PLAN OF LIQUIDATION AND ESCROW AGREEMENT
THIS PLAN
OF LIQUIDATION AND ESCROW AGREEMENT (this “Agreement”) by and between A.R.E.
Wind Corp. (the “Company”) and Xxxxxxx Xxxxxx (the “Escrow Agent”) is entered
into for the purpose of effecting the liquidation of the assets of the Company
(the “Plan”) through an escrow account for the benefit of the stockholders of
the Company on the established record date of October 3, 2008, (“the
Stockholders”)
ARTICLE
I
THE
PLAN OF LIQUIDATION
1.1 Scope of
Plan. The Plan provides for the liquidation of substantially
all of the Company’s net assets through a series of distributions of cash to the
Stockholders generated from cash on hand and the sale of certain
assets as of the Record Date (defined below).
1.2 Adoption of
Plan. The Board of Directors of the Company (the “Board”) and
a majority of the Stockholders intend to adopt the Plan pursuant to written
consent. The Plan shall constitute the adopted Plan of the Company on
the date on which the Plan is formally adopted by the Board and Stockholders
pursuant to written consent as required by Nevada law (the “Record
Date”).
1.3 Liquidation of
the Company’s Assets. The Escrow Agent is hereby authorized to sell and
otherwise to liquidate any and all of the assets and properties of the Company,
and to pay, discharge or make adequate provision for the payment of all of the
known debts, liabilities and obligations of the Company, as set forth in Exhibit
A, attached hereto. The Escrow Agent shall obtain appropriate releases in
connection with the payment of debts, liabilities and obligations of the
Company.
1.4 Reserves for
Liabilities. The Escrow Agent shall set aside from its assets
and cash-on-hand such additional amount as the Escrow Agent in his absolute
discretion determines to be appropriate from time to time in connection with
other, unascertained or contingent, liabilities of the Company., including
certain salary and employee termination obligations and costs, fees or expenses
incurred in connection with the Plan.
1.5 Distribution to
Stockholders. The Escrow Agent shall make pro rata liquidating
distributions to the Stockholders in cash from time to time after the Record
Date as determined by the Escrow Agent in his absolute
discretion. The Escrow Agent is authorized to perform, and shall
perform, such acts and take such steps as may be necessary or convenient to
carry out this Plan, including, but not limited to, the execution and delivery,
on behalf of the Company and in its name, of any and all documents and
instruments as may be required to collect and distribute the property and assets
of such Company in accordance with the provisions of this Plan, and all such
other and further instruments as may be necessary to vest title to the assets of
the Company with the appropriate parties in accordance with this
Plan.
1.6 Further
Authorization. The Escrow Agent is hereby authorized to do and
perform, any and all acts and to make, execute, deliver or adopt any and all
agreements, resolutions, conveyances, certificates and other documents of every
kind which are deemed necessary, appropriate or desirable, to implement the Plan
and the transactions contemplated hereby, as authorized in the absolute
discretion of the Escrow Agent, including without limiting the foregoing, all
filings or acts required by state or federal law or regulation to engage in the
Plan.
ARTICLE
II
TERMS
OF ESCROW AGREEMENT
2.1 The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the assets of the Company on the Record
Date, subject to the terms and conditions of this Agreement.
2.2 Having
received a list of assets and liabilities in the attached Schedule A from the
Company, the Escrow Agent shall immediately and without further instruction
implement the Plan of Liquidation as detailed in Article I above.
2.3 Until
December 31, 2008, the Escrow Agent shall not receive any compensation in
connection with the Plan. Thereafter, the Escrow Agent shall be paid
$50.00 per hour for time spent in connection with the Plan. Any fees paid to
Escrow Agent shall be paid only out of available escrow assets.
2.4 The
Escrow Agent shall not incur any liability whatsoever for acting upon any
notice, direction, waiver, receipt, consent, certificate, authorization, power
of attorney or other paper or document purporting and believed by the Escrow
Agent to be genuine and to be signed and presented by the proper person or
persons.
2.5 The
parties acknowledge that, although the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience and that Escrow Agent
shall not be liable to the Company for any act or omission on his part unless
taken or suffered in bad faith or in willful disregard of this contract or
involving gross negligence on the part of Escrow Agent.
ARTICLE
III
MISCELLANEOUS
3.1 This
Agreement shall be binding upon and shall inure to the benefit of the permitted
successors and permitted assigns of the parties hereto.
3.2 This
Agreement is the final expression of, and contains the entire agreement between,
the parties with respect to the subject matter hereof and supersedes all prior
understandings with respect thereto. This Escrow Agreement may not be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged or
by their respective agents duly authorized in writing or as otherwise expressly
permitted herein.
3.3 The
parties hereto expressly agree that this Agreement shall be governed by,
interpreted under and construed and enforced in accordance with the internal
laws of the State of Nevada without reference to principles and conflicts of
laws. The parties hereto submit to the jurisdiction of the state and
federal courts sitting in Nevada, Nevada with respect to any dispute or
controversy arising under this Agreement.
3.4 The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company and the Escrow Agent.
3.5 The
Escrow Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by the Escrow Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith, excepting only its own willful misconduct, and any act done or omitted by
the Escrow Agent pursuant to the advice of the Escrow Agent’s attorneys-at-law
(other than Escrow Agent itself) shall be conclusive evidence of such good
faith.
2
3.6 The
Escrow Agent shall be entitled to employ such legal counsel, and other experts
as the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation
therefore.
3.7 The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by written notice to the parties. In the
event of any such resignation, the parties shall appoint a successor Escrow
Agent.
3.8 If
the Escrow Agent reasonably requires other or further instruments in connection
with this Escrow Agreement or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.
3.9 The
parties agree to indemnify and hold harmless the Escrow Agent and
its employees, agents and representatives from any and all claims,
liabilities, costs or expenses (including reasonable attorneys’ fees) in any way
arising from or relating to the duties or performance of the Escrow Agent
hereunder or the transactions contemplated hereby, other than any such claim,
liability, cost or expense to the extent the same shall have been determined by
final, non-appealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Escrow
Agent.
3.10 Time
is of the essence of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Plan of Liquidation and
Escrow Agreement as of this 3rd day of October, 2008.
THE
ESCROW AGENT:
By: /s/ Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
THE
COMPANY:
By: /s/ Xxxx Xxxx
Name:
Xxxx Xxxx
Its:
CFO
3
Exhibit
A
|
Estimated
Value
(1)
|
||
|
ASSETS:
|
||
|
Cash
in banks and financial institutions (2)
|
$ | 2,105,769 |
|
Xxxxx
Cash
|
500 | |
|
Accounts
Receivable
|
23,018 | |
|
Note
Receivable (including accrued interest)
|
28,599 | |
|
Land
and building, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxxx, XX (net)
|
329,000 | |
|
Case
Forklift, Fredonia AZ
|
500 | |
|
Office
furniture, fixtures and equipment
|
250 | |
|
NM
gas properties
|
235,000 | |
|
Paramount
contract
|
38,400 | |
|
Estimated
rents, royalties (net) and other revenues through 12/31/2008
(3)
|
83,731 | |
|
Federal
income tax refund FYE 2/08
|
7,394 | |
|
Federal
income tax refund FYE 2/09 (estimated @ 8/31/2008) (4)
|
96,454 | |
|
Total
Assets
|
$ | 2,948,615 |
|
Debts
and Obligations:
|
||
|
Accounts
Payable
|
$ | 7,230 |
|
Salaries
and wages through 12/31/2008
|
44,876 | |
|
Estimated
employee severance compensation
|
210,361 | |
|
Payroll
taxes
|
22,971 | |
|
Company
match 2008 SIMPLE Retirement Plan contributions
|
5,385 | |
|
Estimated
operating costs to be incurred through 12/31/2008 (3)
|
15,035 | |
|
Estimated
Stockholder distribution costs
|
8,000 | |
|
Plugging
liability for Kansas well (5)
|
15,000 | |
|
Xerox
Lease (6)
|
1,475 | |
|
Mailing
machine lease (expires 12/2008)
|
54 | |
|
State
Income Taxes
|
100 | |
|
Total
Debts and Obligations
|
$ | 330,487 |
|
Estimated
Net Assets
|
$ | 2,618,128 |
Footnotes:
(1)
Estimated values are based on information available at the time of preparation
of this exhibit. Actual amounts realized and incurred may be materially
different and such changes will have a direct impact on the ultimate amount
available for distribution to Stockholders.
(2) Cash
deposited with banks and financial institutions presently in the name of
Intermountain Refining Co., Inc.
(3)
Estimates of rents, royalties and other revenues, along with associated
estimated operating costs, are based on historical data projected through
12/31/2008. Actual amounts realized will be different depending on variations
from historical operating levels and the timing of disposition of associated
assets.
(4)
Federal income tax refund receivable estimated as of 8/31/2008 is based on
actual results of operations through that date. The ultimate refund receivable,
if any, will change based on actual operating results including realized gains
and losses on the disposition of assets. To the extent that the disposition of
assets results in taxable income in excess of available offsetting losses, then
the associated income tax liability shall be paid from available escrow
assets.
(5)
Plugging and abandonment of the last remaining well in Kansas has been initiated
and should be completed during November 2008.
(6) Xerox
lease expires on 3/15/2010. Obligation is based on payment of 100% of remaining
minimum lease payments assuming lease is not assigned to a third
party.
