Document:

exhibit42_111810.htm

Exhibit “4.2” Initial Warrant

 

AS OF THE DATE HEREOF, THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  ANY SECURITIES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.

 

WARRANT FOR THE PURCHASE OF SHARES

DATED: DECEMBER 1, 2009

 

THIS WARRANT (“Warrant”) is issued to 2309 Holdings, LLC (“Holder”) by Bigelow Income Properties, LLC, a Missouri limited liability company (“Company”) as of December 1, 2009 in connection with and pursuant to the terms of the Operating Agreement of the Company also dated December 1, 2009 (“Operating Agreement”).

 

This certifies that, for value received, the receipt and sufficiency of which is hereby acknowledged, Holder is entitled, subject to the terms and conditions set forth below, to purchase from the Company up to Five Million (5,000,000) Company Shares (“Warrant Shares”) at an exercise price (“Exercise Price”) of $0.0001 per share, as adjusted from time to time pursuant to Section 11 hereof.  The exact number of Warrant Shares and Exercise Price of such Shares are subject to the terms hereof and all references to “Warrant Shares” and “Exercise Price” herein shall be deemed to include any such adjustment or series of adjustments.  The term “Warrant” as used herein shall mean this Warrant, and any warrants delivered in substitution or exchange therefor as provided herein.  All capitalized terms not otherwise defined herein shall have the meanings assigned thereto in the Operating Agreement.

 

1.           Term of Warrant.  Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time after the issuance hereof (“Exercise Period”).

 

2.           Number of Shares, Exercise Price.

 

(a)           The exact number of Warrant Shares exercisable at any time shall be an amount equal to the quotient derived by dividing (i) the total dollar value of equity capital raised by the Company from time to time (including the fair market value of contributions in-kind) by (ii) Two Hundred Forty Dollars ($240.00); provided, however, upon the occurrence of any event whereby the Company (A) becomes authorized to engage in leveraged acquisitions and incur any debt for the acquisition of Company assets that is not necessary for timing purposes and will not be retired as soon as practicable by the issuance of additional Shares or (B) terminates either agreement contemplated by Section 2.08 of the Operating Agreement, the Holder shall automatically have the right to immediately purchase all or any part of 5,000,000 Warrant Shares at the then current Exercise Price.

 

(b)           The Exercise Price at which this Warrant may be exercised shall be $0.0001 per Share, which price is based on the total current fair market value of the Company divided by the maximum number of Warrant Shares.

 

3.           Exercise of Warrant.

 

(a)           Cash Exercise.  This Warrant may be exercised by the Holder in whole or in part by (i) the delivery of a Notice of Exercise in the form annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company (or at such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company) during the Exercise Period and (ii) the delivery of payment to the Company, for the account of the Company, by cash, cancellation of indebtedness, wire transfer of immediately available funds to a bank account specified by the Company, or by certified or bank cashier’s check, of the Exercise Price for the number of Warrant Shares specified in the Exercise Form in lawful money of the United States of America.  The Company agrees that such Warrant Shares shall be deemed to be issued to the Holder as the record holder of such Warrant Shares as of the close of business on the date on which the foregoing are delivered.  Confirmation that a book entry has been entered reflecting the issuance of the appropriate number of Warrant Shares to Holder shall be sent to Holder as promptly as practicable, and in any event within ten

 

  

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(10) days, thereafter.  If this Warrant shall have been exercised only in part, the remaining number of Warrant Shares shall still be available pursuant to the terms hereof.

 

4.           This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of the delivery of all required documentation and consideration as provided above, and the Holder shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date.  No payments or accruals shall be made in connection with Warrant Shares issuable on the exercise of this Warrant for any cash dividends paid or payable to holders of record of Shares prior to the date on which the Holder shall be deemed to be the record holder of such Warrant Shares. No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.

 

5.           Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

6.           Rights of Shareholders.  Subject to Sections 9 and 11 of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed, in and of itself, to confer upon (or take away from) the Holder, as such, any of the rights of a Shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to Shareholders at any meeting thereof, or to give or withhold consent to any action or to receive notice of meetings, or to receive dividends or subscription rights or otherwise unless and until all or part of the Warrant shall have been exercised properly as provided herein.

 

7.           Transfer of Warrant.

 

(a)           Non-Transferability and Non-Negotiability of Warrant.  This Warrant may not be transferred or assigned in whole or in part except as provided in the Operating Agreement without the prior written consent of the Company.

 

(b)           Compliance with Securities Laws.

 

(i)           The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Shares to be issued upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the 1933 Act or any applicable state securities laws.  Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Shares so purchased are being acquired solely for the Holder’s own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale.

 

(ii)           To the extent applicable, this Warrant and all Shares issuable upon the exercise hereof shall be subject to the following (in addition to any other restrictions required by state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.

 

  

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(iii)           Notwithstanding the foregoing, if not already done, as soon as practicable after the issuance of any of the Warrant Shares, the Company will cause such Shares to be registered pursuant to all applicable securities laws and listed on a nationally recognized exchange.  At such time all applicable restrictions set forth herein shall be removed, and such Shares shall be held free and clear of any restrictions by virtue of this Warrant.

 

8.           Reservation of Stock.  The Company may but shall not be required to issue, reserve, register or list any Shares issuable pursuant to this Warrant unless and until this Warrant is properly exercised in whole or in part.  In such case, if not already done, an appropriate number of Shares shall be issued, registered and listed on an exchange reasonably acceptable to Holder.  The Company covenants that all Shares that are issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price, all as set forth herein, will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing and accounting for Shares to make such book entries as may be required upon exercise of all or any part of the Warrant.

 

9.           Notices.  Notice shall be given to the Holder by the Company upon the happening of any of the following:

 

(a)           At the end of each calendar quarter in which the Company receives equity capital, the Company shall provide Holder a written notice that includes the following: (i) the amount of capital received, including the fair market value of contributions in-kind, (ii) the cumulative amount of capital received by the Company through the end of such calendar quarter, including the fair market value of contributions in-kind,  and (iii) the number of Shares shown on the books of the Company as owned by the Holder at the end of such calendar quarter.

 

(b)           Whenever the Exercise Price or number of Shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by a Manager of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant.

 

(c)           In case:

 

(i)           the Company shall take a record of the holders of its Shares (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right;

 

(ii)           of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another entity, or any conveyance of all or substantially all of the assets of the Company to another entity;

 

(iii)           of any dissolution, liquidation or winding-up of the Company;

 

(iv)           of any redemption or conversion of any or all outstanding Shares; or

 

(v)           of the filing of any registration statement with the U.S. Securities and Exchange Commission (the “SEC”);

 

then, and in each such case, the Company will mail or cause to be mailed to the Holder a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, (B) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Shares shall be entitled to

 

  

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exchange their Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, or (C) the anticipated date on which the Company expects its first registration statement with the SEC to become effective.  Such notice shall be mailed at least fifteen (15) days prior to the date therein specified.

 

(d)         All such notices, advices and communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the third (3rd) business day following the date of such mailing if sent to a United States address and on the tenth (10th) business day following the date of such mailing if sent to an address outside the United States.

 

10.         Amendments. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

11.         Adjustments.  The Exercise Price and the number of Shares purchasable hereunder are subject to adjustment from time to time as follows:

 

(a)          Reclassification, etc.  If the Company, at any time while this Warrant, or any portion thereof, remains outstanding and unexpired by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11.

 

(b)          Split, Subdivision or Combination of Shares.  If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, then (i) in the case of a split or subdivision, the Exercise Price for such securities shall be proportionately decreased and the securities issuable upon exercise of this Warrant shall be proportionately increased, and (ii) in the case of a combination, the Exercise Price for such securities shall be proportionately increased and the securities issuable upon exercise of this Warrant shall be proportionately decreased.

 

(c)           Adjustments for Dividends in Stock or Other Securities or Property.  If while this Warrant, or any portion hereof, remains outstanding and unexpired the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible shareholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 11.

 

(d)          Notice as to Adjustments.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 11, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.  The Company shall, upon the written request, at any time, of the Holder, furnish or cause to be furnished to the Holder a like certificate setting forth:  (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of Shares and the amount, if any, of other property that at the time would be received upon the exercise of the Warrant.

 

  

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(e)           No Impairment.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 11 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.

 

12.          Miscellaneous.

 

(a)           This Warrant shall be governed by the laws of the State of Missouri as applied to agreements entered into in the State of Missouri by and among residents of the State of Missouri.

 

(b)          This Warrant, together with all exhibits hereto and any other documents executed and delivered pursuant to the provisions hereof, contains the entire agreement of the parties hereto with respect to the subject matter hereof.  No representations, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect.  No modification or amendment hereof shall be binding unless contained in a written document executed by all parties.

 

(c)           The Company and Holder each warrant, represent and agree that execution of this Warrant, and any other documents executed or deliver pursuant to the provisions hereof, have been duly authorized by it, that this Warrant is duly executed by it and the obligations herein set forth are its valid and binding obligations enforceable in accordance with terms.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law; but if any provision of this Warrant, or any document executed and delivered pursuant hereto, shall be prohibited by or invalid under such law, such a provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant or any document executed and delivered pursuant hereto.

 

(d)           In the event of a dispute with regard to the interpretation of this Warrant, the prevailing party may collect the cost of attorney’s fees, litigation expenses or such other expenses as may be incurred in the enforcement of the prevailing party’s rights hereunder.

 

(e)           Except as may be otherwise specifically provided herein, this Warrant is not intended to create, nor shall it be in any way interpreted or construed to create, any third party beneficiary rights in any person not a party hereto.

 

(f)           Time is of the essence in performance of the parties’ respective obligations herein contained.

 

(g)          This Warrant shall be exercisable as provided for herein, except that in the event that the expiration date of this Warrant shall fall on a Saturday, Sunday and or United States federally recognized Holiday, this expiration date for this Warrant shall be extended to 5:00 p.m. Pacific standard time on the business day following such Saturday, Sunday or recognized Holiday.

 

(h)           The Company and Holder will promptly execute and deliver or cause to be executed and delivered all such other and further instruments, documents, information or assurances and promptly do or cause to be done all such other and further things, as may be necessary or reasonably required in order to allow the timely exercise of and/or vest further and more fully in the Holder all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon it by this Warrant or to otherwise effect the purposes of this Warrant.

 

  

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IN WITNESS WHEREOF, the parties have executed this Warrant as the date hereof.

 

 

	 	 	BIGELOW INCOME PROPERTIES, LLC	 
	 	 	By: 2309 Holdings, LLC, Sole Manager	 
	 	 	 	 
	 	 	By:     /s/ Charles Christian Kirley                                                                               	 
	 	 	Charles Christian Kirley, Sole Manager	 
	 	 	 	 
	 	 	“Company”	 
	 	 	 	 
	 	 	 	 
	 	 	

2309 HOLDINGS, LLC

	 
	 	 	 	 
	 	 	By:      /s/ Charles Christian Kirley  	 
	 	 	Charles Christian Kirley, Sole Manager	 
	 	 	 	 
	 	 	

“Holder”

	 

 

 

 

 

                                                                       

  

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NOTICE OF EXERCISE

 

To:  BIGELOW INCOME PROPERTIES, LLC

 

(1)           The undersigned hereby elects to purchase __________ Shares of Bigelow Income Properties, LLC, pursuant to the terms of that certain Warrant dated as of December 1, 2009, and tenders herewith payment of the purchase price for such Shares in full.

 

(2)           In connection with this exercise of the Warrant, the undersigned hereby confirms and acknowledges that the Shares to be issued are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws.

 

(3)           Please cause an entry to be made on the books and records of the Company indicating that such Shares have been issued in the name of the undersigned.

 

(4)           Please issue a confirmation indicating (i) that the required entry has been made and (ii) the unexercised portion of the undersigned’s Warrant.

 

Dated:  _______________.

 

          2309 HOLDINGS, LLC

          By: _______________________________

          Name: _____________________________

          Title: ______________________________

 

       “Holder”

  

II-26exhibit101_111810.htm

Exhibit “10.1”  (Escrow Agreement (Subscription Proceeds) with UMB Bank, N.A.)

 

ESCROW AGREEMENT

(Subscription Proceeds)

This ESCROW AGREEMENT (“Agreement”) is dated as of _____________, 2010, by and between BIGELOW INCOME PROPERTIES, LLC (“Issuer”) and UMB BANK, N.A. as escrow agent (“Escrow Agent”).

R E C I T A L S:

 

A.           The Issuer intends to offer and sell in a public offering (“Stock Offering”) up to $50,000,000 of the Issuer’s common stock (“Shares”).  Unless terminated on December 31, 2011 for failure to sell $1,000,000 of Shares for cash or in-kind consideration or get the Shares listed on an exchange, the offering will remain open until December 31, 2012 (the date of the earliest of such events to occur shall be referred to herein as the “Termination Date”).  For purposes of hereof, the term “exchange” means any recognized securities market or regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities and is intended to include the OTC Bulletin Board and Pink Sheets.

 

B.           If the Company does not sell $1,000,000 of Shares for cash or in-kind consideration or get the Shares listed on an exchange prior to December 31, 2011, the Company will stop selling Shares, and each investor’s escrowed funds, including interest, will be returned within ten days.

 

C.           The terms of the Stock Offering are set forth in that certain S-11 registration statement and accompanying prospectus filed with the SEC under Registration No. 333-165876 (“Offering Documents”).  (All capitalized terms that are used herein and not otherwise defined in context shall have the meanings ascribed thereto in the Offering Documents.)

C.           The Shares will be sold pursuant to written Subscription Agreements in the form disclosed in the Offering Documents that are (i) executed by investors and, (ii) if deemed appropriate by Issuer’s management, accepted by the Issuer.

D.           In accordance with and subject to the terms and conditions of this Agreement, the Escrow Agent has agreed to accept and hold all subscription proceeds received directly or indirectly from investors pursuant to all Subscription Agreements that are received by Issuer from time to time prior to the Termination Date.

NOW, THEREFORE, the parties hereto agree as follows:

1.           Appointment of Escrow Agent. The Issuer hereby appoints Escrow Agent, and Escrow Agent accepts such appointment, to act as Escrow Agent in accordance with this Agreement.

2.           Subscription Proceeds to be Placed in Escrow.

(a)           There is hereby created and ordered to be established in the custody of the Escrow Agent a special subscription proceeds escrow (“Subscription Proceeds Escrow”).  The Subscription Proceeds Escrow account will be a segregated account and will be held in trust for each investor’s benefit pending (i) release to the Issuer for investment or (ii) return to the investor in accordance with the terms hereof.

(b)           All subscription proceeds received by the Issuer shall be delivered to the Escrow Agent (clearly identified as such to the Escrow Agent) as promptly as practicable after the Issuer receives such subscription proceeds.  Each deposit of subscription proceeds with the Escrow Agent shall be accompanied by a copy of the executed Subscription Agreement with respect to each investor for whom subscription proceeds are being deposited and a fully completed and executed Form W-9 Request for Taxpayer

  

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Identification Number and Certification of each investor, as provided in Section 3.  All subscription proceeds received by the Escrow Agent shall be deposited into the Subscription Proceeds Escrow.

(c)           The subscription proceeds held in the Subscription Proceeds Escrow shall be invested in liquid Government securities backed by the full faith and credit of the United States Government and/or cash items at a federally insured commercial bank (which may be Escrow Agent), subject to the Escrow Agent’s sweep charge of .____%.  During the period in which subscription proceeds are held in escrow, interest earned thereon will be allocated among subscribers entitled thereto on the basis of the respective amounts of their subscriptions and the number of days that such amounts were on deposit. The Escrow Agent shall not be responsible for any income on the Subscription Proceeds Escrow, other than accounting for income from the investment of moneys pursuant to this Subsection (c). The Escrow Agent shall not be liable for any loss on investments made pursuant to the provisions of this Subsection (c).

(d)           The subscription proceeds and all interest thereon shall be held by the Escrow Agent in the Subscription Proceeds Escrow until distributed as provided in this Agreement.

(e)           Based solely upon the information set forth in the Subscription Agreements delivered pursuant to Section 3, the Escrow Agent shall keep and maintain a record of (i) the subscription proceeds deposited by each investor into the Subscription Proceeds Escrow from time to time, (ii) the interest, if any, earned on the subscription proceeds deposited by each investor into the Subscription Proceeds Escrow from time to time and (iii) the total amounts of subscription proceeds and interest thereon held in the Subscription Proceeds Escrow for each investor until the distributions under paragraph 4 below are made.  The registration books maintained by the Escrow Agent shall be the official record of the total amounts of subscription proceeds and interest held in the Subscription Proceeds Escrow and each investor’s share of such amounts.

(f)           All profit and loss associated with the subscription proceeds and interest held in the Subscription Proceeds Escrow from time to time will be allocated to the respective investors who deposited the subscription proceeds in accordance with the records maintained by the Escrow Agent pursuant to paragraph 2(e) above.  The Escrow Agent’s determination with respect thereto shall be final and binding upon all parties interested.

(g)           By the fifteenth day of each month during the term hereof, the Escrow Agent shall provide to the Issuer a report that details the deposits, interest on and disbursements from the Subscription Proceeds Escrow during the preceding calendar month.  Upon request and payment of the costs associated therewith, the Escrow Agent shall provide to a requesting investor a report that details the deposits, interest on and disbursements from the Subscription Proceeds Escrow that relate to the requesting investor.

3.           Identity of investors, Ownership of Proceeds.  The Issuer shall furnish to the Escrow Agent, with each delivery of subscription proceeds as provided in paragraph 2, above, a copy of each Subscription Agreement (which shall set forth, among other things, the name and address of the investor and the amount subscribed) tendered by the investors who have made the payments included in the subscription proceeds delivered and accepted by Issuer, in each case accompanied by a fully completed Form W-9, Request for Taxpayer Identification Number and Certification, executed by the investor.  The Escrow Agent shall not be required to accept any subscription proceeds that are not accompanied by said Subscription Agreement and Form W-9.  Until released to the Issuer pursuant to the terms hereof, all subscription proceeds shall be and remain the property of the respective investors and shall not be subject to any liens or charges by the Issuer or against the Issuer, or to judgments or creditors’ claims against the Issuer.

4.           Disbursements from the Subscription Proceeds Escrow.  Amounts in the Subscription Proceeds Escrow will be held and disbursed in accordance with the following:

(a)           The Issuer will accept or reject subscriptions within thirty (30) days after the Issuer receives them. If an investor’s subscription agreement is rejected, the Issuer will notify the Escrow Agent and such investor’s funds (including interest, to the extent earned and if such funds have been held for more than thirty-five (35) days) will be returned within ten business days after the date of such rejection.

  

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(b)           If an investor’s subscription is accepted, the Issuer will notify the Escrow Agent and the amount delivered with such subscription will continue to be held in the Subscription Proceeds Escrow until either (i) the Issuer notifies the Escrow Agent that the Issuer has sold $1,000,000 worth of Shares for cash or in-kind consideration and has caused the Shares to be listed on an exchange on or before December 31, 2011 or (ii) the Issuer shall fail to so advise the Escrow Agent, in which case, December 31, 2011 shall be deemed to be the Termination Date.

(c)           If December 31, 2011 shall be deemed to be the Termination Date, each investor’s escrowed funds, including interest, will be returned within ten days after the Termination Date.

(d)           If the Issuer notifies the Escrow Agent that the Issuer has sold $1,000,000 worth of Shares for cash or in-kind consideration and has caused the Shares to be listed on an exchange on or before December 31, 2011, the subscription amount for each investor whose subscription has been accepted (and notice thereof given to the Escrow Agent) shall be delivered promptly to Issuer. Since fractional Shares will not be issued, any interest earned on subscription amounts held in the Subscription Proceeds Escrow for more than thirty-five (35) days will be returned to individual investors at the time that each investor’s subscription amount is delivered to the Issuer.

(e)           If not fully subscribed before such time, the offering will terminate on December 31, 2012, and any amounts remaining in the Subscription Proceeds Escrow at that time will be returned to respective investors or delivered to the Issuer in accordance with the terms hereof.  No further deposits to the Subscription Proceeds Escrow will be accepted after December 31, 2012.

(f)           Notwithstanding the foregoing, in the event that a subscriber has failed to remit an executed and valid IRS Form W-9 to the Escrow Agent prior to the date the subscriber’s funds are to be returned, the Escrow Agent will withhold from such funds thirty percent (30%) of the earnings attributable to such subscriber in accordance with applicable Treasury regulations.

(g)           Subscription agreements are non-cancelable, and except as provided herein, subscription funds are non-refundable for any reason.

 

5.           Term.  This Agreement shall terminate upon the disbursement of all of the subscription proceeds and the final performance of all of the Escrow Agent’s other duties hereunder.

6.           Duties and Responsibilities of Escrow Agent.

(a)           Escrow Agent, by signing this Agreement, agrees to accept, hold and dispose of the subscription proceeds in accordance with the terms hereof.  The duties and responsibilities of Escrow Agent shall be limited to those expressly set forth in this Agreement, and no implied covenants or duties shall be read into this Agreement against the Escrow Agent, and the Escrow Agent shall not be subject to, nor obligated to comply with or to recognize, any other agreement between, or any direction or instruction of, any or all of the other parties thereto even though reference thereto may be made herein; provided, however, with the written consent of Escrow Agent, this Agreement may be amended at any time or times by an instrument in writing signed by the Issuer and the Escrow Agent. The Escrow Agent shall be under no liability to anyone by reason of any failure on the part of Issuer or any investor or any maker, endorser or other signatory of any document or other person to perform such person’s obligations under any such document.

(b)           Escrow Agent is authorized to disregard any and all notices or instructions given by any person, firm or corporation, except such notices and instructions as are herein specifically provided for and orders or process of any court duly entered.  If any property subject hereto is at any time attached, garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, writ, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then

  

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and in any of such events, Escrow Agent is authorized to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel of its own choosing is binding upon it; and if Escrow Agent complies in good faith with any such order, writ, judgment or decree it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

(c)           Escrow Agent shall not be liable for any act taken or omitted hereunder if taken or omitted by Escrow Agent in good faith and in the exercise of its own reasonable judgment, and Escrow Agent shall not be liable under this Agreement except for its gross negligence or willful misconduct.  Escrow Agent also shall be fully protected in relying upon any written notice (including specifically those provided for in paragraphs 4(a), 4(b) and 4(d), demand, certificate, waiver, opinion of counsel (including counsel chosen by the Escrow Agent) or other document which it in good faith believes to be genuine or what it purports to be.

(d)           Escrow Agent acts hereunder as a depository only and shall not be responsible for the sufficiency or accuracy or the form, execution, validity or genuineness of this Agreement (except as to its own execution hereof and obligations hereunder, if this Agreement is otherwise valid) or of documents or securities now or hereafter deposited hereunder or of any endorsement thereon, or for lack of endorsement thereon, or for any description therein, or for the adequacy of the subscription proceeds for their intended purposes, nor shall it be responsible or liable in any respect on the account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such document, security or endorsement under this Agreement.

(e)           Escrow Agent may consult with legal counsel (which may be counsel to the Issuer) in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the opinion or instructions of such counsel.

(f)           The Issuer agrees to indemnify and save Escrow Agent harmless from all losses, costs, liabilities, damages, fees and expenses (including, but not limited to, reasonable attorney's fees and expenses) suffered or incurred by Escrow Agent arising from the performance of its obligations under this Agreement ("Acts"), except such Acts as arise from the grossly negligent or fraudulent acts or omissions of Escrow Agent. The Escrow Agent shall be under no obligations to institute or defend any action, suit, or legal proceeding in connection herewith, unless first indemnified and held harmless to its satisfaction in accordance with the foregoing.  Such indemnity shall survive the termination or discharge of this Agreement or resignation of the Escrow Agent.

(g)           In the event of any disagreement between the parties hereto (or any other persons) resulting in adverse claims and demands being made in connection with or for any portion of the subscription proceeds and any interest thereon, Escrow Agent shall be entitled to refuse to comply with any demand or claim, as long as such disagreement shall continue, and in so refusing to make any delivery or other disposition of any portion of the subscription proceeds and any interest thereon, Escrow Agent shall not be or become liable to any party hereto or to any other person for its refusal to comply with such conflicting or adverse demands, and Escrow Agent shall be entitled to refuse and refrain to act until:

(i)           The rights of the adverse claimants shall have been fully and finally adjudicated in a court assuming and having jurisdiction in respect of the portion of the persons and the portion of the subscription proceeds involved; or

(ii)           All differences shall have been resolved by agreement and Escrow Agent shall have been notified of such agreement in a writing signed by all the interested parties.

 

(h)           Escrow Agent may resign at any time from its obligations under this Agreement by providing written notice to the Issuer.  Such resignation shall be effective not less than thirty (30) days after such written notice has been delivered.  Escrow Agent shall have no responsibility for the appointment of a 

  

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successor escrow agent. Upon the effective date of such resignation or removal all cash and other payments and all other property then held by the Escrow Agent hereunder shall be delivered by it to such successor Escrow Agent as may be designated in writing by the Transaction Parties, whereupon the Escrow Agent's obligations hereunder shall cease and terminate.

(i)           In the event of resignation of Escrow Agent, a successor escrow agent shall be appointed as soon as practicable by the Issuer.  Should such successor not be appointed within thirty (30) days after Escrow Agent shall have delivered notice of its resignation, all obligations of the Escrow Agent hereunder shall, nevertheless, cease and terminate, and the Escrow Agent’s sole responsibility thereafter shall be to keep all property then held by it and to deliver the same to a person designated in writing by the Issuer or in accordance with the directions of a final order or judgment of a court of competent jurisdiction.  Further, if no such successor Escrow Agent has been designated by such date, the resigning or removed Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor agent; further the resigning or removed Escrow Agent may pay into court all monies and property deposited with Escrow Agent under this Agreement.

7.           Miscellaneous.

a.           Entire Agreement.  This Agreement sets forth the entire understanding of the parties hereto and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof.  No amendments or modifications to this Agreement shall be binding unless made in writing and signed by the Issuer and the Escrow Agent.

b.           Notices.  Any notices to be given hereunder by any party to any other party shall be in writing and shall be made either by personal delivery, certified, or registered mail (postage prepaid and return receipt requested) or private overnight courier service.  Each notice shall be effective only upon receipt, and shall be addressed as follows:

 

 

	 	To the Issuer: 	Bigelow Income Properties, LLC	 
	 	 	4801 Main, Suite 1000	 
	 	 	Attn:  Mr. Charles Christian Kirley	 
	 	 	Telephone No: 816-983-8000	 
	 	 	Telecopier No: 816-983-8080	 
	 	 	 	 
	 	To Escrow Agent:	UMB Bank, N.A.	 
	 	 	Attention:   Corporate Trust Department	 
	 	 	1010 Grand Blvd, 4th Floor	 
	 	 	Kansas City, Missouri 64106	 
	 	 	Telephone No: 816- 860-3248	 
	 	 	Telecopier No: 816-860-3029	 

              

Any party may change its address for notice by giving notice in accordance with the terms of this paragraph 7.

c.           Fees.  All Escrow Agent's fees and charges hereunder shall be as set forth in Exhibit “A” hereto and shall be promptly paid, along with the reasonable expenses of Escrow Agent (including, without limitation, reasonable attorney’s fees and expenses), by the Issuer; provided, however, that Escrow Agent is entitled to withhold and deduct any and all unpaid fees and expenses prior to the final disbursement of the subscription proceeds under paragraph 4(d) or paragraph 4(e). The fees and charges agreed to be paid are intended as full compensation for Escrow Agent’s services as contemplated by this Agreement; however, if the conditions of this Agreement are not fulfilled or Escrow Agent renders any service not contemplated in this Agreement, or any modification hereof, or if any controversy arises hereunder, Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including, without limitation, reasonable attorney's fees and expenses, occasioned by any question, uncertainty, delay, controversy, litigation or event, and the same may be recoverable from the Issuer.

  

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d.         Waiver.  The waiver by any party hereto of a breach of any term or provision of this Agreement shall not operate or be construed as a waiver of (a) a subsequent breach of the same provision by any party or (b) the breach of any other term or provision of this Agreement.

e.          Binding Effect.  This Agreement shall extend to and be binding upon and inure to the benefit of the parties hereto, their respective heirs, representatives, successors and assigns.  This Agreement may not be assigned.

f.           No Third Party Beneficiaries.  Except for the investors, this Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement.

g.          Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom.  Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added as a part of this Agreement a legal, valid, and enforceable provision, such as is approved by Issuer and Escrow Agent, as similar in terms to such illegal, invalid or unenforceable provision.

h.          Headings.  The headings in this Agreement are solely for convenience of reference and shall be given no effect in construction or interpretation of this Agreement.

i.           Counterparts: Governing Law.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action, or suit in the appropriate court of law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri without regard to its rules of conflicts of laws.

j.           Cooperation.  No party shall unreasonably withhold or delay its consent, approval or signature when required to fulfill the purposes of this Agreement.

k.           Earnings Allocation; Tax Matters; Patriot Act Compliance.  The Issuer agrees to provide (and cause investors to provide) the Escrow Agent completed Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Escrow Agent may reasonably request (collectively, "Tax Reporting Documentation") at the time of execution of this Agreement and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time. The Issuer understands that if such Tax Reporting Documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code, as it may be amended from time to time, to withhold a portion of any interest or other income earned on the investment of monies or other property held by the Escrow Agent pursuant to this Escrow Agreement.

[Signature Page Follows]

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

 

 

	 	 	ISSUER:	 
	 	 	 	 
	 	 	 	 
	 	 	BIGELOW INCOME PROPERTIES, LLC,	 
	 	 	a Missouri limited liability company	 
	 	 	 	 
	 	 	 	 
	 	 	By:      2309 HOLDINGS, LLC,	 
	 	 	    a Missouri limited liability company,	 
	 	 	    Sole Member and Manager	 
	 	 	 	 
	 	 	    By: ____________________________	 
	 	 	       Charles Christian Kirley,	 
	 	 	       Sole Member and Manager	 
	 	 	 	 
	 	 	 	 
	 	 	ESCROW AGENT:	 
	 	 	 	 
	 	 	 	 
	 	 	UMB BANK, N.A.	 
	 	 	 	 
	 	 	By:                 	 
	 	 	 	 
	 	 	Name:                	 
	 	 	 	 
	 	 	Title:                  	 

 

 

  

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EXHIBIT “A”

Escrow Agent’s Fee Schedule

 

 

  

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