ESCROW AGREEMENT
EXHIBIT
99.1
ESCROW
AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”) is by and between
Show Me Ethanol, LLC (the “Company”) and the State Bank
of Xxxxxx (“Escrow
Agent”), and is executed and delivered as of January 26,
2009.
Recitals
WHEREAS,
various members of the Company are making additional capital contribution
investments in the Company (each an “Investor” and collectively,
the “Investors”);
and
WHEREAS,
the Company is simultaneously (a) accepting the Investors’ additional
capital contributions, (b) executing certain amendments with Xxx-Xxxxxxx
County Grain Growers, Inc. (“Xxx-Xxxxxxx”) to existing corn
supply agreements or making other arrangements mutually acceptable to the
Company and Xxx-Xxxxxxx (the “Contract Amendments”) and
(c) executing certain amendments to the Company’s current term and
revolving loan agreements (the “Loan Amendments”) with FCS
Financial, PCA (“FCS”);
and
WHEREAS,
each Investor’s additional capital contribution is to be placed in escrow until
such time as such additional capital contribution is to be remitted by the
Escrow Agent to the Company, or the capital contribution is terminated for
failure to satisfy the necessary conditions to closing on or before March 31,
2009 and is to be returned by the Escrow Agent to such Investor, all as
hereinafter provided;
Agreements
NOW,
THEREFORE, in consideration of the premises and the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Appointment and Agreement of
Escrow Agent. The Company hereby appoints and designates the
Escrow Agent as escrow agent for the purposes set forth herein, and the Escrow
Agent hereby accepts such appointment under the terms and conditions set forth
herein.
2. Escrow.
2.1 Escrow Deposit;
Purpose. It is anticipated that the Investors will be making
additional investments to the Company in the form of additional capital
contributions. The Escrow Agent will hold the capital contribution
funds that are delivered to Escrow Agent (the “Escrow Funds”) for the sole
purpose of delivering the Escrow Funds to the Company or returning the Escrow
Funds to the Investors, all as hereinafter provided. Either the
Company on behalf of an Investor, or Investors directly, may send or deliver
funds to the Escrow Agent to be held as Escrow Funds. No portion of
the Escrow Funds will be subject to any lien, attachment, or any other judicial
process of any creditor of any party hereto. The Escrow Agent also
agrees to provide the Company within a reasonable time electronic copies or
faxes of any Letter of Representations from Investors that may be sent to the
Escrow Agent. The executed original of such Letter of Representations
shall be mailed to the Company at the address provided in Section 6.1 upon
the request of the Company.
2.2 The
Account. The Escrow Agent will establish a single non-interest
bearing account that shall be in the sole name of the Escrow Agent, in its
capacity as escrow agent under this Agreement (the “Account”), into which the
Escrow Funds will be deposited until distributed or returned as herein set
forth. At no time while any of the Escrow Funds are held by the
Escrow Agent under the terms of this Agreement shall the Company have any
ownership interest of any kind (whether legal, beneficial or otherwise) in the
Account or any of the Escrow Funds.
2.3 Proper Endorsement of Escrow
Funds; Collected Funds. Escrow Agent shall have no duty to
accept or deposit any of the Escrow Funds into the Account except Escrow Funds
that are delivered to Escrow Agent and that are either made payable to Escrow
Agent or made payable to the Company but properly endorsed by the
Company in favor of Escrow Agent. In addition, Escrow Agent shall be
entitled to place a hold on any Escrow Funds that are deposited in the Account
until such time as such funds have been collected and constitute collected funds
on the records of the Escrow Agent.
2.4 Limited Statement and
Reporting Obligations. Escrow Agent shall have no duty to file
or render any tax forms or other reports or statements with respect to the
Account or the Escrow Funds other than any statements reflecting the receipt and
disbursement of Escrow Funds, a copy of which statements shall be delivered by
Escrow Agent to Company upon written request given by the Company to Escrow
Agent.
3. Distributions of the Escrow
Funds. The Escrow Funds shall be distributed as
follows:
3.1 The
Escrow Agent shall return the Escrow Funds to each Investor (in the amount given
by such Investor to Escrow Agent or by the Company on behalf of such Investor to
Escrow Agent) as promptly as reasonably possible on or after April 1, 2009
if the Escrow Agent has not disbursed the Escrow Funds to the Company on a date
prior to April 1, 2009 as hereinafter provided.
3.2 After
the Escrow Funds have been disbursed to the Company pursuant to Section 3.4
below, any additional checks or funds received by the Escrow Agent from
Investors that are intended to constitute additional capital contributions to
the Company and that were to have been received prior to April 1, 2009 shall be
promptly remitted to the Company.
3.3 If
the Company does not receive an executed Letter of Representation from an
Investor, then in the Company’s sole discretion, the Company may give written
instructions to the Escrow Agent (which written instructions must be received by
the Escrow Agent prior to the Escrow Agent’s disbursement of any of the Escrow
Funds to the Company) to return to the Investor the amount of the Escrow Funds
contributed by such Investor. In connection with remitting or
returning any monies under this Agreement to any Investor (and whether such
remittance or return of monies is made under this Section 3.3 or any other
Section of this Agreement), Escrow Agent shall be entitled to remit or return
such monies to such payee that constitutes an Investor as are reflected on
Escrow Agent’s books and records without making any further inquiry or
investigation of the facts as to whether such books and records are current or
correct.
3.4 The
Escrow Agent shall disburse the Escrow Funds to the Company (pursuant to the
Company’s written instructions that are provided to the Escrow Agent prior to
such disbursement) upon the Escrow Agent having received on or prior to March
31, 2009, three (3) certificates, each substantially as attached hereto as
Exhibit A, Exhibit B and Exhibit C. A complete Exhibit A shall be
executed and provided by FCS in connection with the closing of the Loan
Amendments. A complete Exhibit B shall be executed and provided by
the Company. Exhibit C shall be executed and provided by Xxx-Xxxxxxx
in connection with the closing of the Contract Amendments.
4. Term. This
Agreement will continue in full force and effect until such time as all of the
Escrow Funds have been distributed or returned as provided under this
Agreement.
5. The Escrow
Agent.
5.1 Indemnification of the
Escrow Agent. The Company agrees to indemnify and hold the
Escrow Agent harmless from and against any and all costs, charges, damages, and
reasonable attorneys’ fees which the Escrow Agent in good faith may incur or
suffer in connection with or arising out of this Agreement (other than costs,
charges, damages or attorneys’ fees arising out of any act or omission of the
Escrow Agent constituting gross negligence or willful
misconduct). The terms and obligations of this Section shall survive
the termination of this Agreement, the payment of all amounts hereunder and the
resignation, removal or replacement of the Escrow Agent.
5.2 Duties of the Escrow
Agent. The Escrow Agent will have no duties other than those
expressly imposed on it under this Agreement and will not be liable for any act
or omission except for its own gross negligence or willful
misconduct. The Escrow Agent shall under no circumstance be deemed a
fiduciary for any of the Investors, FCS, Xxx-Xxxxxxx or the
Company. The Escrow Agent may act upon any instrument, certificate or
other writing that it believes in good faith to be genuine and to be signed or
presented by the proper person or persons. The Escrow Agent may
consult with counsel of its own choice and will be fully protected for any
action taken by it hereunder in good faith and in accordance with the advice of
such counsel. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits).
In the
event that (a) any dispute shall arise between any of the Escrow Agent,
Company, Investors, Xxx-Xxxxxxx or FCS with respect to the disposition,
disbursement or ownership of any of the Escrow Funds held hereunder or
(b) the Escrow Agent shall be uncertain as to how to proceed in a situation
not explicitly addressed by the terms of this Agreement whether because of
conflicting demands by the Investors, FCS, Xxx-Xxxxxxx or the Company or
otherwise, or as the result of any bankruptcy of the Company, the Escrow Agent
shall be entitled to refrain from taking any action and may retain the Escrow
Funds, without liability to anyone, until the Escrow Agent shall have received
(i) joint written instructions of the Company, each of the Investors,
Xxx-Xxxxxxx, or FCS as the Escrow Agent may reasonably require, directing the
disposition of the Escrow Funds or adequately resolving the uncertainty or
(ii) a final non-appealable order of a court of competent jurisdiction
directing the disposition of the Escrow Funds or adequately resolving the
uncertainty along with, if the Escrow Agent shall so require in its sole
discretion, a written certification from the Company that such order is final,
non-appealable and from a court of competent jurisdiction. In the
alternative, upon a dispute or uncertainty pursuant to clause (a) or (b) above,
the Escrow Agent may, at its sole option, deposit the Escrow Funds with a court
of competent jurisdiction and thereupon have no further duties or obligations in
connection therewith or under this Agreement.
5.3 Fees of the Escrow
Agent. The Company shall unconditionally pay the Escrow Agent
a non-refundable fee of $10,000 upon the execution of this Agreement by the
Company, and the entire amount of such fee shall be deemed to be fully-earned as
of the date of receipt of such payment by the Escrow Agent. In the
event that the Escrow Funds are disbursed by the Escrow Agent in the manner
outlined in Section 3.4 above, and provided that the Escrow Agent shall not have
been earlier terminated, removed or replaced as the escrow agent under this
Agreement and shall not have resigned under this Agreement earlier than the
first to occur of the bankruptcy of the Company or April 15, 2009, then the
Escrow Agent shall be obligated to pay the Company a sum equal to
$3,500. The Company shall reimburse Escrow Agent for all costs and
expenses, including, without limitation, legal expenses and attorneys’ fees,
incurred by the Escrow Agent in connection with the preparation of this
Agreement.
5.4 Replacement of Escrow Agent;
Resignation of Escrow Agent. The Company may replace Escrow
Agent as an Escrow Agent at any time and from time to time by giving written
notice to the Escrow Agent of such termination. In the event that the
Escrow Agent is replaced, then Escrow Agent shall have no further duties or
obligations under this Agreement other than to remit the Escrow Funds to the
replacement escrow agent selected by the Company. Notwithstanding any
provision of this Agreement to the contrary, at any time from and after the
earlier to occur of the bankruptcy of the Company or April 15, 2009, and
assuming that the Escrow Funds have not been earlier remitted to the Company or
returned to the Investors as required under this Agreement, the Escrow Agent may
resign from serving as the escrow agent under this Agreement by remitting the
remaining Escrow Funds then in possession of Escrow Agent to a court of
competent jurisdiction and providing written notice to the
Company. Upon such a resignation the Escrow Agent shall have no
further duties or obligations in connection therewith or under this
Agreement.
6. Miscellaneous.
6.1 Notices. All
notices and other communications hereunder will be in writing and will be
sufficiently given if made by hand delivery, by telex, by telecopier, or by
registered or certified mail (postage prepaid and return receipt requested) to
the parties at the following addresses (or at such other address for a party as
will be specified by it by like notice), provided that
communications given to the Escrow Agent will be considered given when received
by the Escrow Agent and, provided, further, that any
distributions from the Escrow Funds based upon communications to the Escrow
Agent directing it to make a distribution or payment from the Escrow Funds will
be made by the Escrow Agent only upon receipt of executed copies of such
communication:
(a) Company:
Attn: General
Manager
P. O. Box
9, 00000 X. Xxxxxxx 00
Xxxxxxxxxx,
Xxxxxxxx 00000
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with
a copy to:
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Xxxx X.
Xxxxxxx
Xxxxx
Cave LLP
One
Kansas City Place
0000 Xxxx
Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, XX 00000-0000
Telephone: (000)
000-0000
Fax: (000)
000-0000
(b) Escrow
Agent:
State
Bank of Slater
000 Xxxx
Xxxxx Xxxxxx
Xxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxxx
X. “Bud” Xxxxxxx
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with
a copy to:
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Xxxxx X.
Xxxxxxxx
Xxxxxxxxxx
Xxxxxxx Xxxxxxxx Suelthaus PC
000 Xxxx
00xx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
6.2 Benefit and
Assignment. The rights and obligations of each party under
this Agreement may not be assigned without the prior written consent of all
other parties. This Agreement will be binding upon and inure to the
benefit of the Company and Escrow Agent and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied,
is intended to or will (a) confer on any person or entity (including, without
limitation, any of the Investors, FCS or Xxx-Xxxxxxx) other than the Company and
Escrow Agent, or their respective successors or permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, or
(b) constitute the Company and Escrow Agent as partners or participants in a
joint venture. The Escrow Agent will not be obligated to recognize
any such succession or assignment until it receives satisfactory written
evidence thereof. No party other than the Company and Escrow Agent
shall be entitled to rely upon any term or provision of this Agreement, and no
such other party shall in any manner be deemed to be in privity with the Escrow
Agent as the result of this Agreement.
6.3 Entire Agreement;
Amendment. This Agreement contains all the terms agreed upon
by the parties with respect to the subject matter hereof. This
Agreement may be amended only by a written instrument signed by the Company and
Escrow Agent.
6.4 Headings. The
headings of the sections and subsections of this Agreement are for ease of
reference only and will not be deemed to evidence or affect the meaning or
construction of any of the provisions hereof.
6.5 Governing
Law. This Agreement will be construed, as to both validity and
performance, and enforced in accordance with and interpreted and governed by the
laws of the State of Missouri, without giving effect to its conflict of laws
principles.
6.6 Counterparts. This
Agreement may be executed in multiple counterparts, all of which taken together
will constitute one instrument. A photocopied, telecopied or other electronic
signature of Company or Escrow Agent to this Agreement shall have the same force
and effect as an original signature.
6.7 Time of the
Essence. Time is of the essence of all provisions of this
Agreement.
[Remainder
of page intentionally left blank. Signature page
follows.]
Signature
Page
to
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
effective as of the date first written above.
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State
Bank of Xxxxxx,
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as
Escrow Agent
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By:
/s/Xxxxxxx X. “Xxx”
Xxxxxxx
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Title:_____________________________
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as
the Company
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By:
/s/Xxxxxx
Alt
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Title:
General
Manager
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Exhibit
A
[FORM
OF]
CLOSING
CERTIFICATE
FROM FCS
FINANCIAL, PCA
I,
[INSERT NAME], an authorized signatory of FCS Financial, PCA, in connection with
the execution of certain amendments to the existing term and revolving loan
agreements (the “Loan
Amendments”) between the required lenders (including FCS Financial, PCA)
and Show Me Ethanol, LLC, certify that the Loan Amendments have either been
executed or that all necessary conditions to effectiveness of the Loan
Amendments are satisfied or waived (other than disbursement of the Escrow Funds
under the Escrow Agreement between the State Bank of Xxxxxx and Show Me Ethanol,
LLC) and hereby instruct the State Bank of Xxxxxx as Escrow Agent to disburse
the Escrow Funds to Show Me Ethanol, LLC in accordance with the terms of the
Escrow Agreement.
| FCS FINANCIAL, PCA | |
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By:_____________________________
Name:__________________________
Title:___________________________
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Exhibit
B
[FORM
OF]
CLOSING
CERTIFICATE FROM
I, Xxxxxx
X. Alt, General Manager and an authorized signatory of Show Me Ethanol, LLC,
hereby instruct the State Bank of Xxxxxx as Escrow Agent to disburse the Escrow
Funds to Show Me Ethanol, LLC in accordance with the terms of the Escrow
Agreement.
| SHOW ME ETHANOL, LLC | |
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By:
Name: Xxxxxx
X. Alt
Title: General
Manager
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Exhibit
C
[FORM
OF]
CLOSING
CERTIFICATE FROM
XXX-XXXXXXX
COUNTY GRAIN GROWERS, INC.
I, Xxxx
Xxxxxxxx, General Manager and an authorized signatory of Xxx-Xxxxxxx County
Grain Growers, Inc., certify that all documents relating to the Contract
Amendments have either been executed or that all necessary conditions to
effectiveness of the Contract Amendments documents are satisfied or waived
(other than disbursement of the Escrow Funds under the Escrow Agreement between
State Bank of Xxxxxx and Show Me Ethanol, LLC) and hereby instruct the State
Bank of Xxxxxx as Escrow Agent to disburse the Escrow Funds to Show Me Ethanol,
LLC in accordance with the terms of the Escrow Agreement.
| XXX-XXXXXXX COUNTY GRAIN GROWERS, INC. | |
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By:
Name: Xxxx
Xxxxxxxx
Title: General
Manager
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