ESCROW AGREEMENT
Exhibit
4.3
PART I
THIS ESCROW AGREEMENT PART I (this “Agreement” or “Escrow Agreement Part I”) is made
this
day of , 2007, by and between Amaizing Energy Holding Company, LLC, an Iowa
limited liability company (the “Company”), Xxxxx Xxxxx Financial Services Corporation, a Nebraska
corporation and registered broker dealer (SHFSC) and Bank Iowa
and The Security National Bank of Sioux City, Iowa, as
escrow agent (the “Escrow Agent”).
W I T N E S S E T H:
WHEREAS, the Company proposes to offer a minimum of and a maximum of of
its Membership Units (the “Units”) at a price of $ per Unit, in minimum blocks of
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 (the “Commission”) and various states, including, without limitation, the states of
Illinois, Indiana, Iowa, Kansas, Nebraska, New York, Missouri, South Dakota, and Wisconsin, and
potentially pursuant to exemptions in other states;
WHEREAS, SHFSC has been engaged by the Company to sell the Units to retail purchasers pursuant
to a Placement Agent Agreement dated October 3, 2007;
WHEREAS, SHFSC intends to sell the units as the Company’s agent on a minimum maximum on a
best-efforts basis in a public offering (the “Offering”).
WHEREAS, the Company and SHFSC desire to establish an escrow account in which funds received
from subscribers will be deposited pending completion of the escrow period.
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 (collectively referred to herein as the
“Subscribers” or individually referred to herein as a “Subscriber”) 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 in accordance with the terms of this
Agreement; and
WHEREAS, the Company intends to use this Escrow Agreement Part I for subscription proceeds of
approximately $40,000,000 to capitalize the construction of the Company’s Atlantic, Iowa ethanol
facility and to use Escrow Agreement Part II, also by and between the Company and the Escrow Agent,
for subscription proceeds raised after Escrow Agreement Part I is terminated to capitalize the
construction of the Company’s Denison, Iowa ethanol plant expansion project.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and for
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other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the
parties agree as follows:
1. Acceptance
of Appointment. Escrow Agent 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 Subscribers 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 Subscribers.
4. Deposit of Proceeds. All proceeds and notes from subscriptions in the Offering
accepted by the Company shall be delivered by the Company or by SHFSC to the Escrow Agent, within
five (5) business days of the Company’s 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 Subscriber, 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. SHFSC shall promptly transmit to the Escrow Agent upon
receipt any and all checks, drafts, and money orders received from prospective purchasers of Units
together with a copy of the executed Subscription Agreement. In transmitting such checks, drafts,
orders and Subscription Agreements, to the Escrow Agent, SHFSC shall provide a notice to the
Company stating among other things, the name of the purchaser, current address, the date of the
Subscription Agreement and the amount of the investment to the Company, on either the day of
receipt or before noon of the day after receipt, for the purpose of obtaining the Company’s
acceptance of the Subscription Agreement and upon such acceptance for transmittal of such checks,
drafts, money orders.
5. Investment of Escrow Funds. 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 deposit accounts, bank money market accounts, bank certificates of deposit, short term
Federal Government Obligations or obligations issued and/or guaranteed as to principal and interest
by agencies or instrumentalities of the U.S. Government, or such other securities as may be
permitted by the Financial Industry Regulatory Authority (FINRA) pursuant to NASD Notices to
Members 84-7, 87-64, 87-61, 98-4 and any subsequent notices issued by FINRA, or No Action Letters
or interpretations regarding the investment of subscription proceeds in public or private offerings
subject to Rule 10b-9 and 15c2-4 under the Securities Exchange Act of 1934. Any interest
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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, which is one
year and one day following the date upon which the Commission authorizes the Offering (the
“Offering Effective Date”) or later if the Commission, upon the request of the Company, extends the
effectiveness of the Offering beyond the initial one year and one day period of effectiveness (the
“Termination Date”); provided, however, that if prior to the Termination Date, the Company has
accepted subscriptions for Units equal to the Minimum Escrow Deposit, 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 and SHFSC 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 and SHFSC prompt written notice when the
Escrow Funds, exclusive of interest, equal or exceed ten percent (10%) of the Minimum Escrow
Deposit, which is defined below. (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 and SHFSC prompt written
notice when the Escrow Funds, exclusive of interest, equal or exceed the Minimum Escrow
Deposit.
C. The Escrow Funds shall only be disbursed to the Company in the event that each and
every condition of this paragraph shall have been met. At the time that: (a) the Escrow
Funds, exclusive of interest, equal or exceed $40,000,000 (the “Minimum Escrow Deposit”);
(b) the Escrow Agent shall have received written confirmation from the Company and SHFSC
that the Company has affirmatively elected in writing to terminate this Agreement; (c) the
Escrow Agent shall have provided to SHFSC and each state securities department in which the
Company has registered its securities, as communicated to the Escrow Agent by the Company,
an affidavit stating that the requirements of this Subsection 7.C to Escrow Agreement Part I
have been satisfied; (d) in each state in which consent is required, the state securities
commissioners have consented to release of the funds on deposit, and, (e) SHFSC has
provided to the Escrow Agent and the Company a written notice that SHFSC approves of the
release of the Escrow Funds to the Company, 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
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responsibilities under this Escrow Agreement Part I.
D. In the event the Escrow Funds do not equal or exceed the Minimum Escrow Deposit 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. 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. In the event the Company offers its Subscribers the right to withdraw and terminate
their subscription agreements pursuant to a rescission offer (“Rescission Offer”) the Escrow
Agent shall return to each rescinding Subscriber, as promptly as possible on the basis of
its records pertaining to the Escrow Account: (a) the sum which each rescinding Subscriber
initially paid in on account of subscriptions for the Units in the Offering and (b) each
rescinding Subscriber’s portion of the total interest earned on the Escrow Account as of the
Termination Date. Computation of any rescinding Subscriber’s share of the net interest
earned will be a weighted average based on the proportion of such rescinding Subscriber’s
deposit in the Escrow Account from the Offering to all such Subscribers’ 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 rescinding
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 rescinding
Subscriber pursuant to this paragraph shall be deemed to be the property of such rescinding
Subscriber, 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
rescinding Subscribers or any of them to pay for the Units. At such time as the Escrow
Agent shall have made all the payments called for in this paragraph, the Escrow Agent shall
continue to be bound by the other provisions of this Agreement, except that Escrow Agent
shall be required to prepare and issue a single IRS Form 1099 to each rescinding Subscriber.
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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 notice of the Securities and Exchange Commission’s declaration of effectiveness. The
Escrow Agent will have no responsibility to examine the Registration Statement with regard
to the Escrow Account or otherwise.
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 by the Company and not from interest on the Escrow
Account or from the principal. The Company shall be solely responsible for the payment of such
fees, and the Escrow
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Agent shall not seek payment of the fees from SHFSC or subscribers or apply any interest or
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 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 Denison, Iowa, 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:
Security
National Bank of Sioux City, Iowa
Attn: Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attn: Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
If to the Company:
Amaizing Energy Holding Company, LLC
0000 Xxxx Xxxxxxx 00
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx, CEO
Fax: (000) 000-0000
Phone: (000) 000-0000
0000 Xxxx Xxxxxxx 00
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx, CEO
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: Xxxxxxxxx Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
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If to SHFSC:
Xxxxxx Xxxxxx, or President
XXXXX XXXXX FINANCIAL SECURITIES CORPORATION
Xxxxx 000
Xxxxxx Xxxxxxx
0000 X Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (402)
Phone: (000) 000-0000
XXXXX XXXXX FINANCIAL SECURITIES CORPORATION
Xxxxx 000
Xxxxxx Xxxxxxx
0000 X Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (402)
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 Iowa, 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
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 Account.
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.
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19. Counterparts. This Escrow Agreement Part I 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: | |||||||
| AMAIZING ENERGY HOLDING | BANK IOWA | |||||||
| COMPANY, LLC | ||||||||
| By: | By: | |||||||
Xxx Xxxxxxx, CEO |
Xxxxx
Xxxx |
|||||||
| Its: | President | |||||||
| SHFSC | ||||||||
| XXXXX XXXXX FINANCIAL SECUITIES CORPORATION | SECURITY NATIONAL BANK | |||||||
| By: | By: | |||||||
Xxxx Xxxxx, President |
Xxx
Xxxxxxxx |
|||||||
| Its: | Senior Vice President & Trust Officer | |||||||
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EXHIIBT A
[Attach Escrow Agent’s Fee Schedule]
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