PROCEEDS ESCROW AGREEMENT
THIS
PROCEEDS ESCROW AGREEMENT
(this
“Agreement”) is made and entered into this ____ day of ___________________,
2008, by and between Renewable
energy Acquisition Corp., a Nevada corporation (the “Company”), Crusader
Securities, LLC, a __________ limited liability company (the “Underwriter”), and
Associated Bank Minnesota, National Association of Minneapolis, Minnesota (the
“Escrow Agent”).
Premises
The
Company proposes to offer for sale to the general public in certain states
2,000,000 Units, each Unit consisting of one share of common stock, and two
redeemable common stock purchase warrants, at an offering price of $6.00 per
Unit in accordance with the registration provisions of the Securities Act of
1933, as amended (“Securities Act”) and pursuant to a registration statement on
form SB-2 (the “Registration Statement”) on file with the Securities and
Exchange Commission. The Company and the Underwriter have entered into or will,
prior to the effective date of the Registration Statement, enter into an
agreement pursuant to which the Underwriter has agreed to offer for sale the
Units in accordance with the terms of the prospectus contained in the
Registration Statement and is authorized to organize a selling group consisting
of brokerage firms which are members of the Financial Industry Regulatory
Authority (“Selling Group”), to participate in the sales effort. In accordance
with the terms of the Registration Statement, the
Company
and the Underwriter desire to provide for the escrow of the gross subscription
payments for Units until the amount, as set forth below, has been
received.
Agreement
NOW,
THEREFORE,
the
parties hereto agree as follows:
ARTICLE
I. SUBSCRIPTION ESCROW
1.01 All
funds
collected by the Underwriter or any member of the Selling Group from
subscriptions for the purchase of Units in the subject offering shall be
deposited promptly with the Escrow Agent, but in any event no later than noon
of
the next business day following receipt. Such funds shall be transmitted in
accordance with the terms of the agreement between the Company and the
Underwriter, which terms shall similarly apply to members of the Selling Group
through agreement between the Underwriter and the Selling Group. The
Escrow Agent shall deposit the funds in the account designated “Associated Bank,
Renewable Energy Escrow Account” (the “Escrow Account”) and acknowledge receipt
of all funds by notifying the Company of deposits into the Escrow Account in
the
Escrow Agent’s customary manner no later than the next business day following
the business day on which the funds are deposited into the Escrow
Account.
1.02 Concurrently
with transmitting funds to the Escrow Agent, the Underwriter and the members
of
the Selling Group shall also deliver to the Escrow Agent a schedule setting
forth the name and address of each subscriber whose funds are included in such
transmittal, social security number of the subscriber, the number of Units
subscribed for, and the dollar amount paid. All funds so deposited shall remain
the property of the subscriber and shall not be subject to any lien or charges
by the Escrow Agent, or judgments or creditors’ claims against the Company until
released to it in the manner hereinafter provided.
1.03 If
at any
time prior to the expiration of the minimum offering period, as specified in
paragraph 1.04, $6,000,000 has been deposited pursuant to this Agreement, the
Escrow Agent shall confirm the receipt of such funds to the Company and the
Underwriter, and the
funds
on deposit shall be paid to the Company and Underwriter or as otherwise
instructed by the them, within one (1) business day after the Escrow Agent
receives a written release notice in substantially the form of Exhibit A
attached hereto (a “Release Notice”) signed by one of the authorized persons of
the Company and the Underwriter listed on Exhibit B attached hereto.
Thereafter,
the Escrow Agent shall continue to accept deposits from the Underwriter and
the
Selling Group, and the
funds
so received shall be paid to the Company and Underwriter or as otherwise
instructed by them, within one business day after the Escrow Agent receives
a
further Release Notice(s) signed by one of the authorized persons of the Company
and the Underwriter listed on Exhibit B attached hereto.
1.04 If,
within three months after the effective date of the Registration Statement
(unless extended by agreement of the Company and Underwriter for an additional
period not to exceed two months by written notice to the Escrow Agent given
not
less than one business day prior to the expiration of the initial three-month
period), the Underwriter and the Selling Group have not deposited at least
$6,000,000 with the Escrow Agent that
for
whatever reason are not subsequently collected through normal banking
procedures,
the
Escrow Agent shall so notify the Underwriter and the Company and shall promptly
transmit to those investors who subscribed for the purchase of Units the amount
of money each such investor so paid. The Escrow Agent shall furnish to the
Company and the Underwriter an accounting for the refund in full to all
subscribers.
1.05 If
at any
time prior to the expiration of the minimum offering period, as specified in
paragraph 1.04, above, the Escrow Agent is advised by the Securities and
Exchange Commission that a stop order has been issued with respect to the
Registration Statement, the Escrow Agent shall thereupon return all funds to
the
respective subscribers.
ARTICLE
II. THE ESCROW AGENT
2.01. It
is
understood and agreed that the duties of the Escrow Agent, are entirely
ministerial, being limited to receiving monies and property hereunder, and
holding and disbursing such monies and property in accordance with this
Agreement. The
Escrow Agent shall have no duty or responsibility to enforce the collection
or
demand payment of any funds deposited into the Escrow Account. If, for any
reason, any check deposited into the Escrow Account shall be returned unpaid
to
the Escrow Agent, the sole duty of the Escrow Agent shall be to return the
check
to the Company.
2.02 The
Escrow Agent is not a party to, and is not bound by, any agreement between
the
Company and the Underwriter or the Underwriter and the Selling Group, which
may
be evidenced by or arise out of the foregoing instructions.
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2.03 The
Escrow Agent acts hereunder as a depository only, and is not responsible or
liable in any manner whatsoever for the sufficiency, correctness, genuineness,
or validity of any instrument deposited with it, or with respect to the form
or
execution of the same, or the identity, authority, or rights of any person
executing or depositing the same.
2.04 The
Escrow Agent shall not be required to take or be bound by notice of any default
of any person or to take any action with respect to such default involving
any
expense or liability, unless notice in writing is given to an officer of the
Escrow Agent of such default by the undersigned or any of them, and unless
it is
indemnified in a manner satisfactory to it against any expense or liability
arising therefrom.
2.05 The
Escrow Agent shall not be liable for acting on any notice, request, waiver,
consent, receipt, or other paper or document believed by the Escrow Agent to
be
genuine and to have been signed by the proper party or parties.
2.06 The
Escrow Agent shall not be liable for any error of judgment or for any act done
or step taken or omitted by it in good faith, or for any mistake of fact or
law,
or for anything which it may do or refrain from doing in connection herewith,
except its own gross negligence and willful misconduct.
2.07 The
Escrow Agent shall not be answerable for the default or misconduct of any agent,
attorney, or employee appointed by it if such agent, attorney, or employee
shall
have been selected with reasonable care.
2.08 The
Escrow Agent may consult with legal counsel in the event of any dispute or
question as to the consideration of the foregoing instructions or the Escrow
Agent’s duties hereunder, and the Escrow Agent shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such counsel.
2.09 In
the
event of any disagreement between the undersigned or any of them, the person
or
persons named in the foregoing instructions, and/or any other person, resulting
in adverse claims and/or demands being made in connection with or for any
papers, money, or property involved herein or affected hereby, the Escrow Agent
shall be entitled at its option to refuse to comply with any such claim, or
demand so long as such disagreement shall continue and, in so refusing, the
Escrow Agent shall not be or become liable to the undersigned or any of them
or
to any person named in the foregoing instructions for the failure or refusal
to
comply with such conflicting or adverse demands, and the Escrow Agent shall
be
entitled to continue to so refrain and refuse to so act until:
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(a)
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the
rights of adverse claimants have been finally adjudicated in a court
assuming and having jurisdiction of the parties and the money, papers,
and
property involved herein or affected hereby;
and/or
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(b)
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all
differences shall have been adjusted by agreement and the Escrow
Agent
shall have been notified thereof in writing signed by all of the
persons
interested.
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ARTICLE
III. MISCELLANEOUS
3.01 The
fee
of the Escrow Agent is $1,000, receipt of which is hereby acknowledged. This
fee
includes one disbursement of two checks; and additional checks issued in that
disbursement will be at an additional charge of $3.00 each. Additional
disbursements will be provided at a fee of $50.00 per disbursement, and such
fee
includes two checks; and additional checks issued in that disbursement will
be
at an additional charge of $3.00 each. In addition (1) if payment is tendered
by
subscribers in the form of checks drawn on non-US banks, the Escrow Agent shall
receive a fee of $15.00 for each such check deposited in the Escrow Account,
(2)
if payment is tendered by subscribers in the form of a wire transfer, the Escrow
Agent shall receive a fee of $5.00 for each such wire transfer received for
deposit in the Escrow Account, (3) if funds are returned to subscribers under
1.04 or 1.05, above, the Escrow Agent shall receive a fee of $3.00 per check
for
such service, (4) if any disbursement, whether to the subscribers or per
instruction of the Release Notice, is made by wire transfer from the Escrow
Account, the fee shall be $17.00 per wire, and (5) all out of pocket expenses
for special handling, such as courier delivery service, certified, mail, etc.
The Company shall pay all such fees at the time of occurrence. The fee agreed
on
for services rendered hereunder is intended as full compensation for the Escrow
Agent’s services as contemplated by this Agreement; however, in the event that
the conditions of this Agreement are not fulfilled, the Escrow Agent renders
any
material service not contemplated by this Agreement, there is any assignment
of
interest in the subject matter of this Agreement, there is any material
modification hereof, any material controversy arises hereunder, or the Escrow
Agent is made a party to or justifiably intervenes in any litigation pertaining
to this Agreement or the subject matter hereof, the Escrow Agent shall be
reasonably compensated for such extraordinary expenses, including reasonable
attorneys’ fees, occasioned by any delay, controversy, litigation, or event and
the same may be recoverable only from the Company.
3.02. Notices.
All
notices and communications shall be deemed to have been duly given: at the
time
delivered by hand, if personally delivered; when received, if deposited in
the
mail, postage prepaid, addressed as provided below; when transmission is
verified, if telecopied; and on the next business day, if timely delivered
to an
air courier guaranteeing overnight delivery;
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To
the Company:
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0000
Xxxx Xxxx Xxxx Xxxx, Xxxxx 000
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Xxxxxxxxxxx,
XX 00000
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Attn:
Xxxxx Xxxxxxxx, President
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To
the Underwriter:
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Crusader
Securities, LLC
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000
Xxxx Xxxxxx, Xxxxx 0000
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Xxx
Xxxx, XX 00000
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Attn:
Xxxxx Xxxx, Managing Director
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To
Escrow Agent:
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Associated
Bank
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000
Xxxxxxxxx Xxx. Xx.
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Xxxxxxxxxxx,
XX 00000
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Attn:
________________________
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Any
party
may change its address by providing written notice of such change to the other
parties hereto.
3.03. Resignation
by Escrow Agent.
Upon
thirty (30) calendar days’ prior written notice to the Company and Underwriter
delivered or sent as required above, the Escrow Agent shall have the right
to
resign as escrow agent hereunder and to thereby terminate its duties and
responsibilities hereunder, and shall thereupon be released from these
instructions. Upon resignation by the Escrow Agent, the Escrow Agent shall
provide the Company with sufficient information concerning the status of the
Escrow Fund to enable the Company to provide the same to a successor escrow
agent.
3.04. Termination
of Escrow Agreement.
The
Escrow Agent’s responsibilities hereunder shall terminate at such time as the
Escrow Fund shall have been fully disbursed pursuant to the terms hereof, or
upon earlier termination of this escrow arrangement pursuant to written
instructions executed by the Company and Underwriter. Such written notice of
earlier termination shall include instruction to the Escrow Agent for the
distribution of the Escrow Fund.
3.05. Entire
Agreement.
This
Agreement contains the entire understanding by and among the parties hereto;
there are no promises, agreements, understandings, representations or
warranties, other than as herein set forth. No change or modification of this
Agreement shall be valid or effective unless the same is in writing and is
signed by all of the parties hereto.
3.06. Applicable
Law, Successors and Assigns.
This
Agreement shall be governed in all respects by the laws of the state of
Minnesota, and shall be binding upon and shall inure to the benefit of the
parties hereto, and their respective heirs, executors, administrators, legal
representatives, successors and assigns.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto have caused their respective hands to be
set
hereto with the intention of being bound effective in all respects as of the
date and year first hereinabove written.
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| By: | ||
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Xxxxx Xxxxxxxx, Vice President |
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| Crusader Securities, LLC | ||
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| By: | ||
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Xxxxx Xxxx, Managing Director |
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| Associated Bank | ||
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| By: | ||
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Its: |
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EXHIBIT
A
Release
Notice
Associated
Bank Minnesota, National Association
000
Xxxxxxxxx Xxx. Xx.
Xxxxxxxxxxx,
XX 00000
Attn:
___________________________
Gentlemen:
The
undersigned hereby authorize and instruct Associated Bank, escrow agent, to
release $___________________ of funds from the Escrow Account and to deliver
such funds as follows:
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1.
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[Instructions
for Underwriter]
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2.
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[Instructions
for Investment Management Trust]
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3.
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[Instructions
for Company Account]
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4.
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[Insert
any other payees and instructions]
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IN
WITNESS WHEREOF, this release has been executed on ________________,
200__.
| Renewable Energy Acquisition Corp. | ||
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| By: | ||
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Xxxxx
Xxxxxxxx, Vice Presidentr
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Crusader
Securities, LLC
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| By: | ||
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Xxxxx
Xxxxxxxx, Vice
Presidentr
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EXHIBIT
B
Authorized
Personnel
The
Escrow Agent is authorized to accept instructions and notices signed or believed
by the Escrow Agent to be signed by any one of the following each of who is
authorized to act on behalf of the Company and Underwriter:
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Name
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Title
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Signature
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Xxxxx
Xxxxxxxx
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President
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_________________________ | ||
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Crusader
Securities, LLC
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Name
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Title
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Signature
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Xxxxx
Xxxx
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Managing
Director
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_________________________ |
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