ESCROW AGREEMENT
Exhibit
10.32
THIS
ESCROW AGREEMENT (the "Agreement")
is made
and entered into on November 7, 2006, by and among Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP,
whose
address for notice is X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000, as escrow agent
(the "Escrow
Agent"),
Xethanol
Corporation,
whose
address for notice is as set forth in the Amended and Restated Asset Purchase
Agreement set forth below, as buyer (the “Buyer”),
and
Carolina
Fiberboard Corporation LLC,
whose
address for notice is Xxxxx Xxxxxx Xxxxxx, Xx., Esq., Xxxxxxxx & Saputo,
PLLC, 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, as sellers
(hereinafter, collectively and individually, the "Sellers").
On
this
date, Seller is selling to Buyer approximately 214 acres of land along with
improvements thereon commonly known as 000 Xxxxx Xxx Xxxxxxxx Xxxx, Xxxxxx
Xxxx,
Xxxxx Xxxxxxxx (the “Property”),
all
pursuant to an Amended and Restated Asset Purchase Agreement (the “APA”)
dated
same date herewith between Buyer, Seller and Xxxxxx Xxxxxx. Pursuant to Item
9
of the APA, Seller has agreed to reimburse Buyer for certain costs and expenses
related to environmental work to be performed by Buyer after Buyer’s purchase of
the Property, and as inducement to Buyer to proceed with the closing of the
purchase of the Property, Buyer and Seller have agreed that the “Escrowed Funds”
(defined in Item 1 below) be held and disbursed as provided
hereinbelow.
For
Ten
and No/100 ($10.00) Dollars and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree
as
follows:
1. The
Escrowed Funds.
From
the consideration to be paid by Buyer to Seller at closing under the APA,
the
parties shall deposit with the Escrow Agent (a) the sum of $200,000.00 (the
“Cash
Component”)
and (b)
1,000,000 shares of the common stock of Xethanol Corporation along with
corresponding executed blank stock powers of attorney (the “Stock
Component”)
(hereinafter, the Cash Component and the Stock Component shall be referred
to
collectively as the “Escrowed
Funds”).
As
soon as practicable after the execution hereof, Escrow Agent shall open a
money
market account under Seller’s taxpayer identification number (which Seller
represents and warrants is as set forth below in Seller’s signature block) and
shall deposit the Cash Component into such account. Escrow Agent shall be
the
sole signatory on such account, and the Cash Component along with any earned
interest shall be maintained in said account until distribution by the Escrow
Agent as provided below. The Stock Component shall be held by Escrow Agent
until
distribution by the Escrow Agent as provided below. Further, as stated in
the
APA, Escrow Agent is holding the Escrowed Funds hereunder as collateral agent
for Buyer for purposes of Buyer’s perfecting Buyer’s security interest in the
Escrowed Funds by possession, which security interest was granted by Seller
to
Buyer in Item 9 of the APA.
2. Release
of Escrowed Funds.
(a)
If Seller desires to request under Item 9(f) of the APA that Escrow Agent
make
disbursements of the Cash Component, Seller shall submit such a request to
Escrow Agent in a form substantially similar to the form attached hereto
as
Exhibit
“B”,
in
which case Escrow Agent shall promptly disburse the amount so
requested.
(b)
If Buyer desires to request under Item 9(g) of the APA that Escrow Agent
make
disbursements of the Cash Component, Buyer shall submit such a request to
Escrow
Agent in a form substantially similar to the form attached hereto as
Exhibit
“A”,
in
which case Escrow Agent shall promptly disburse the amount so
requested.
1
(c)
If Buyer or Seller desire to submit a request for payment or reimbursement
under
Item 9(h)(1) of the APA, Buyer shall use a form substantially similar to
that
attached hereto as Exhibit
“A”,
and
Seller shall use a form substantially similar to that attached hereto as
Exhibit
“C”.
If
Escrow Agent desires to submit a request that the Buyer pay under Item 9(h)(2)
of the APA, Escrow Agent shall use a form substantially similar to that attached
hereto as Exhibit
“D”.
Upon
the Escrow Agent’s payment of invoices under Item 9(h)(3) of the APA from funds
received by the Buyer, Escrow Agent shall disburse the Calculated Number
of
shares to the Buyer.
(d)
Twenty (20) days or more after issuance of the “Written
Confirmation”
(as
defined in Item 9(b) of the APA), Seller may request that the remaining Escrowed
Funds be disbursed to Seller in a form substantially similar to the form
attached hereto as Exhibit
“E”,
in
which case Escrow Agent shall promptly disburse to Seller the remaining Escrowed
Funds.
(e)
Should Seller and Buyer request that the Escrow Agent disburse all or part
of
the Escrowed Funds in a written instrument addressed to Escrow Agent and
signed
by Seller and Buyer, Escrow Agent shall disburse such part of the Escrowed
Funds
as Seller and Buyer so direct in such written request.
3.
Escrow Agent accepts its appointment hereunder and acknowledges that, when
received, the Escrowed Funds shall be held in escrow and held and disbursed
in
accordance with this Escrow Agreement; provided, however, that if a disagreement
arises between Seller and Buyer regarding the Escrowed Funds, which disagreement
is not settled by the mutual written agreement of Escrow Agent, Seller and
Buyer
or cannot be settled by Escrow Agent's reasonable review of this Agreement
and
the APA, the Escrow Agent shall not disburse the Escrowed Funds except upon
an
order of a court of competent jurisdiction or written instructions signed
by
Escrow Agent, Seller and Buyer; provided, further, however that nothing
contained in this paragraph shall restrict or prohibit Escrow Agent from,
in its
sole discretion, exercising its rights to interplead such funds as provided
below should a dispute arise between or among the parties hereto over this
escrow or the subject matter of this Agreement.
4. Escrow
Agent is hereby relieved of all liability under this Agreement for any
determination, act and/or failure to act, except for its own gross negligence,
fraud or the fraud or gross negligence of any of its partners, directors,
officers, or employees. The Escrow Agent shall not be responsible for the
genuineness of any certificate or signature and may conclusively rely upon
and
shall be protected when acting upon any notice, affidavit, request, consent,
instructions, check or other instrument believed by Escrow Agent in good
faith
to be genuine or to be signed or presented by the proper person, or duly
authorized, or properly made. The Escrow Agent shall have no responsibility
except for the performance of its express duties hereunder, and no additional
duties shall be inferred herefrom or implied hereby.
5. If
at any time a dispute between or among the parties hereto arises over this
escrow or the subject matter of this Escrow Agreement, Escrow Agent, in its
sole
discretion and notwithstanding anything to the contrary, may institute an
appropriate proceeding in a court of law or equity (including but not limited
to
a court in Chatham County, Georgia) and deliver or pay unto said Court any
funds
held by Escrow Agent pursuant to this Agreement; and in such event, any
reasonable legal fees or expenses incurred by Escrow Agent shall be chargeable
against the funds paid into Court as determined by the Court. Notwithstanding
the foregoing, Escrow Agent shall not be required to institute or defend
any
action involving any matter regarding this escrow or the subject matter of
this
Escrow Agreement unless and until requested to do so by another party to
this
Escrow Agreement and then only upon receiving full indemnity, in form and
substance wholly satisfactory to Escrow Agent, in its sole discretion, against
any and all claims, liabilities and expenses in relation thereto.
2
6. All
notices in connection with this Agreement shall be in writing, and either
(i)
hand-delivered, (ii) delivered by certified mail, postage prepaid, return
receipt requested, or (iii) delivered by an overnight delivery service,
addressed as first set forth above. Notices shall be deemed delivered (i)
on the
date that is three (3) calendar days after the notice is deposited in the
U.S.
Mail (not counting the mailing date), if sent by certified mail, (ii) on
the
date the hand-delivery is made or fax is received, if hand delivered or
delivered by fax, (iii) on the next business day following the date that
the
notice is deposited with an overnight delivery service, if delivered by an
overnight delivery service. The addresses given above may be changed by any
party by notice given in the manner provided herein.
7. This
Agreement and the rights and obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of
the
State of Georgia, without resort to the conflicts or choice of law principles
thereof. Whenever possible, each provision of this Agreement shall be
interpreted so as to be valid and effective under applicable law, but if
any
provision of this Agreement shall be prohibited or invalid under applicable
law,
that provision shall be ineffective only to the extent of the prohibition
or
invalidity, without invalidating the remainder of that provision or the
remaining provisions of this Agreement. This Agreement is the product of
joint
drafting and preparation, and no provision of this Agreement shall be construed
against or interpreted to the disadvantage of any party hereto by any
arbitrator, court or other governmental or judicial authority by reason of
such
party having or being deemed to have structured or dictated such provision.
Any
legal action or proceeding with respect to this Agreement must be brought
in the
courts of Chatham County, Georgia, and each party hereby submits to the
jurisdiction and venue of said courts, hereby expressly waiving any defense
of
personal jurisdiction or improper venue. Should any party obtain a judgment
against any other party, the party against whom judgment was rendered hereby
irrevocably agrees that party obtaining the judgment may domesticate and/or
enforce such judgment without limitation in any jurisdiction whatsoever in
which
the party against whom judgment was rendered or its property resides. Escrow
Agent may withhold amounts due to it upon disbursement of funds hereunder.
8. This
Agreement, along with all exhibits, documents, instruments and agreements
incorporated herein, constitutes the entire and complete agreement between
the
parties hereto and supersedes any prior oral or written agreement between
the
parties with respect to the obligations and covenants contemplated hereunder.
It
is expressly agreed that there are no verbal understandings or agreements
which
in any way change the terms, covenants, and conditions set forth in this
Agreement and that no modification of this Agreement and no waiver of any
of its
terms and conditions shall be effective unless made in writing and duly executed
by all parties hereto. This Agreement shall be binding upon and inure to
the
benefit of the respective heirs, estates, legal and personal representatives,
successors and permitted assigns of the parties hereto, and no party may
assign
or delegate in whole or in part any rights or duties hereunder without the
written consent of all parties hereto. This Agreement may be executed in
any
number of identical counterparts, and each counterpart hereof shall be deemed
to
be an original instrument, but all counterparts hereof taken together shall
constitute but a single instrument. If executed in identical counterparts,
this
Agreement shall not become effective until all parties hereto have effectively
executed their respective counterpart.
3
This
Escrow Agreement has been executed as of the date set forth above as
follows:
| Seller: | Buyer: | |||
| Carolina Fiberboard Corporation LLC | Xethanol Corporation | |||
| By: | /s/ Xxxxxx
Xxxxxx
|
By: | /s/ Xxxxxxxx
Xxxxxxx
|
|
|
Title:
|
Manager
|
Title: | Chief
Financial Officer
|
|
| Federal EIN is: _________________________ | ||||
| Escrow Agent: | ||||
| Ellis, Painter, Xxxxxxxxx & Xxxxx, LLP | ||||
| By: | /s/ Xxxxx
X.
Xxxxxx
Xxxxx X. Xxxxxx, Partner |
|||
|
|
||||
4
Exhibit
“A”
|
To:
|
Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP, as Escrow Agent
|
|
Attn:
Xxxxx X. Xxxxxx, Esq.
|
|
|
From:
|
Xethanol
Corporation
|
|
Date:
|
______________________,
200___
|
|
Re:
|
Request
for Reimbursement from Escrowed Funds held pursuant to that Escrow
Agreement dated November 7, 2006, between Xethanol Corporation,
Carolina
Fiberboard Corporation LLC and Ellis, Painter, Xxxxxxxxx & Xxxxx LLP
(the “Escrow Agreement”). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Escrow
Agreement.
|
Xethanol
Corporation hereby certifies that Carolina Fiberboard Corporation LLC failed
to
timely reimburse Xethanol Corporation the sum of $___________ as required
under
Item 9 of that Amended and Restated Asset Purchase Agreement dated November
____, 2006 between Xethanol Corporation, Carolina Fiberboard Corporation
LLC and
Xxxxxx Xxxxxx.
Xethanol
Corporation hereby requests that Ellis, Painter, Xxxxxxxxx & Xxxxx LLP, as
escrow agent under the Escrow Agreement, disburse to Xethanol Corporation
the
sum of $___________ from the “Escrowed Funds” (as such term is defined in the
Escrow Agreement) held by Ellis, Painter, Xxxxxxxxx & Xxxxx LLP, as escrow
agent under the Escrow Agreement.
| Xethanol Corporation | |
| By: | |
| Title: | |
5
Exhibit
“B”
|
To:
|
Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP, as Escrow Agent
|
|
Attn:
Xxxxx X. Xxxxxx, Esq.
|
|
|
From:
|
Carolina
Fiberboard Corporation LLC
|
|
Date:
|
______________________,
200___
|
|
Re:
|
Request
for Reimbursement from Escrowed Funds held pursuant to that Escrow
Agreement dated November 7, 2006, between Xethanol Corporation,
Carolina
Fiberboard Corporation LLC and Ellis, Painter, Xxxxxxxxx & Xxxxx LLP
(the “Escrow Agreement”). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Escrow Agreement.
|
Carolina
Fiberboard Corporation LLC hereby certifies that Carolina Fiberboard Corporation
LLC has paid the invoices attached hereto as Exhibit “A” in the total amount of
_________ and hereby requests that Escrow Agent disburse from the Escrowed
Funds
the sum of $___________ to Carolina Fiberboard Corporation LLC in reimbursement.
In support of this request, proof of payment of all of said invoices is also
attached as part of Exhibit “A”.
Carolina
Fiberboard Corporation LLC hereby requests that the Escrow Agent disburse
from
the Escrowed Funds the total amount of $________________ to directly paid
the
invoices attached hereto as Exhibit “A” which Carolina Fiberboard Corporation
LLC certifies have not yet been paid.
| Carolina Fiberboard Corporation LLC | |
| By: | |
| Title: | |
6
Exhibit
“C”
|
To:
|
Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP, as Escrow Agent
|
|
Attn:
Xxxxx X. Xxxxxx, Esq.
|
|
|
From:
|
Carolina
Fiberboard Corporation LLC
|
|
Date:
|
______________________,
200___
|
|
Re:
|
Request
for Reimbursement from Escrowed Funds held pursuant to that Escrow
Agreement dated November 7, 2006, between Xethanol Corporation,
Carolina
Fiberboard Corporation LLC and Ellis, Painter, Xxxxxxxxx & Xxxxx LLP
(the “Escrow Agreement”). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Escrow Agreement.
|
Carolina
Fiberboard Corporation LLC hereby requests that the Escrow Agent disburse
from
the Escrowed Funds the total amount of $________________ to directly pay
the
invoices attached hereto as Exhibit “A” which Carolina Fiberboard Corporation
LLC certifies have not yet been paid.
The
Cash
Component of the Escrowed Funds has been exhausted or will be exhausted by
the
payments requested above, and Carolina Fiberboard Corporation LLC elects
that
shares of stock held in escrow be used for payment pursuant to the procedure
set
forth in Item 9(h) of the APA.
| Carolina Fiberboard Corporation LLC | |
| By: | |
| Title: | |
7
Exhibit
“D”
|
To:
|
Xethanol
Corporation
|
|
From:
|
Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP, as Escrow Agent
|
|
Date:
|
______________________,
200___
|
|
Re:
|
Request
for Payment pursuant to that Escrow Agreement dated November 7,
2006,
between Xethanol Corporation, Carolina Fiberboard Corporation LLC
and
Ellis, Painter, Xxxxxxxxx & Xxxxx LLP (the “Escrow Agreement”).
Capitalized terms used herein but not defined herein shall have
the
meanings ascribed to them in the Escrow
Agreement.
|
Pursuant
to Item 9(h)(3) of the APA, Escrow Agent hereby requests that Xethanol
Corporation pay to Escrow Agent the sum of $___________ in order to permit
Escrow Agent to pay the invoices attached hereto as Exhibit “A.” Upon receipt of
such amount, the Escrow Agent will release to Xethanol Corporation _______
shares of the stock of Xethanol Corporation now held in escrow, all pursuant
to
Item 9(h)(3) of the APA.
| Ellis, Painter, Xxxxxxxxx & Xxxxx LLP | |
| By: | |
| Title: | |
8
Exhibit
“E”
|
To:
|
Ellis,
Painter, Xxxxxxxxx & Xxxxx LLP
|
|
Attn:
Xxxxx X. Xxxxxx, Esq.
|
|
|
From:
|
Carolina
Fiberboard Corporation LLC
|
|
Date:
|
______________________,
200___
|
|
Re:
|
Request
for Disbursement of Escrowed Funds held pursuant to that Escrow
Agreement
dated November 7, 2006, between Xethanol Corporation, Carolina
Fiberboard
Corporation LLC and Ellis, Painter, Xxxxxxxxx & Xxxxx LLP (the “Escrow
Agreement”).
|
Carolina
Fiberboard Corporation LLC hereby certifies that Twenty (20) days or more
have
elapsed after issuance of the “Written
Confirmation”
(as
defined in Item 9(b) of that Amended and Restated Asset Purchase Agreement
dated
November ____, 2006 between Xethanol Corporation, Carolina Fiberboard
Corporation LLC and Xxxxxx Xxxxxx).
Carolina
Fiberboard Corporation LLC hereby requests that Ellis, Painter, Xxxxxxxxx
&
Xxxxx LLP, as escrow agent under the Escrow Agreement, disburse to Carolina
Fiberboard Corporation LLC all remaining “Escrowed Funds” (as such term is
defined in the Escrow Agreement) held by Ellis, Painter, Xxxxxxxxx & Xxxxx
LLP, as escrow agent under the Escrow Agreement.
| Carolina Fiberboard Corporation LLC | |
| By: | |
| Title: | |
9
