Marketing
Agent or by a final non-appealable order or judgment of a court of
competent jurisdiction, if it shall be uncertain concerning its duties or
rights hereunder or shall have received instructions, claims or demands
from the Corporation or Subscribers which, in its opinion, are in
conflict with any of the provisions of this Agreement;
g) have no liability for following the instructions herein contained or
expressly provided for, or written instructions given by the Corporation
and/or Marketing Agent;
h) have the right, at any time to resign hereunder by giving written notice
of its resignation to the Corporation and the Marketing Agent at least
thirty (30) days prior to the date specified for such resignation to take
effect and, upon the effective date of such resignation, all funds held
by the Escrow Agent shall be delivered by it to such person as may be
designated in writing by the Corporation and the Marketing Agent;
whereupon, the Escrow Agent's obligations hereunder shall cease and
terminate. If no such person has been so designated by such date, all
obligations of Escrow Agent shall nevertheless, cease and terminate. The
Escrow Agent's sole responsibility thereafter shall be to keep safely all
funds and documents then held by it and to deliver the same to a person
designated by the Corporation and Marketing Agent or in accordance with a
final order or judgment of a court of competent jurisdiction;
i) have no responsibility or liability for any diminution in value of any
assets held hereunder which may result from any investments or
reinvestment made in accordance with any provision which may be contained
herein;
j) be under no obligation to invest the deposited funds or the income
generated thereby until it has received a Form W-9 or W-8, as applicable,
from the Corporation regardless of whether such party is exempt from
reporting or
withholding requirements under the Internal Revenue Code of 1986, as
amended; and
k) have only those duties as are specifically provided herein, which shall
be deemed purely ministerial in nature, and shall under no circumstance
be deemed a fiduciary for any of the parties to this Agreement. The
Escrow Agent shall neither be responsible for, nor chargeable with,
knowledge of the terms and conditions of any other agreement, instrument
or document between the other parties hereto, in connection herewith,
including without limitation the Subscription Agreement. This Agreement
sets forth all matters pertinent to the escrow contemplated hereunder,
and no additional obligations of the Escrow Agent shall be inferred from
the terms of this Agreement or any other agreement. IN NO EVENT SHALL THE
ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i) DAMAGES OR
EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN
DAMAGES WHICH RESULT FROM THE ESCROW AGENT'S FAILURE TO ACT IN ACCORDANCE
WITH THE STANDARDS SET FORTH IN THIS AGREEMENT, OR (ii) SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
7. This Agreement expressly and exclusively sets forth the duties of the
Escrow Agent with respect to any and all matters pertinent hereto and no
implied duties or obligations shall be read into this Agreement against
the Escrow Agent. Upon release of the amounts in the Escrow Fund pursuant
to Paragraph 5, this Agreement shall terminate and the Escrow Agent shall
be released from all duties hereunder.
8. Unless and until the Escrow Funds are delivered to the Corporation under
Paragraph 5, it is specifically recognized and agreed that the
Corporation shall not have any right, title, or interest in such Escrow
Funds; it being the intention of the parties hereto that the Escrow Funds
shall not be subject to claims against the Corporation, or any affiliate
unless and until the Corporation issues Shares and contingencies are met,
as aforesaid, and this Agreement is terminated.
9. For its services as the Escrow Agent hereunder, the Corporation shall pay
to the Escrow Agent a fee of $_________. The Corporation also agrees to
be solely responsible for the payment of any additional fees charged by
the Escrow Agent contained herein, such as, but not limited to, the fee
to return funds to Subscribers. No fee paid by the Corporation to the
Escrow Agent shall be paid out of or chargeable to the funds on deposit
in the Escrow Account until such time as all contingencies have been met,
as herein indicated in this Agreement.
10. Any payments of income from this Agreement may be subject to withholding
regulations then in force with respect to United States taxes. The Escrow
Agent shall report to the Internal Revenue Service, as of each calendar
year-end, and to
the Corporation as applicable, all income earned from the investment of
any sum held in the Escrow Fund, as and to the extent required under the
provisions of the Internal Revenue Code of 1986,as amended, and the
regulations promulgated thereunder (the "Code").
11. This Agreement shall terminate on the completion of the directions
contained herein.
12. This Agreement may be amended at any time by a written document signed by
all parties hereto.
13. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original copy of this Agreement and all of
which, when taken together, shall be deemed to constitute one and the
same agreement.
14. This Agreement is being made in and is intended to be construed according
to the laws of the Commonwealth of Kentucky. It shall inure to and be
binding upon the parties hereto, their successors and assigns. The terms
of the Agreement shall commence with the date hereof and shall continue
until the Escrow Funds are disposed of under Paragraph 5.
15. Each party agrees to waive any argument of lack of personal jurisdiction
or forum non conveniens with respect to any claim or controversy arising
out of or relating to this Agreement and consents to the exclusive
jurisdiction of courts located in Jefferson County, Kentucky with respect
to all matters relating to or referred in this Agreement.
16. All notices, requests, demands and other communications hereunder, shall
be deemed to have been duly given if delivered or mailed, certified or
registered mail, with postage prepaid:
a) if to the Corporation:
Citizens First Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, President
b) if to the Escrow Agent:
Bank One Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c) if to the Marketing Agent:
▇▇▇▇▇▇▇▇▇▇▇ Capital Partners, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, III
or to other person and place as any party shall designate to the other in
writing.
17. Any banking association or bank into which the Escrow Agent may be
merged, converted or with which the Escrow Agent may be consolidated, or
any bank resulting from any merger, conversion or consolidation to which
the Escrow Agent shall be a party, or any banking association or bank to
which all or substantially all of the corporate trust business of the
Escrow Agent shall be transferred, shall succeed to all the Escrow
Agent's rights, obligations and immunities hereunder without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first herein above written.
CITIZENS FIRST CORPORATION
By:__________________________
Title:________________________
BANK ONE TRUST COMPANY
By:__________________________
Title:________________________
▇▇▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS, LLC
By: __________________________
Title:_________________________
