Exhibit 99.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made this 17th day of
January, 2005, by and between Green Plains Renewable Energy, Inc. a corporation
organized and existing under the laws of the State of Iowa, with its principal
offices at: 0000 Xxxxxx Xxx Xxxxx, Xxx Xxxxx, Xxxxxx, 00000, (hereinafter
"GPRE"), and The Security National Bank of Sioux City, Iowa, with its principal
offices in Sioux City, Iowa, as escrow agent (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, GPRE intends to offer at least three million, one hundred
ninety thousand (3,190,000) of its Common Shares with warrants attached to
purchase additional Shares in the future (the "Shares"), with a required minimum
investment of ten thousand dollars ($10,000) (one thousand [1000]) Shares per
investor with additional increments of five hundred (500) Shares per investor,
in an offering registered under the provisions of the Securities Act of 1933, as
amended (the "Offering");
WHEREAS, GPRE wishes to assure those who subscribe for Shares (the
"Subscriber") that the Subscribers' monies will be released to the GPRE (i) only
if and when not less than twenty nine million, six hundred, sixty seven thousand
dollars ($29,667,000) (the "Threshold Amount") in subscriptions, after deduction
of selling commissions, representing sufficient Shares to meet the Threshold
Amount, are accepted by GPRE from the sale of Shares; and (ii) the Escrow Agent
shall have received written confirmation from GPRE that GPRE has obtained a
written letter of commitment from one or more lending institutions to provide
GPRE with sufficient construction and start-up financing to carry out its
business plan; and (iii) there shall not be any legal orders prohibiting the
Offering or release of funds from escrow, or orders from the United States
Securities and Exchange Commission revoking the effectiveness of the
Registration Statement related to the Offering; and (iv) upon the direction of
GPRE;
WHEREAS, GPRE desires to provide for the safekeeping of the proceeds of
the Offering until such time as subscriptions for Shares totaling the Threshold
Amount (or such greater amount as the Company may direct in writing) have been
received, and a commitment letter for financing the construction of the ethanol
plant has been received by GPRE, and upon the direction of the Company, or until
such time as Escrow Agent is required to pay and return such proceeds to the
Subscribers upon the terms hereinafter provided.
WHEREAS, GPRE 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 Subscribers 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 Shares in the Offering (the "Subscription Proceeds")
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. The Security National Bank 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. 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
GPRE shall not become the property of GPRE or be subject to the debts of GPRE 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 from sales of Shares in the
Offering shall be delivered by GPRE to the Escrow Agent, within forty-eight
hours of the receipt thereof from Subscribers, 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 Subscriber, the
number of Shares purchased, 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. As the proceeds of each sale are
deposited with the Escrow Agent, GPRE shall reserve the number of Shares
confirmed to the Subscriber thereof in connection with such sale.
5. Investment of Escrow Account. The Deposited Funds shall be credited
by 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 the
Xxxxxxx Xxxxx Financial Square Government Fund (CUSIP#00000X000) (the "Fund") at
Escrow Agent to yield rates of return as set forth in the Fund's prospectus. Any
interest income received by Escrow Agent from the fund shall be reinvested and
shall become part of the Deposited Funds. Escrow Agent shall pay interest on
termination of this Agreement as provided in paragraphs 7 and 10 hereof.
6. Termination of Escrow. This Agreement and the escrow created
hereunder shall be terminated at the earlier of the time provided in paragraph 7
hereof or November 29, 2005 (the "Termination Date") and in the manner provided
in paragraph 7 hereof.
7. Disposition of Deposited Funds. The Escrow Agent shall have the
following duties and obligations under this Agreement:
A. Notices. The Escrow Agent shall send a written notice
acknowledging the receipt of the Deposited Funds every seven days to GPRE. The
Escrow Agent shall give GPRE prompt written notice when the Deposited Funds
total $15 million, $20 million, and $25 million.
B. Disbursement of Escrow Funds. At the time (and in the
event) that: (a) the Deposited Funds shall, during the term of this Agreement,
equal $29.667 million in Subscription Proceeds (exclusive of interest and after
deduction of selling commissions,) (the "Minimum Escrow Deposit"); (b) the
Escrow Agent shall have received written confirmation from GPRE that GPRE has
obtained a written letter of commitment from one or more lending institutions
that will provide GPRE with sufficient construction and start-up financing to
carry out its business plan; and (c) the Escrow Agent shall have received
written confirmation from GPRE that GPRE's Board of Directors has resolved to
terminate this Agreement, then this Agreement shall terminate, and the Escrow
Agent shall promptly disburse the funds on deposit, including interest, to GPRE
to be used in accordance with the provisions set out in GPRE's Prospectus which
will be used in the Offering. GPRE will deliver a copy of its 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.
C. Return of Deposited Funds. In the event the Deposited 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, 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 Subscriber initially paid in on
account of purchases of the Shares in the Offering and (b) any interest earned
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will be paid to GPRE. 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 Shares reserved (as provided in paragraph 4) shall be released from such
reservation.
8. Agreement with Escrow Agent. To induce the Escrow Agent to act
hereunder, it is agreed by GPRE that:
A. The sole duty of the Escrow Agent, other than as herein
specified, shall be to receive the Deposited Funds and hold them subject to
release, in accordance herewith, and the Escrow Agent shall be under no duty to
determine whether GPRE is complying with requirements of this Agreement in
tendering to the Escrow Agent said proceeds of the sale of said Shares. 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
and shall be reimbursed for any legal fees related thereto.
B. GPRE 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 GPRE. 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 parties acknowledge that
Escrow Agent shall seek and obtain its fee for the services contemplated by this
Agreement from the Fund's provider, Xxxxxxx Xxxxx. Such fee is expected to equal
ten basis points of the Fund's return. These amounts to be collected from
Xxxxxxx Sachs by Escrow Agent are 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 GPRE, 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
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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: The Security National Bank
Attn: Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
If to (Company): Green Plains Renewable Energy, Inc.
Attn: Xxxxx Xxxxxxxxx
0000 Xxxxxx Xxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Fax: (000) 000-0000
With a required copy to: Xxxx X. Xxxxxxxx
XXXXXXXXX & XXXXX, XX
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
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
Iowa.
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.
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.
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18. Paragraph Headings. The paragraph 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.
COMPANY:
GREEN PLAINS RENEWABLE ENERGY, INC.
BY: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
ITS: President
ESCROW AGENT:
THE SECURITY NATIONAL BANK OF SIOUX CITY,
IOWA
BY: /s/ Xxx Xxxxxxxx
-----------------------------------------
ITS: Senior Vice President
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