EXHIBIT 10.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made and entered into this _____
day of _____________, 2002.
BY AND BETWEEN: WESTERN FEED XXXXX, INC.
a Kansas corporation, as issuer of between
Seventeen Million and Five Hundred Thousand
(17,500,000) and Thirty-Five Million (35,000,000)
Shares of Common Stock of Western Feed Xxxxx, Inc.
hereinafter referred to as
"Issuer,"
AND U.S. BANK NATIONAL ASSOCIATION,
Omaha, Nebraska,
hereinafter referred to as
"Bank."
WITNESSETH:
WHEREAS, Issuer proposes to issue up to Thirty-Five Million (35,000,000)
shares of no par value common stock, (the "Shares"), of Issuer, pursuant to
an SB-2 Form Registration under the requirements of the Securities Act of
1933, and the securities laws of the states in which this offering will be
made, for sale to investors (the "Investors") at a price of forty Cents
($0.40) per Share (the "Securities");
WHEREAS, it is provided in the Registration Statement and Prospectus
("Prospectus") of Issuer that, until a minimum subscription level of
Seventeen Million Five Hundred Thousand (17,500,000) Shares
has been reached, the proceeds from the subscriptions will be impounded and
escrowed with Bank; and if the minimum subscription has not been secured
within the dates set forth in the Prospectus, that such proceeds, without
interest, will be returned to the Investors without deduction therefrom;
WHEREAS, it is further provided in the Prospectus the proceeds from the
subscription will be impounded until Issuer has a binding commitment from a
lender to provide debt financing to fund the balance of the project cost
beyond the amount of equity raised, as disclosed in the Prospectus; and if
such debt financing has not been secured within the dates set forth in the
Prospectus, that such proceeds, without interest, will be returned to
Investors without deduction therefrom;
WHEREAS, Issuer is willing to deposit with Bank the subscription proceeds
received from the Investors of the Securities to enable said proceeds to be
impounded and escrowed with Bank; and
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WHEREAS, Bank is willing to act as escrow agent on behalf of Issuer for
the purpose of impounding such proceeds.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. Issuer does hereby appoint Bank, and Bank does hereby accept such
appointment, to act as escrow agent of those funds deposited with Bank
by Issuer pursuant to this Agreement.
2. Issuer does hereby agree to deposit with Bank all monies collected by
Issuer, and any an all agents of Issuer, from subscriptions for the
Securities in accordance with the current Prospectus of Issuer, a current
copy of which will be furnished to Bank, together with any supplemental
information thereto which is attached thereto and made a part hereof.
3. Monies deposited with Bank shall be deposited into a Business Money
Market Savings Account bearing interest at the published rate (__% APY
as of ____________, 2002). Bank shall waive all costs, expenses and
fees associated with Bank's services pursuant to this Agreement.
4. The duties and liabilities of Bank in performing the function of escrow
agent will be limited as follows:
A) To receive and hold all of the monies collected from the subscriptions
for the Securities pursuant to the Prospectus until the minimum level
described in paragraph (B) is received.
B) To retain such monies impounded and escrowed for the Issuer under
the terms hereinabove provided and as set forth in the Prospectus of
Issuer until the minimum subscription amount of Seven Million Dollars
($7,000,000) is received. At that time, Bank shall disburse the funds
held by it hereunder, as follows:
(i) Such monies shall be released to Issuer upon Bank's receipt of
Seven Million Dollars ($7,000,000) minimum subscription amount
accompanied by a written request from Issuer, accompanied by evidence
of a binding commitment from a lender to provide debt financing to
fund the balance of the project as described in the Prospectus and
also accompanied by a written consent by Kansas Securities
Commissioner authorizing the release of funds from escrow.
(ii) If the offering of the Securities is abandoned within the time
and terms set forth in the Prospectus, the monies so impounded and
escrowed shall be returned, upon Bank receiving a written request
from the Issuer to so distribute the monies, directly by Bank to the
Investors without interest thereon.
C) Bank shall be liable as a depository only and shall not be
responsible for the sufficiency or accuracy of the form, execution or
validity of documents deposited hereunder, or any description of property
or other thing therein, nor shall it be liable in any respect on account
of the identity, authority, or rights of the persons executing or
delivering or purporting to execute or deliver any such document or paper.
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D) Bank, as a part of the consideration for the acceptance of this
escrow, shall not be liable for any acts or omissions done in good faith,
nor for any claim, demands, or losses, nor for any damages made or
suffered by any party to this Agreement, excepting such as may arise
through or be caused by its willful or gross negligence.
E) Bank shall not be liable for collection of any items deposited with
it or for any proceeds from such items until the same in actual cash have
been received. Bank may rely upon any paper, document or other writing
believed by it to be authentic in making any delivery of money or property
hereunder. Bank shall in no way be responsible nor shall it be its duty
to notify any party hereto or party interested in this escrow deposit of
any payment or maturity, under the terms of any instrument deposited
herewith.
F) Bank may employ attorneys, accountants or seek other advice for the
reasonable protection of the escrow property and of itself. The
reasonable fees and expenses of all such advice shall be borne by Issuer
as long as such fees and expenses are authorized and approved by Issuer in
advance. Such approval shall not be unreasonably withheld.
G) Bank may, by request of the Securities and Exchange Commission of the
United States of America or any state securities commission, disclose to
such entity an adequate description of all deposits made with it under
this Agreement and of such investments made by Bank with the monies
deposited with Bank by Issuer a reasonable fee for the services required
pursuant to this Section.
H) If the proceeds received by Issuer from subscriptions for the
Securities from investors at the offering price of Forty Cents ($0.40)
per Share and deposited with Bank do not aggregate the minimum
subscription amount of Seven Million Dollars ($7,000,000) or should the
offering be abandoned, all as set forth in the Prospectus of Issuer, this
Agreement shall terminate and such proceeds shall be refunded, without
interest thereon, directly to the Investors by Bank upon receipt by Bank of
written instructions to make such refund.
I) If Issuer is unable to perform its agreement as hereinabove set forth
and in the Prospectus, Bank shall continue to hold all monies and
investments then on deposit until it is released from this Agreement by
Issuer or such other person who may be so authorized and is directed to
dispose of such monies and investments by Issuer or any administrative body
or court having jurisdiction of the matter.
5. The foregoing recitals are hereby incorporated by reference into this
Agreement as if set forth herein verbatim.
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IN WITNESS WHEREOF, the parties by their respective officers do hereby
executive this Agreement on the day and year first above written, thereby
binding themselves and their respective successors and assigns.
WESTERN FEED XXXXX, INC.
By: _____________________________
Xxxx X. Xxxxxxxx, President
U.S. BANK, NATIONAL ASSOCIATION
d/b/a FIRST BANK N.A.
By: _________________________________
Xxxx X. Xxx, Vice President
ACCEPTANCE OF SUBSCRIPTION BY WESTERN FEED XXXXX, INC.
The above subscription for ____________ shares is accepted this _____
day of ________________________, 2002.
WESTERN FEED XXXXX, INC.
BY:____________________________________
Xxxx Xxxxxxxx, President
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