Document:

exv4w3

 

Exhibit 4.3

ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this “Agreement”) made and entered into this                     day of                                         ,
2006, by and among [INSERT BANK NAME], a federally-insured deposit organization located at                                         (hereinafter referred to as “Escrow Agent”) and First United Ethanol, LLC, a
Georgia limited liability company (hereinafter referred to as “Escrowor”).

WITNESSETH:

     WHEREAS, Escrowor proposes to engage in an offering of its Membership Units (hereinafter the
“Units”) in an offering registered with the Securities and Exchange Commission and in the states of
Florida, and Georgia, and possibly offered in other states pursuant to state securities
registration exemptions and under the provisions of the Securities Act of 1933, as amended
(hereinafter the “Offering”) in order to raise money for the construction and operation of an
ethanol plant;

     WHEREAS, Escrowor desires to comply with the requirements of federal and state securities laws
and regulations, and desires to protect the investors in the Offering by having all money raised as
part of said capital funds campaign held by an Escrow Agent until the Minimum Escrow Deposit
(hereinafter defined) is deposited with the Escrow Agent; and

     WHEREAS, Escrow Agent has agreed to hold all funds for Escrowor pursuant to the terms of this
Agreement.

     NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

     1. Establishment of Escrow Account. An escrow account (hereinafter 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.

     2. Ownership of Escrow Account. Until such time as the funds deposited in the Escrow
Account (hereinafter the “Deposited Funds”) shall equal the Minimum Escrow Deposit (as hereinafter
defined), all funds deposited in the Escrow Account by Escrower shall not become the property of
Escrower or be subject to the debts of Escrower or any other person but shall be held by the Escrow
Agent solely for the benefit of investors who have purchased Units in the Offering.

     3. Deposit of Proceeds. Upon execution of this Agreement, Escrowor shall deliver to
the Escrow Agent escrow funds to be held by Escrow Agent pursuant to the terms of this Agreement,
together with an appropriate written statement setting forth the name, address and social security
number of each person purchasing Units, the number of Units purchased, and the

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amount paid by each such purchaser. As the proceeds of each sale are deposited with the
Escrow Agent, FUEL shall reserve the number of Units confirmed to the purchaser thereof in
connection with such sale. Escrowor may make additional deposits of escrow funds into escrow at
any time at Escrowor’s discretion. All such deposited proceeds are referred to herein as the
“Escrow Funds”.

     4. Investment of Escrow Account. The Escrow Agent 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 Escrowor. Escrow Agent is hereby authorized
to invest Escrow Funds in the Federated Treasury Obligations Money Market Mutual Fund for temporary
investment without written direction until such time as the money is to be paid out according to
the terms of this Agreement;

     5. Limitation of Liability and Indemnification of Escrow Agent. The Escrow Agent
shall not be obligated to disburse the Escrow Funds except as provided herein. Without limiting
the generality of the foregoing, should any party claim that it is entitled to receive all of any
part of the Escrow Funds, then Escrow Agent shall not be obligated to disburse the Escrow Funds to
the party claiming the same without the prior written consent of the Escrowor. In performing any
of its duties with respect to the Escrow Account, the Escrow Agent shall not be liable for any
loss, costs, or damages which it may incur as a result of serving as escrow agent hereunder, except
for any loss, costs, or damages arising out of its willful default or gross negligence. Escrowor
agrees to indemnify and hold harmless the Escrow Agent from and against any and all losses, claims,
damages, liabilities and expenses, including without limitation, reasonable costs of investigation
and attorney’s fees and disbursements, which may be imposed upon or incurred by the Escrow Agent in
connection with the performance of its obligations under this Agreement. In the event of any
dispute between the parties to this Agreement, in the sole discretion of Escrow Agent to justify
its doing so, the Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands held under the terms of this
Agreement, together with such legal pleadings as it deems appropriate, and thereupon the Escrow
Agent shall be discharged from any further obligation under 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 declares the Offering effective (the “Offering
Effective Date”). Escrowor 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 give the Escrowor prompt written notice when the Deposited
Funds equal $2,840,000 (exclusive of interest). Following receipt of such notice, the
Escrowor will advise the purchasers of Units to remit to the Escrow Agent the balance of

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the purchase price within twenty (20) days. Thereafter, Escrow Agent shall give the
Escrowor written notice acknowledging the receipt of the Deposited Funds every seven days.
The Escrow Agent shall give the Escrowor prompt written notice when the Deposited Funds
total $40,000,000 (exclusive of interest).

     b. At the time (and in the event) that: (i) the Deposited Funds shall, during the term
of this Agreement, equal $40,000,000 in subscription proceeds (exclusive of interest) (the
“Minimum Escrow Deposit”); (ii) the Escrow Agent shall have received written confirmation
from the Escrowor that the Escrowor has obtained a written debt financing commitment for
debt financing ranging from a minimum of $52,300,000 to a maximum of $102,300,000; (iii)
the Escrowor has affirmatively elected in writing to terminate this Agreement; and (iv) the
Escrow Agent shall have provided to each state securities department in which the Escrowor
has registered its securities for sale, as communicated to the Escrow Agent by the Escrowor,
an affidavit stating that the foregoing requirements (i), (ii) and (iii) of this subsection
7b have been satisfied, then this Agreement shall terminate, and the Escrow Agent shall
promptly disburse the funds on deposit, including interest, to the Escrowor to be used in
accordance with the provisions set out in the Registration Statement. The Escrowor 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 and the Registration Statement
shall contain a provision to such effect. Upon the making of such disbursement, the Escrow
Agent shall be completely discharged and released of any and all further responsibilities
hereunder.

     c. In the event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit
on or before the Termination Date or if the Escrowor 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: (i) the sum which each purchaser initially paid in on account of purchases of the
Units in the Offering and (ii) each purchaser’s portion of the total interest earned on the
Escrow Account as of the Termination Date, (iii) reduced by the transaction fees provided in
paragraph 8 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 Escrowor 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 3) shall

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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. Fees. Escrowor agrees to pay the Escrow Agent the fees specified in the Escrow
Agent’s fee schedule attached hereto as Exhibit A, in the manner set forth therein, unless
otherwise agreed to by the parties in writing. The parties further agree that such fees shall be
paid from interest on the Escrow Account only and not from principal. In the event the interest on
the Escrow Account is insufficient to satisfy the full amount of fees payable hereunder, Escrowor
shall be solely responsible for the payment of such fees and the Escrow Agent shall not seek
payment of the fees from investors or apply any principal deposited by investors in the Escrow
Account against such fees.

     9. Miscellaneous Provisions:

     a. Notice. All notices, requests, demands, tenders and other communications
required or permitted hereunder shall be made in writing and shall be deemed to be duly
given if delivered in person or mailed certified mail, return receipt requested, to the
addresses set forth herein. Either party hereto may change the address to which notices,
requests, demands, tenders and other communications to such party shall be delivered or
mailed by giving notice to the other party hereto in the manner herein provided.

If to [INSERT BANK NAME]:

_______________________

_______________________

_______________________

_______________________

Attn:                                            

Fax:                                              

Phone:                                         

If to FUEL:

First United Ethanol, LLC

2 West Broad Street

Camilla, Georgia 31730

Attn: Murray Campbell, President

Fax: (229) 522-2824

Phone: (229) 522-2822

with a required copy to:

Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C.

666 Grand Avenue, Suite 2000

Des Moines, IA 50309

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Attention: Valerie D. Bandstra

Fax: (515) 283-0231

Phone: (515) 242-2400

     b. Waiver. Any term or condition of this Agreement may be waived at any time
by the party which is entitled to the benefit thereof, but such waiver shall only be
effective if evidenced by a writing signed by such party. A waiver on one occasion shall
not be deemed to be a waiver of the same or any other breach on another occasion.

     c. Survival of Representations. All statements and agreements contained herein
shall be deemed representation, warranties, covenants and agreements made by the respective
parties to this Agreement and shall survive the consummation of the transactions
contemplated herein and the passing of title to any property.

     d. Amendments. This Agreement may be amended or modified only by a writing
signed by both of the parties hereto.

     e. Successors and Assigns. No party hereto shall assign this Agreement or any
rights or obligation hereunder without the prior written consent of the other parties
hereto. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.

     f. Governing Law. The validity and effect of this Agreement shall be governed,
construed and enforced under the laws of the State of Georgia.

     g. Entire Agreement.: This Agreement contains all of the terms agreed upon by
the parties with respect to the subject matter hereof and there are not representations or
understandings between the parties except as provided herein.

     h. Section Headings. Section headings contained in this Agreement are solely
for convenience of reference and shall not affect the meaning or interpretation of this
Agreement or of any term or provision hereof.

     i. Time. Time shall be of the essence in this Agreement.

     j. Invalid Provision to Affect No Other. If fulfillment of any provision
hereof or in any other agreement of even date or entered into in connection herewith or any
transaction related thereto, at the time performance of such provisions shall be due, shall
involve transcending that limit of validity presently prescribed by any applicable usury
statute or any other applicable law, with regard to obligations of like character and
amount, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of
such validity; and if any clause or provision herein of therein contained operates or would
prospectively operate to invalidate this agreement, or any other agreement of even date
herewith entered into in connection herewith, in whole or in part, then such clause or
provision only shall be held for naught, as though not herein or therein contained, and the

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remainder of this Agreement or such other agreements shall remain operative and in full
force and effect.

     k. Counterpart. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall be considered one
and the same agreement.

     l. Construction of Agreement. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto or thereto by any
court or other governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement the day and year first above
written.

	 	 	 	 	 	 	 	 	 
	ESCROWOR:	 	ESCROW AGENT:	 	 
	 
	 	 	 	 	 	 	 	 
	FIRST UNITED ETHANOL, LLC	 	[INSERT COMPANY NAME]
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Murray Campbell	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	President
	 	Title:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Notary Public:	 	Notary Public:	 	 
	 
	 	 	 	 	 	 	 	 
	Sworn to and subscribed before me	 	Sworn to and subscribed before me
	this                 th day of                                             , 2006.	 	this                     th day of                                         , 2006
	 
	 	 	 	 	 	 	 	 
	 	 	 

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EXHIBIT A

FEE SCHEDULE

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Exhibit 10.5

AMENDED LETTER OF INTENT

	 	 	 
	Date:

	 	March 10, 2006
	 
	 	 
	Parties:

	 	Fagen, Inc., a Minnesota Corporation, (“Fagen”) and
First United Ethanol, LLC, (formerly known as Mitchell County
Research Group, LLC), a Georgia limited liability company,
(“Owner”)
(Fagen and Owner are referred to herein individually as a “Party” and
collectively as the “Parties”)

WHEREAS, Owner is an entity organized to facilitate the development and construction of a 100 MGY
gas-fired fuel ethanol plant near Camilla, Georgia (the “Facility” or “Project”);
and

WHEREAS, Fagen is an engineering and construction firm capable of providing development assistance
to the Project, as well as designing and constructing the Facility being developed by Owner; and

WHEREAS, Fagen and Owner entered into a letter of intent dated July 22, 2005, for the Project (the
“Initial Letter of Intent”) and the parties have agreed to amend and replace the Initial
Letter of Intent between the parties relating to the Project; and

WHEREAS, Fagen and Owner agree that this letter, upon execution and return by Owner, will
constitute a letter of intent between Fagen and Owner (the “Letter of Intent”) and shall
supersede the Initial Letter of Intent in all respects, except as set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual covenants set forth herein, Owner and
Fagen agree to use best efforts in jointly developing this Project under the following terms:

     1. Owner agrees that Fagen will Design-Build the Facility if determined by Owner to be
feasible and if adequate financing is obtained. Should Owner choose to develop or pursue a
relationship with a company other than Fagen to provide the preliminary engineering or
design-build services for the project, then Owner shall reimburse Fagen for all expenses
Fagen has incurred in connection with the Project based upon Fagen’s standard rate schedule
plus all third party costs incurred from the date of the former Letter of Intent dated July
22, 2005, between Owner and Fagen. Such expenses include, but are not limited to, labor
rates and reimbursable expenses such as legal charges for document review and preparation,
travel expenses, reproduction costs, long distance phone costs, and postage. In the event
Fagen’s services are terminated by Owner, title to the technical data, which may include
preliminary engineering drawings and layouts and proprietary process related information,
shall remain with Fagen; however, Owner shall, upon payment of the foregoing expenses, have
the limited license to use the above described technical data, excluding proprietary
process

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related information, for completing documentation required for construction, operation,
repair and maintenance of the Project, at Owner’s sole risk.

     Owner acknowledges that the technical data provided by Fagen under this Letter of
Intent shall be preliminary and may not be suitable for construction and agrees that any
use of such technical data without Fagen’s involvement shall be at Owner’s sole risk.

     If Fagen intentionally or by gross negligence fails or refuses to comply with its
commitments contained in this Letter of Intent, Fagen shall absorb all of its own expenses,
and Owner shall have the right to terminate the Letter of Intent immediately upon written
notice to Fagen, and Owner shall be released from its obligations to pay or reimburse Fagen
as described above.

     2. Fagen will provide Owner with assistance in evaluating, from both a technical and
business perspective:

	 	•	 	Owner organizational options;
	 
	 	•	 	The appropriate location of the proposed Facility; and
	 
	 	•	 	Business plan development.

Fagen assumes no risk or liability of representation or advice to Owner by assisting in
evaluating the above. All decisions made regarding feasibility, financing, and business
risks are the Owner’s sole responsibility and liability.

     3. Owner shall pay Fagen One Hundred Thirteen Million Four Hundred Sixteen Thousand
Five Hundred Seventy-Six Dollars ($113,416,576.00) (the “Contract Price”) as full
consideration to Fagen for full and complete performance of the services described in the
design-build agreement and all costs incurred in connection therewith.

	 	(a)	 	The Contract Price shall not include any costs related to
union labor or prevailing wage requirements. If any action by Owner, a change
in applicable law, or a governmental authority (as those terms are defined in
the design-build agreement) acting pursuant to a change in applicable law,
shall require Fagen to employ union labor or compensate labor at prevailing
wages, the Contract Price shall be adjusted upwards to include any increased
costs associated with such labor or wages. Such adjustment shall include, but
not be limited to, increased labor, subcontractor, and material and equipment
costs resulting from any union or prevailing wage requirement; provided,
however, that if an option is made available to either employ union labor, or
to compensate labor at prevailing wages, such option shall be at Fagen’s sole
discretion and that if such option is executed by Owner without Fagen’s
agreement, Fagen shall have the right to terminate this Letter of Intent or
the design-build agreement, as applicable, and receive compensation.

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	 	(b)	 	If the Construction Cost Index published by Engineering
News-Record Magazine (“CCI”) for the month in which a Notice to
Proceed is given to Fagen is greater than 7660.29 (January 2006), the Contract
Price shall be adjusted to reflect such increase.

     4. Fagen is requiring representation of 10 counties located within Georgia on the
Board of Directors, and Owner shall provide to Fagen a list of the names, addresses
(residential), and phone numbers of such Directors.

     5. Once seed money has been raised, Fagen requires that the accounting firm of
Christianson & Associates, PLLP of Willmar, Minnesota prepare a pro forma projection to
confirm the feasibility of the project. Such projection shall be paid by Owner.

     6. Fagen will assist Owner in locating appropriate management for the Facility.

     7. Fagen will assist Owner in presenting information to potential investors, potential
lenders, and various entities or agencies that may provide project development assistance,
so long as the Project has 5% or less dilution. In addition, pro forma projections shall
be greater than 20% ROI by year five.

     8. During the term of this Letter of Intent the Owner agrees that Fagen will be the
exclusive Developer and Design-Builder for the Owner in connection with matters covered by
this Letter of Intent or the Initial Letter of Intent, and Owner shall not disclose any
information related to this Letter of Intent or the Initial Letter of Intent to a
competitor or prospective competitor of Fagen.

     9. This Letter of Intent shall terminate on December 31, 2007 unless the basic size
and design of the Facility have been determined and mutually agreed upon, and a specific
site or sites have been determined and mutually agreed upon, and at least 10% of the
necessary equity has been raised. Furthermore, this Letter of Intent shall terminate on
December 31, 2008 unless financing for the Facility has been secured. Either of the
aforementioned dates may be extended upon mutual written agreement of the Parties.

     10. Fagen and Owner agree to negotiate in good faith and enter into a definitive lump
sum design-build agreement, including exhibits thereto, acceptable to the Parties.

     11. The Parties will jointly agree on the timing and content of any public disclosure,
including, but not limited to, press releases, relating to Fagen’s involvement in Owner’s
Project, and no such disclosure shall be made without mutual consent and approval, except
as may be required by applicable law.

     12. The Parties agree that this Letter of Intent may be modified only by written
agreement by the Parties.

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     13. This Letter of Intent may be executed in one or more counterparts, each of which
when so executed and delivered shall be deemed an original, but all of which taken together
constitute one and the same instrument. Signatures which have been affixed and transmitted
by facsimile shall be binding to the same extent as an original signature, although the
Parties contemplate that a fully executed counterpart with original signatures will be
delivered to each Party.

	 	 	 	 	 	 	 	 	 
	First United Ethanol, LLC	 	Fagen, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Murray Campbell
	 	By:
	 	/s/ O. Wayne Mitchell	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Chairman
	 	Its:
	 	SVP	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	March 10, 2006
	 	Date:
	 	March 10, 2006	 	 

Page   4 of 4

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