AMENDED AND RESTATED ESCROW AGREEMENT
Exhibit 4.3
AMENDED AND RESTATED
ESCROW AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this “Agreement”) is made this 19th day of
September, 2006, by and between the One Earth Energy, LLC, an Illinois limited liability
company (the “Company”) and First Busey Trust as escrow agent (the “Escrow Agent”).
W I T N E S S E T H:
WHEREAS, the Company proposes to offer certain of its Membership Units (the “Units”) at a
price of Five Thousand Dollars ($5,000) per Unit, with a minimum purchase of Five (5) Units, in an
offering (the “Offering”) conducted pursuant to a registration statement (the “Registration
Statement”) filed or to be filed with the Securities and Exchange Commission and various states,
including, without limitation, the States of Illinois and Indiana, and pursuant to exemptions in
other states;
WHEREAS, the Company will allow investors in the Offering to deliver the purchase price of the
subscribed Units in installments; and
WHEREAS, the Company desires to comply with the requirements of federal and state securities
laws 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 the “Minimum Escrow Deposit” (as
hereinafter defined) is not deposited with the Escrow Agent.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good
and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree
as follows:
1. Acceptance
of Appointment. First Busey Trust hereby agrees to act as the 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 “Escrow Funds”) shall equal the Minimum Escrow Deposit (as hereinafter defined), the
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 subscribed for Units in the Offering.
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4. Deposit of Proceeds. All proceeds from subscriptions in the Offering shall be
delivered by the Company to the Escrow Agent, within forty-eight hours of receipt, 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 of each person subscribing for Units,
the number of Units subscribed for, and the amount paid by each such subscriber. 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.
5. Investment of Escrow Account. The Escrow Funds shall be credited by the Escrow
Agent and recorded in the Escrow Account. The Escrow Agent shall be permitted, and is hereby
authorized and directed to deposit transfer, hold and invest all Escrow Funds, including principal
and interest, in Federal Government Obligations or obligations issued and/or guaranteed as to
principal and interest by agencies or instrumentalities of the U.S. Government or common funds or
mutual funds which invest primarily in such obligations. Any interest received by Escrow Agent
with respect to the Escrow Funds shall be paid pursuant to the terms of this Agreement.
6. Termination of Escrow. Unless sooner terminated pursuant to Section 7 below, this
Agreement and the Escrow Account created hereunder shall terminate as of the date (the “Termination
Date”), which is one year and one day following the date upon which the Securities and Exchange
Commission authorizes the Offering (the “Offering Effective Date”); provided, however, that if
prior to the Termination Date, the Company has accepted subscriptions for Units equal to the
minimum offering amount, and the Company has advised the subscribers for those Units to remit to
the Escrow Agent the balance of the purchase price, then the Escrow Account may continue beyond the
Termination Date until all amounts payable by such subscribers have been paid and the conditions
for releasing the Escrow Funds have been satisfied. In no event shall this date be later than
three (3) months following the Termination Date.
7. Disposition of Escrow Funds. The Escrow Agent shall have the following duties and
obligations under this Agreement:
A. The Escrow Agent shall send to the Company every seven (7) days a written itemized
notice acknowledging the receipt and amount of the Escrow Funds.
B. The Escrow Agent shall give the Company prompt written notice when the Escrow Funds,
exclusive of interest, equal or exceed ten percent (10%) of the Minimum Escrow Deposit.
Following receipt of such notice, the Company will advise the subscribers for Units to remit
to the Escrow Agent the balance of the purchase price within thirty (30) days. The Escrow
Agent shall give the Company prompt written notice when the Escrow Funds, exclusive of
interest, equal or exceed the Minimum Escrow Deposit.
C. At the time (and in the event) that: (a) the Escrow Funds, exclusive of interest,
equal or exceed $30,100,000.00 (the “Minimum Escrow Deposit”); (b) the Escrow Agent shall
have received written confirmation from the Company that the Company has obtained a written
debt financing commitment for debt financing ranging from a minimum of $68,955,000.00 to a
maximum of $98,955,000.00; (c) the Company has
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affirmatively elected in writing to terminate this Agreement; and (d) the Escrow Agent
shall have provided to each state securities department in which the Company has registered
its securities for sale, as communicated to the Escrow Agent by the Company, an affidavit
stating that the requirements of this Subsection 7.C have been satisfied, then this
Agreement shall terminate, and the Escrow Agent shall promptly disburse the Escrow Funds,
including interest, to the Company to be used in accordance with the provisions set out in
the Registration Statement. Upon completing such disbursement, the Escrow Agent shall be
completely discharged and released of any and all further responsibilities hereunder.
D. In the event the Escrow Funds do not equal or exceed the Minimum Escrow Deposit on
or before the Termination Date, or if the Company has not received a written debt financing
commitment as described in Subsection 7.C above on or before the Termination Date, the
Escrow Agent shall return to each of the subscribers in the Offering as promptly as possible
after the Termination Date and on the basis of its records pertaining to the Escrow Account:
(a) the sum which each subscriber initially paid on account of such subscriber’s
subscription for Units, and (b) each subscriber’s portion of the total interest earned on
the Escrow Account as of the Termination Date, (c) reduced by the transaction fees provided
in Section 10 below. Computation of any subscriber’s share of the net interest earned on
the Escrow Account will be a weighted average based on the ratio of such subscriber’s
deposit in the Escrow Account to all such subscribers’ deposits therein, and upon the length
of time that such deposit was held in the Escrow Account as compared to all such deposits.
All computations with respect to each subscriber’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 subscriber pursuant to this Section shall be deemed to be the property
of such subscriber, free and clear of any and all claims of the Company or its agents or
creditors; and any further purchase obligation of such subscriber in connection with the
Offering shall thereupon be deemed, ipso facto, to be cancelled without any further
liability. At such time as the Escrow Agent shall have made all of the payments called for
in this Section, the Escrow Agent shall be completely discharged and released of any and all
further responsibilities hereunder, except that the Escrow Agent shall be required to
prepare and issue an IRS Form 1099 to each subscriber.
E. The agency responsible for securities regulation in each state in which the Company
has registered its securities, as communicated to Escrow Agent by the Company, shall have
the right to inspect and make copies of records maintained by Escrow Agent relating to the
Offering at any reasonable time wherever such records are located.
8. Agreement with Escrow Agent. To induce the Escrow Agent to act hereunder, it is
agreed by the Company that:
A. 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.
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B. The sole duty of the Escrow Agent, other than as herein specified, shall be to
receive the Escrow Funds and hold them subject to disbursement in accordance herewith. The
Escrow Agent shall be under no duty to determine whether the Company is complying with the
requirements of this Agreement in tendering to the Escrow Agent proceeds from sales of or
subscriptions for Units. The Escrow Agent may conclusively rely upon and shall be protected
in acting in reliance upon, any statement, certificate, notice, request, consent, order or
other document believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall have no duty or liability to verify any
such statement, certificate, notice, request, consent, order or other document, and its sole
responsibility shall be to act only as expressly set forth in this Agreement. The Escrow
Agent shall be under no obligation to institute or defend any action, suit or proceeding in
connection with this Agreement unless first indemnified to its satisfaction. The Escrow
Agent may consult counsel in respect of any question arising under this Agreement, and the
Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice
of such counsel.
C. The Company hereby indemnifies and holds harmless the Escrow Agent from and against
any and all loss, liability, cost, damage and expense, including, without limitation,
reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action,
claim or proceeding brought against the Escrow Agent arising out of or relating to this
Agreement or any transaction to which this Agreement relates, unless such action, claim or
proceeding is the result of the gross negligence or willful misconduct of the Escrow Agent.
9. Resignation and Removal of Escrow Agent; Successors. The Escrow Agent may resign
upon thirty (30) days advance written notice to the Company. If a successor Escrow Agent is not
appointed within the 30-day period following such notice, the Escrow Agent may petition any court
of competent jurisdiction to name a successor Escrow Agent. Any commercial banking institution or
trust company with which the Escrow Agent may merge or consolidate, and any commercial banking
institution or trust company to which the Escrow Agent transfers all or substantially all of its
corporate trust business shall be the successor Escrow Agent without further act.
10. Fees and Expenses of Escrow Agent. The Company agrees to pay the Escrow Agent the
fees specified in the Escrow Agent’s fee schedule attached hereto as EXHIBIT A, in the
manner set forth therein, unless otherwise agreed to by the parties in writing. The parties
further agree that such fees shall be paid from interest on the Escrow Account only and not from
principal. In the event the interest on the Escrow Account is insufficient to satisfy the full
amount of fees payable hereunder, the Company shall be solely responsible for the payment of such
fees, and the Escrow Agent shall not seek payment of the fees from subscribers or apply any
principal deposited by subscribers in the Escrow Account against such fees. The fee agreed upon
herein is intended as full consideration for the Escrow Agent’s services as contemplated by this
Agreement; provided, however, that in the event (a) the Escrow Agent renders any
material service not contemplated in this Agreement, (b) any material controversy arises hereunder,
or (c) the Escrow Agent is made a party to any litigation pertaining to this Agreement, or the
subject matter hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary
services and reimbursed for all costs
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and expenses, including reasonable attorney’s fees, occasioned by any delay, controversy,
litigation or event, and the same shall be recoverable from the Company, but not from the Escrow
Account.
11. Notices. All notices, requests, demands, and other communications under this
Agreement 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 obtained promptly after completion of transmission, (c) on the next day
on which such deliveries are made in Xxxxxx City, Illinois, 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:
If to Escrow Agent:
First Busey Trust
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx XxxXxxx, President
Fax: (000) 000-0000
Phone: (000) 000-0000
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx XxxXxxx, President
Fax: (000) 000-0000
Phone: (000) 000-0000
If to the Company:
One Earth Energy, LLC
0000 Xxxx 0xx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, President
Fax: (000) 000-0000
Phone: (000) 000-0000
0000 Xxxx 0xx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, President
Fax: (000) 000-0000
Phone: (000) 000-0000
with a required copy to:
Brown, Winick, Graves, Gross, Xxxxxxxxxxx and Schoenebaum, P.L.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
12. Governing Law. This Agreement shall be construed, performed, and enforced in
accordance with, and governed by, the internal laws of the State of Illinois, without giving effect
to the conflicts of laws provisions.
13. Successors and Assigns. Except as otherwise provided in this Agreement, no party
hereto shall assign this Agreement or any rights or obligations hereunder without the prior written
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consent to the other parties hereto, and any attempted assignment without such prior written
consent shall be void and of no force and effect. This Agreement shall inure to the benefit of,
and shall be binding upon, the successors and permitted assigns of the parties hereto.
14. Severability. In the event that any part of this Agreement is declared by any
court or other judicial or administrative body to be null, void, or unenforceable, said provision
shall survive to the extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect.
15. Further Assurances. Each of the parties shall execute such documents and other
papers and take such further actions, as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
16. 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 this Agreement, in any one or more instances,
shall not be deemed to be nor construed as a further or continuing waiver of any such conditions,
or of the breach of any other provision, term, covenant, representation or warranty of this
Agreement.
17. Entire Agreement. This Agreement contains the entire understanding among the
parties hereto with respect to the transactions contemplated hereby and supersedes and replaces all
prior and contemporaneous agreements and understandings, oral or written, with regard to such
escrow, including without limitation that certain Escrow Agreement, dated July 10, 2006.
18. Section Headings. The section headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this Agreement.
19. Counterparts. 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.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures as of the day
and year first written above.
| THE COMPANY: | ESCROW AGENT | |||||||
| ONE EARTH ENERGY, LLC | FIRST BUSEY TRUST | |||||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxx XxxXxxx | |||||
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EXHIBIT A
[Attach Escrow Agent’s Fee Schedule]
Set up Fee |
$ | 1,000 |
Monthly fee based on the average collected monthly balance of an annualized rate of 25 basis
points.
Example: $1,000,000 x .25% = $2,500 per year divided by 12 months = $208.33/month
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