ESCROW AGREEMENT
Exhibit 4.3
This Escrow Agreement (the “Agreement”) dated as of November 13, 2006 is by and between
Bootheel Agri-Energy, LLC, a Missouri limited liability company (the “Company”), and U.S. Bank (the
“Escrow Agent”) (the “Escrow Agent” and the “Company” may also be hereinafter referred to as the
“Parties”).
RECITALS
WHEREAS, the Company proposes to offer a minimum of 30,000,000 and a maximum of 55,000,000 of
its Membership Units (the “Units”) at a price of $2.00 per Unit, with a required minimum investment
of 10,000 Units and in additional increments of 5,000 Units, in an offering made pursuant to a
federal registration under the provisions of the Securities Act of 1933, as amended (the
“Offering”);
WHEREAS, the Company has filed a registration statement (as may be amended) (the “Registration
Statement”) to register the Units with the Securities and Exchange Commission;
WHEREAS, the Company desires to comply with the requirements of the Securities Act of 1933 and
of the various state regulatory statutes and regulations, and desires to protect the investors in
the Offering by providing, under the terms and conditions herein set forth, for the return to
subscribers of the money which they may pay on account of purchases of Units in the Offering if
certain specified conditions are not met; and
NOW, THEREFORE, in consideration of the premises the Parties agree as follows:
1. Acceptance Of Appointment. Escrow Agent hereby agrees to act as escrow agent under
this Agreement. The Escrow Agent shall have no duty to enforce any provision hereof requiring
performance by any other party hereunder.
2. Establishment Of Escrow Account. An escrow account (the “Escrow Account”) is
hereby established with the Escrow Agent for the benefit of the investors in the Offering. Except
as specifically provided in this Agreement, the Escrow Account shall be created and maintained
subject to the customary rules and regulations of the Escrow Agent pertaining to such accounts.
3. Ownership Of Escrow Account. Until such time as the funds deposited in the Escrow
Account (the “Deposited Funds”) are disbursed in accordance with the terms hereof, all funds
deposited in the Escrow Account by the Company shall not become the property of the Company or be
subject to the debts of the Company or any other person but shall be held by the Escrow Agent
solely for the benefit of the investors who have purchased Units in the Offering.
4. Escrow Fees. The Company hereby agrees to pay to the Escrow Agent upon the
execution of this Agreement an advance payment for ordinary services rendered hereunder in the
amount of $1,000 (the “Escrow Fee”). Thereafter, Company shall pay to Escrow Agent an annual
maintenance fee payable on the last day of each year during the term of this Agreement in the
amount of $1,000.
5. Deposit Of Proceeds. All proceeds from sales of Units in the Offering shall be
delivered by the Company to the Escrow Agent, within forty-eight hours of the receipt thereof from
investors, endorsed (if appropriate) to the order of the Escrow Agent, together with an appropriate
written statement setting forth the name, address and social security number/taxpayer
identification number of each person or entity purchasing Units, the number of Units purchased, and
the amount paid by each such purchaser. Any such proceeds deposited with the Escrow Agent in the
form of uncollected checks shall be promptly presented by the Escrow Agent for collection through
customary banking and clearing house facilities. All such deposited proceeds are referred to herein
as the “Escrow Funds.”
6. Investment Of Escrow Funds. The Escrow Funds shall be credited by Escrow Agent and
recorded in the Escrow Account. The Escrow Agent shall be permitted, and is hereby authorized to
invest all funds received under this Agreement from time to time in a repurchase agreement fully
collateralized by federal government securities. Any interest received by Escrow Agent with respect
to the Escrow Funds shall be paid pursuant to the terms of this Agreement.
7. Termination Of Escrow. This Agreement and the Escrow created hereunder shall be
terminated as provided in paragraph 8 hereof or as of the date in calendar year 2007 (the
“Termination Date”) one year and one day following the date in calendar year 2006 upon which the
Securities and Exchange Commission authorizes the Offering (the “Offering’s Effective Date”). The
Company shall notify Escrow Agent of the Offering’s Effective Date within thirty (30) days of the
receipt of notice of the Offering’s Effective Date from the Securities and Exchange Commission.
8. Disposition Of Escrow Funds. The Escrow Agent shall have the following duties and
obligations under this Agreement:
A. The Escrow Agent shall send a written notice acknowledging the receipt of
the Deposited Funds every seven days to the Company.
B. The Escrow Agent shall give the Company prompt written notice when the
Deposited Funds equal $60,000,000 (exclusive of interest). Thereafter, Escrow Agent
shall give the Company written notice acknowledging the receipt of the Deposited
Funds every seven days. The Escrow Agent shall give the Company prompt written
notice when the Deposited Funds total $110,000,000 (exclusive of interest).
C. At the time (and in the event) that: (a) the Deposited Funds shall, during
the term of this Agreement, equal at least $60,000,000 in
2
subscription proceeds (exclusive of interest) (the “Minimum Escrow Deposit”)
and (b) the Escrow Agent shall have received written confirmation from the Company
that the Company has obtained written debt financing commitments which combined
with the Deposited Funds, would equal $187,880,000 for debt financing, then this
Agreement shall terminate, and the Escrow Agent shall promptly disburse the funds
on deposit, including interest, to the Company to be used in accordance with the
provisions set out in the Registration Statement. The Company will deliver a copy
of the Registration Statement to the Escrow Agent upon execution of this Agreement.
The Escrow Agent will have no responsibility to examine the Registration Statement
with regard to the Escrow Account or otherwise, nor shall Escrow Agent have any
duty to ensure that Company complies with the Registration Statement. Upon the
making of such disbursement, the Escrow Agent shall be completely discharged and
released of any and all further responsibilities hereunder.
D. In the event that (a) the Deposited Funds do not equal or exceed the
Minimum Escrow Deposit on or before the Termination Date, (b) the Company has not
received written debt financing commitments as described herein on or before the
Termination Date, or (c) the Company has terminated or abandoned the Offering, then
the Escrow Agent shall return to each of the purchasers of the Units in the
Offering, as promptly as possible after such Termination Date and on the basis of
its records pertaining to the Escrow Account: (x) the sum which each purchaser
initially paid in on account of purchases of the Units in the Offering and (y) each
purchaser’s portion of the total interest earned on the Escrow Account as of the
Termination Date, (z) reduced by the transaction fees provided in paragraph 11
hereof. Computation of any purchaser’s share of the net interest earned will be a
weighted average based on the proportion of such purchaser’s deposit in the Escrow
Account from the Offering to all such purchasers’ deposits held by the Escrow Agent
and upon the length of time in days such deposit was held in the Escrow Account as
compared to all such deposits. All computations with respect to each purchaser’s
allocable share of net interest shall be made by the Escrow Agent, which
determinations shall be final and conclusive. Any amount paid or payable to a
purchaser pursuant to this paragraph shall be deemed to be the property of such
purchaser, free and clear of any and all claims of the Company or its agents or
creditors; and the respective purchases of the Units made and entered into in the
Offering shall thereupon be deemed, ipso facto, to be cancelled. At such time as
the Escrow Agent shall have made all the payments called for in this paragraph, the
Escrow Agent shall be completely discharged and released of any and all further
responsibilities hereunder, except that Escrow Agent shall be required to prepare
and issue a single IRS Form 1099 to each investor in the event that funds are
returned to investors.
3
9. Liability Of Escrow Agent. It is understood and agreed that the duties of the
Escrow Agent are purely ministerial in nature. It is further agreed that:
A. The Escrow Agent shall not be required to enforce any of the terms or
conditions of any other agreement between the Company and any prospective purchaser
or purchaser, nor shall the Escrow Agent be responsible for the performance by the
Company of its respective obligations under this Agreement.
B. The Escrow Agent may, at its own discretion, refuse to accept any deposits
lacking required documentation or containing discrepancies.
C. The Escrow Agent shall be under no duty to collect any check or other
payment instrument delivered to it hereunder that is dishonored, but the Escrow
Agent shall within a reasonable time return to the Company any such check or other
payment instrument together with any information which accompanied such check,
draft or other payment instrument.
D. The Escrow Agent shall have the right to act in reliance upon any document,
instrument or signature believed by it to be genuine and to assume that any person
purporting to give any notice or instructions in accordance with this Agreement or
in connection with any transaction to which this Agreement relates has been duly
authorized to do so. The Escrow Agent shall not be obligated to make any inquiry as
to the authority, capacity, existence or identity of any person purporting to give
any such notice or instructions.
E. The Escrow Agent shall not be liable for any action taken or omitted
hereunder except in the case of its gross negligence or willful misconduct. The
Escrow Agent shall be entitled to consult with counsel of its own choosing and
shall not be liable for any action taken, suffered or omitted by it in accordance
with the advice of such counsel.
F. The Escrow Agent shall have no responsibility at any time to ascertain
whether or not any security interest exists in the Escrow Account or any part
thereof or to file any financing statement under the Uniform Commercial Code with
respect to the Escrow Account or any part thereof.
10. Warranties To Escrow Agent. The Company warrants to and agrees with the Escrow
Agent that, unless otherwise expressly set forth in this Agreement, the Company has not granted to
any party any lien, claim or security interest in the Escrow Account or any part thereof and has no
direct knowledge of any financing statement under the Uniform Commercial Code on file in any
jurisdiction claiming a security interest in or describing (whether specially or generally) the
Escrow Account or any part thereof.
11. Fees And Expenses. In the event the Deposited Funds do not equal or exceed the
Minimum Escrow Deposit before the Termination Date or the Company does
4
not receive written debt financing commitments as described herein before the Termination
Date, the Escrow Agent shall be entitled to a fee of $25 per purchaser, which fees shall be paid by
the Company. In the event 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 other 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
all of the Escrow Agent’s usual charges and the Escrow Agent may deduct such sums from the interest
on the Escrow Account only and not from principal deposited to the Escrow Account.
12. 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, in the Escrow Agent’s
discretion, the Escrow Agent may require, 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, except 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.
13. 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. The Escrow Agent shall have a first lien on the property and papers
held under this Agreement for such compensation and expenses.
14. Resignation Of Escrow Agent. The Escrow Agent may resign at any time upon giving
at least (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
5
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 authorized to do business in
the state of Missouri. 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.
15. Automatic Succession. Any company into which the Escrow Agent may be merged or
with which it may be consolidated, or any company to whom the Escrow Agent may transfer a
substantial amount of its global escrow business, shall be the Successor to the 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.
16. Miscellaneous:
A. Governing Laws. This Agreement is to be construed and interpreted according
to Missouri law.
B. 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 one and the same instrument. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in lieu
of the original Agreement for all purposes. Signatures of the parties transmitted
by facsimile shall be deemed to be their original signatures for all purposes.
C. Notices. All instructions, notices and demands herein provided for shall
be in writing and shall be deemed to have been duly given (a) on the date of
service if served personally on the party to whom notice is to be given; (b) on the
day of transmission if sent by facsimile transmission to the facsimile number given
below and telephonic confirmation of receipt is promptly obtained after completion
of transmission; (c) on the next day on which such deliveries are made in Sikeston,
Missouri, when delivery is to Federal Express or similar overnight courier or the
Express Mail service maintained by the United States Postal Service; or (d) on the
fifth day after mailing if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid and properly addressed,
return receipt requested, to the party as follows:
6
If to the Company:
Bootheel Agri-Energy, LLC
Attn: Xxxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: 000.000.0000
Facsimile:
Attn: Xxxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: 000.000.0000
Facsimile:
With a required copy to:
Xxxxx Xxxx LLP
Attn: Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Telephone: 000.000.0000
Attn: Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Telephone: 000.000.0000
If to the Escrow Agent:
U. S. Bank
Attn: Xxxxxx Xxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxxx Xxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
D. Amendments. This Agreement may be amended or modified and any of the
terms, covenants, representations, warranties or conditions hereof may be waived,
only by a written instrument executed by the parties hereto, or in the case of a
waiver, by the party waiving compliance. Any waiver by any party of any condition
or of the breach of any provision, term, covenant, representation or warranty
contained in the Agreement, in any one or more instances, shall not be deemed to be
nor construed as further or continuing waiver of any such conditions or of the
breach of any other provision, term, covenant, representation or warranty of this
Agreement.
E. Entire Agreement. This Agreement contains the entire understanding among
the parties hereto with respect to the escrow contemplated hereby and supersedes
and replaces all prior and contemporaneous agreements and understandings, oral or
written, with regard to such escrow.
F. Non-Endorsement. The Company represents and agrees that it has not made
nor will it in the future make 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.
[remainder of page intentionally blank]
7
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures as of the day and year first above written.
| The Company Bootheel Agri-Energy, LLC |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx | ||||
| Chairman | ||||
| Escrow Agent U.S. Bank |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: Xxxxxxx X. Xxxxxxxx | ||||
| Title: Market President | ||||
8
