Exhibit 4.4
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is dated as of the date set forth below,
by and between, Illinois River Energy, LLC (the "Company"), U.S. Bancorp Xxxxx
Xxxxxxx, Inc. (the "Underwriter") and First Midwest Bank (the "Escrow Agent").
(The "Escrow Agent," the "Underwriter" and the "Company" may also be hereinafter
referred to as the "Parties").
RECITALS
A. The Company desires to establish an escrow account with the Escrow
Agent into which certain monies and documents will be deposited and held in
escrow until a minimum of $25,000,000 has been raised in connection with the
Company's public offering (the "Offering") of its Class A and Class B Units (the
"Units").
B. The Company will retain the services of the Underwriter to assist
with the sale of the Units on a best efforts basis.
C. The Company and the Underwriter have agreed to provide for the
impoundment of the proceeds to be received from the sale of the Units.
D. First Midwest Bank hereby agrees to act as Escrow Agent, and the
Company and the Underwriter desire to retain First Midwest Bank as Escrow Agent
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. DEPOSITS: The Company shall deliver to the Escrow Agent all checks, drafts
and money orders ("Subscription Payments") and all Subscription Agreements
and other related documents ("Subscription Documents") received by the
Company from Subscribers in connection with the Offering. All Subscription
Payments shall be made payable to "FIRST MIDWEST BANK AS ESCROW AGENT FOR -
ILLINOIS RIVER ENERGY, LLC ESCROW."
ALL FUNDS DEPOSITED WITH THE ESCROW AGENT SHALL REMAIN THE PROPERTY OF THE
SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE
SUBJECT TO ANY LIEN OR CHARGE BY THE ESCROW AGENT OR THE UNDERWRITER OR BY
JUDGMENT OR CREDITORS' CLAIMS AGAINST THE COMPANY, THE ESCROW AGENT OR THE
UNDERWRITER UNTIL RELEASED TO THE COMPANY IN ACCORDANCE WITH SECTION 3
HEREOF.
2. INVESTMENT OF FUNDS: All Subscription Payments shall be cleared and
deposited by the Escrow Agent into an institutional Money Market Account
("Escrow Account"); provided that the Escrow Account must accrue interest
on a daily basis and allow for the immediate withdrawal of funds without
premium or penalty.
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3. DISBURSEMENT OF FUNDS:
a. TERMINATION OF THE OFFERING: If the Escrow Agent has not
received, on or before December 15, 2002, subject to extension by
the Company to March 31, 2003 ("Termination Date"), Subscription
Payments in the aggregate amount of at least $25,000,000, then
the Escrow Agent shall refund to Subscribers without interest,
all Subscription Payments held in the Escrow Account per written
instruction from the Company. Unless instructed otherwise, the
Escrow Agent shall release all Subscription Payments held in the
Escrow Account, and the corresponding Subscription Documents, to
each Subscriber respectively, at the address given by such
Subscriber in the Subscription Agreement. All disbursements by
the Escrow Agent pursuant to this Section shall be made by the
Escrow Agent's usual escrow checks and shall be mailed by first
class United States Postal Services mail, postage pre-paid, as
soon as practicable but not later than the third business day
after the Termination Date. All interest on funds held in the
Escrow Account shall be for the account of the Company and shall
be paid to the Company.
b. DISBURSEMENT OF 10% OF ESCROW FUNDS: If the Escrow Agent
receives, on or before the Termination Date, Subscription
Payments in an aggregate amount of not less than $25,000,000 and
written acceptance of each Subscriber's subscription by the
Company, then the Escrow Agent shall disburse, upon written
instruction from the Company, substantially in the form attached
hereto as Exhibit A, 10% of the Subscription Payments held in the
Escrow Account to the Company ("Initial Disbursement"). If the
Escrow Agent receives additional Subscription Payments after the
Initial Disbursement, the Escrow Agent shall deposit the
Subscription Payments into the Escrow Account and upon receiving
written instruction from the Company, substantially in the form
attached hereto as Exhibit A, shall disburse to the Company 10%
of all Subscription Payments received after the Initial
Disbursement. The Escrow Agent shall retain the remaining 90% of
all Subscription Payments in the Escrow Account to be disbursed
as set forth in Section 3(c) below.
c. DISBURSEMENT OF REMAINING 90% OF SUBSCRIPTION PAYMENTS: Upon
receipt by the Escrow Agent of written confirmation from the
Company that the Company has received an executed commitment
letter from a lender for the amount of debt financing that the
Company determines necessary ("Commitment Letter Notice"), the
Escrow Agent shall disburse to the Company, pursuant to written
instruction from the Company, substantially in the form attached
hereto as Exhibit A, the remaining 90% of the Subscription
Payments remaining in the Escrow Account in immediately available
funds ("90% Disbursement"). If the Escrow Agent receives
additional Subscription Payments after the 90% Disbursement, then
the Escrow Agent shall disburse the Subscription Payments to the
Company upon written instruction from the Company, substantially
in the Form attached hereto as Exhibit A. If the Escrow Agent
does not receive the Commitment Letter Notice from the Company by
the Termination Date, then the Escrow Agent shall refund to
Subscribers without interest, the remaining 90% of each
Subscriber's Subscription
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Payment per written instruction from the Company. The Escrow
Agent shall also disburse to the Company all interest on funds
held in the Escrow Account.
d. REJECTION OF SUBSCRIPTION OR TERMINATION OF OFFERING: No later
than 10 days after receipt by Escrow Agent of written notice (i)
from the Company that the Company intends to reject a
Subscriber's subscription, or (ii) from the Company that it is
terminating the Offering, Escrow Agent shall pay to the
Subscribers the amount of Subscription Payment held in the Escrow
Account for each subscriber without interest or deduction. All
interest on funds held in the Escrow Account shall be for the
account of the Company and shall be paid to the Company.
4. COLLECTED FUNDS: No Subscription Payment shall be disbursed pursuant to
Section 3 until such Subscription Payment has been received by the Escrow
Agent in immediately available funds.
5. LIABILITY OF ESCROW AGENT: In performing its duties under the Agreement,
the Escrow Agent shall not be liable to the Company, any Subscriber, or any
Party for damages, losses, or expenses, except for gross negligence or
willful misconduct on the part of the Escrow Agent. The Escrow Agent shall
not incur any such liability for (I) any act or failure to act made or
omitted in good faith, or (II) any action taken or omitted in reliance upon
any instrument, including any written statement or affidavit provided for
in this Agreement that the Escrow Agent shall in good faith believe to be
genuine, nor will the Escrow Agent be liable or responsible for forgeries,
fraud, impersonations, or determining or verifying the scope of any
person's authority acting or purporting to act on behalf of any party to
this Agreement. In addition, the Escrow Agent may consult with legal
counsel in connection with the Escrow Agent's duties under this Agreement
and shall be fully protected in any action taken, suffered, or permitted by
it in good faith in accordance with the advice of counsel.
6. FEES AND EXPENSES: It is understood that the fees and usual charges set
forth on Schedule I attached to this Agreement for services of the Escrow
Agent shall be considered compensation for ordinary services as
contemplated by this Agreement. In the event that the conditions of this
Agreement are not promptly fulfilled, or if the Escrow Agent renders any
service not provided for in this Agreement, or if the Company requests a
substantial modification of its terms, or if any controversy arises, or if
the Escrow Agent is made a party to, or intervenes in, any litigation
pertaining to this escrow or its subject matter, the Escrow Agent shall be
reasonably compensated for such extraordinary services and reimbursed for
all costs, attorney's fees, including allocated costs of in-house counsel,
and expenses occasioned by such default, delay, controversy or litigation,
and the Escrow Agent shall have the right to retain all documents and/or
things of value at any time held by the Escrow Agent in this escrow until
such compensation, fees, costs and expenses are paid. The Company promises
to pay these sums upon demand. Unless otherwise provided, the Company will
pay
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all of the Escrow Agent's usual charges and the Escrow Agent may deduct
such sums from the funds deposited in the Escrow Account if the funds are
to be disbursed to the Company.
7. CONTROVERSIES: If any controversy arises between the Parties to this
Agreement, or with any other party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required
to determine the controversy or to take any action regarding it. The Escrow
Agent may hold all documents and funds and may wait for settlement of any
such controversy by final appropriate legal proceedings or other means, as
the Escrow Agent, in its discretion may deem appropriate, despite what may
be set forth elsewhere in this Agreement. In such event, the Escrow Agent
will not be liable for interest or damage. Furthermore, the Escrow Agent
may, at its option, file an action of interpleader requiring the parties to
answer and litigate any claims and rights among themselves. The Escrow
Agent is authorized to deposit with the clerk of the court all documents
and funds held in escrow, less any interest on funds held in the Escrow
Account to be applied against all costs, expenses, charges and reasonable
attorney fees incurred by the Escrow Agent due to the interpleader action
and which the Company agrees to pay. Upon initiating such action, the
Escrow Agent shall be fully released, and discharged of and from, all
obligations and liability imposed by the terms of this Agreement.
8. INDEMNIFICATION OF ESCROW AGENT: The Company and its successors and assigns
agree jointly and severally to indemnify and hold the Escrow Agent harmless
against any and all losses, claims, damages, liabilities, and expenses,
including reasonable costs of investigation, counsel fees, including
allocated costs of in-house counsel and disbursements that may be imposed
on the Escrow Agent or incurred by the Escrow Agent in connection with the
performance of its duties under this Agreement, including but not limited
to any litigation arising from this Agreement or involving its subject
matter, except to the extent such action, loss, claim, damage, liability,
or expense results from or is caused by the willful misconduct or gross
negligence of the Escrow Agent.
9. RESIGNATION OF ESCROW AGENT: The Escrow Agent may resign at any time upon
giving at least thirty (30) days written notice to the Company, provided,
however, that no such resignation shall become effective until the
appointment of a successor escrow agent, which shall be accomplished as
follows: The Company shall use its best efforts to obtain a successor
escrow agent within thirty (30) days after receiving such notice. If the
Company fails to agree upon a successor escrow agent within such time, the
Escrow Agent shall have the right to appoint a successor escrow agent. The
successor escrow agent shall execute and deliver an instrument accepting
such appointment and it shall, without further acts, be vested with all the
estates, properties, rights, powers, and duties of the predecessor escrow
agent as if originally named as escrow agent. The Escrow Agent shall
thereupon be discharged from any further duties and liability under this
Agreement.
10. AUTOMATIC SUCCESSION: Upon the Company's and the Underwriter's consent, any
company into which the Escrow Agent may be merged or with which it may be
consolidated,
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or any company to whom the Escrow Agent may transfer a substantial amount
of its global escrow business, shall be the Successor to the Escrow Agent
without the execution or filing of any paper or any further act on the part
of any of the Parties, anything herein to the contrary notwithstanding. The
Successor Escrow Agent shall be vested with all the estates, properties,
rights, powers, and duties of the Escrow Agent as if originally named as
escrow agent.
11. TERMINATION: The offering period for this escrow shall terminate on the
Termination Date. Upon termination of the offering period, the Escrow Agent
shall disburse the funds in the Escrow Account in the manner and upon the
terms directed in paragraph 3 hereof. The Company may, in its sole
discretion, terminate the Offering and abandon the sale of the Units at any
time prior to the Termination Date.
12. MISCELLANEOUS:
a. GOVERNING LAWS: This Agreement is to be construed and interpreted
according to Illinois law.
b. TRUST POWERS: The Escrow Agent hereby represents to the Company
that the Escrow Agent has all necessary trust powers and
authority to act as escrow agent as set forth in this Agreement.
c. COUNTERPART: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute on and the same instrument.
d. NOTICES: All instructions, notices and demands herein provided
for shall be in writing and shall be mailed postage prepaid,
first class mail, delivered by courier, or telecopied as follows:
If to the Company: If to the Escrow Agent:
Illinois River Energy, LLC First Midwest Bank
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000 0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxx, XX 00000
Telephone No:(000) 000-0000 Telephone No: (000) 000-0000
Telecopier No: (000) 000-0000 Telecopier No: (000) 000-0000
If to the Underwriter:
U.S. Bancorp Xxxxx Xxxxxxx Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
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Telephone No: (000) 000-0000
Telecopier No: (000) 000-0000
e. AMENDMENTS: This Agreement may be amended by written notice
signed by the Company, except that Section 6 through Section 12
may be amended only with the consent of the Escrow Agent.
f. BINDING AGREEMENT AND SUBSTITUTION OF ESCROW AGENT: The terms and
conditions of this Escrow Agreement shall be binding on the
heirs, executors and assigns, creditors or transferees, or
successors in interest, whether by operation of law or otherwise,
of the Parties hereto. If, for any reason, the Escrow Agent named
herein is unable or unwilling to continue to act, then the
Company, at its sole discretion, may substitute another escrow
agent.
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The Company represents and agrees that it has not made, nor will it make in the
future, any representation that states or implies that the Escrow Agent has
endorsed, recommended or guaranteed the purchase, value, or repayment of the
Securities offered for sale by the Company. The Company further agrees that it
will insert in any prospectus, offering circular, advertisement, subscription
agreement or other document made available to prospective purchasers of the
Securities, the following statement in bold face type: "First Midwest Bank is
acting only as an escrow agent in connection with the Offering described herein,
and has not endorsed, recommended or guaranteed the purchase or value of any of
the units subscribed," and will furnish to the Escrow Agent a copy of each such
prospectus, offering circular, advertisement, subscription agreement or other
document at least 5 business days prior to its distribution to prospective
Subscribers.
THE UNDERSIGNED ACKNOWLEDGE THAT FIRST MIDWEST BANK IS ACTING ONLY AS AN ESCROW
AGENT IN CONNECTION WITH THE OFFERING OF THE SECURITIES DESCRIBED HEREIN, AND
HAS NOT ENDORSED, RECOMMENDED OR GUARANTEED THE PURCHASE OR VALUE OF SUCH
SECURITIES.
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The Parties have executed this Agreement as of the last date set forth
below.
ILLINOIS RIVER ENERGY, LLC: FIRST MIDWEST BANK:
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Print Name: Xxxxx Xxxxxxx Print Name: Xxxxxx Xxxxxxxx
-------------------- --------------------
Date: 9-11-02 Date: 9-17-02
-------------------------- --------------------------
U.S. BANCORP XXXXX XXXXXXX INC.:
By: /s/ Xxxx X. Xxxxxx
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Print Name: Xxxx X. Xxxxxx
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Date: 9-11-02
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SCHEDULE I
FEES AND CHARGES
No fees will be charged by First Midwest for ordinary escrow services.
EXHIBIT A
FUND DISBURSEMENT INSTRUCTIONS
The undersigned certifies that he, she or it is duly authorized to
execute and deliver this Escrow Notice on behalf of Illinois River Energy,
LLC (the "Company"). Pursuant to the Escrow Agreement dated ____________, 2002
(the "Escrow Agreement") by and among the Company, the Underwriter and
First Midwest Bank (the "Escrow Agent"), the Company hereby request that the
Escrow Agent remit, in immediately available funds, $_____________ from the
Escrow Account to the following parties as follows:
PARTY AMOUNT
----- ------
$
$
TOTAL $
IN WITNESS WHEREOF, the undersigned have executed this Fund
Disbursement Instruction as of the date set forth below.
ILLINOIS RIVER ENERGY, LLC
Dated: By:
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Its:
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