ESCROW AGREEMENT
Exhibit 4.3
THIS ESCROW AGREEMENT (this “Agreement”) is made this ___day of October, 2005, by and between
E Energy Xxxxx, LLC a Nebraska limited liability company (“E Energy Xxxxx”) and Union Bank & Trust
Company as escrow agent (the “Escrow Agent”).
W I T N E S S E T H:
WHEREAS, E Energy Xxxxx proposes to offer a minimum of 1,990 and a maximum of 5,810 of its
Membership Units (the “Units”) at a price of $10,000 per Unit, in minimum blocks of two (2) Units
in an offering registered with the Securities and Exchange Commission and in the states of
Nebraska, Iowa, Kansas, Missouri, Wisconsin, South Dakota and Florida, and possibly offered in
other states pursuant to state securities registration exemptions and under the provisions of the
Securities Act of 1933, as amended (the “Offering”);
WHEREAS, E Energy Xxxxx will file a registration statement to register the Units with the
Securities and Exchange Commission, the States of Nebraska, Iowa, Kansas, Missouri, Wisconsin,
South Dakota and Florida, and possibly other states;
WHEREAS, E Energy Xxxxx will allow investors in the Offering to deliver the purchase price of
the subscribed Units in installments; and
WHEREAS, E Energy Xxxxx 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
(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. Union Bank & Trust Company 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”) shall equal the Minimum Escrow Deposit (as hereinafter defined),
all funds deposited in the Escrow Account by E Energy Xxxxx shall not become the property of E
Energy Xxxxx or be subject to the debts of E Energy Xxxxx 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.
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4. Deposit of Proceeds. All proceeds from sales of Units in the Offering shall be
delivered by E Energy Xxxxx 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 name, address and social security number of each person
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. As the proceeds of each sale are deposited with the Escrow Agent, E Energy Xxxxx shall
reserve the number of Units confirmed to the purchaser thereof in connection with such sale. All
such deposited proceeds are referred to herein as the “Escrow Funds”.
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 to deposit, transfer, hold and invest all funds received under this Agreement, including
principal and interest, in those investments directed, in writing by E Energy Xxxxx. The Escrow
Agent is hereby authorized to invest Escrow Funds in the Federated Treasury Obligations Money
Market Mutual Fund for temporary investment without written direction. Any interest received by
the Escrow Agent with respect to the Escrow Funds shall be paid to E Energy Xxxxx, or the
investors, as indicated elsewhere in this Agreement .
6. Termination of Escrow. This Agreement and the Escrow created hereunder shall
be terminated as provided in paragraph 7 hereof or as of the date in calendar year 2007 (the
“Termination Date”), which is 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”), provided; however, that if prior to Termination Date, the Company has sold membership units
equal to the minimum offering amount and the Company has advised the purchasers of those membership
units to remit to the Escrow Agent the balance of the purchase price, then the Escrow may continue
beyond the Termination Date until all Funds have been paid and the conditions for releasing the
Funds have been satisfied. In no event shall this date be later than three (3) months following
the Termination 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.
7. 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 $1,990,000 (exclusive of interest). Following receipt of such notice, the Company will
advise the purchasers of Units to remit to the Escrow Agent the balance of the purchase price
within twenty (20) days. Thereafter, Escrow Agent shall give the Company written notice
acknowledging the receipt of the Deposited Funds every seven days. The Escrow Agent
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shall give the
Company prompt written notice when the Deposited Funds total $19,900,000 (exclusive of interest).
C. At the time (and in the event) that: (a) the Deposited Funds shall, during the term of this
Agreement, equal $19,990,000 in subscription proceeds (exclusive of interest) (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 $23,930,000 to a maximum of $62,130,000; (c) the Company has affirmatively elected in writing
to terminate this Agreement; (d) the Escrow Agent shall have provided to each state securities
department in which the Company has registered its securities for sale an affidavit stating that
the foregoing requirements (a), (b) and (c) of this subsection 7C have been satisfied; and (e) the
state securities commissioners have consented to release of the funds on deposit, 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. 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 the Deposited 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 herein on or before the Termination Date, 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: (a) the sum which each purchaser
initially paid in on account of purchases of the Units in the Offering and (b) each purchaser’s
portion of the total interest earned on the Escrow Account as of the Termination Date, (c) reduced
by the transaction fees provided in paragraph 10 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 without any further liability of the purchasers or
any of them to pay for the Units purchased. 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, and the Units reserved (as provided in
paragraph 5) shall be released from such reservation, 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.
8. Agreement with Escrow Agent. To induce Escrow Agent to act hereunder, it is agreed
by E Energy Xxxxx that:
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A. The sole duty of the Escrow Agent, other than as herein specified, shall be to receive the
Escrow Funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall
be under no duty to determine whether E Energy Xxxxx is complying with the requirements of this
Agreement in tendering to the Escrow Agent said proceeds of the sale of said Units. The Escrow
Agent may conclusively rely upon and shall be protected in acting 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.
B. E Energy Xxxxx 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 in any way 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 E Energy Xxxxx. If a successor Escrow Agent is not
appointed within the 30-day period following such notice, Escrow Agent may petition any court of
competent jurisdiction to name a successor Escrow Agent. Any commercial banking institution or
trust company with which Escrow Agent may merge or consolidate, and any commercial banking
institution or trust company to which 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. In the event the Deposited Funds do not equal
or exceed the Minimum Escrow Deposit before the Termination Date the Escrow Agent shall be entitled
to a fee of $10.00 per purchaser, which fees shall be paid from interest on the escrow account only
and not from principal. The fee agreed upon in the event of termination of the escrow without the
required Minimum Escrow Deposit and the continued deposit of said escrow in the investment set
forth in paragraph 5 herein is intended as full consideration for the Escrow Agent’s services as
contemplated by this Agreement; provided, however, that in the event the Escrow
Agent renders any material service not contemplated in this Agreement or there is any assignment of
interest in the subject matter of this Agreement, or any material modification hereof; or if any
material controversy arises hereunder, or 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 and expenses,
including reasonable attorney’s fees, occasioned by any delay, controversy, litigation or event,
and the same shall be recoverable from E Energy Xxxxx, but not from the escrow account.
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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 Adams, Nebraska, 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:
Union Bank & Trust Company
0000 X. 00xx Xxxxxx
P.O. Box 82535
Lincoln, Nebraska 68501-2535
Attn: Xxxxxx Klostemeyer
0000 X. 00xx Xxxxxx
P.O. Box 82535
Lincoln, Nebraska 68501-2535
Attn: Xxxxxx Klostemeyer
If to E Energy Xxxxx:
E Energy Xxxxx Adams, LLC
000 Xxxx Xxxxxx
X.X. Xxx 00
Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
Fax: 000-000-0000
000 Xxxx Xxxxxx
X.X. Xxx 00
Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
Fax: 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: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (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 Nebraska, without giving effect
to the principles of conflict of laws thereof.
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
consent to the other parties hereto and any such 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.
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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 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.
17. 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.
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.
E ENERGY XXXXX: |
ESCROW AGENT | |||||
E ENERGY XXXXX, LLC |
UNION BANK & TRUST COMPANY | |||||
By:
|
By: | |||||
| Xxxx X. Xxxxxxxx, President | ||||||
| (print name) | ||||||
| Title: | ||||||
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