Exhibit 28 (a)
PROCEEDS ESCROW AGREEMENT
THIS PROCEEDS ESCROW AGREEMENT (the "Agreement") is made and entered into this 7
day of December, 1997 by and between SUMMA METALS CORP., a Nevada corporation
(the "Company/Issuer") and Steven L. Siskind, 645 Fifth Avenue, Suite 403, New
York, NY 10022 (the "Escrow Agent").
Premises
The Company proposes to offer for sale to the general public, up to 510,000
Units of Common Stock (the "Offering"), at an offering price of $6.00 per Unit
(the " Unit'), in accordance with the registration provisions of The Small
Business Investment Incentive Act of 1980, now contained in Section 19 of the
Securities Act of 1933, as amended; Rule 504 of Regulation D; and pursuant to a
Registration Statement on Form SB-2 (the Registration Statement") filed with the
Securities and Exchange Commission.
Agreement
NOW THEREFORE, the parties hereto agree as follows:
1. Until termination of this Agreement, all funds collected by the Company
and/or an Underwriter 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 date following receipt.
2. Collections. All subscription payments (which payments shall be made payable
to Steven L. Siskind, Attorney Escrow Account for the benefit of Summa Metals
Corp.) received for Units by the Company and/or Underwriter, will be transmitted
to the Escrow Agent by the Company and/or Underwriter by noon of the next
business day following receipt by the Company and/or Underwriter. The Company
and/or Underwriter shall include a written account of sale, which shall include
the Investor's name and address, the number of Units purchased, the amount paid
therefor, social security number, taxpayer identification number, and whether
the consideration received was in the form of a check, draft or money order
("Payment").
3. The Escrow Agent shall establish the Escrow Account , forward for collection
all Payments received by it; and deposit all funds collected by it into the
Escrow Account . Any Payment received that is payable to a party other then
Steven L. Siskind, Attorney Escrow Account for the benefit of: Summa Metals
Corp., and any payment returned unpaid to the Escrow Agent; , shall be returned
to the Company and/or Underwriter. In the event issuer rejects an Investor after
the Investor's Payment has been deposited into the Escrow Account, Issuer shall
certify in writing to the Escrow Agent the fact .of such rejection, the name of
the Investor so rejected, and the amount of Payment for Units made by such
Investor, and shall direct the Escrow Agent to return to such Investor a check
in the amount of such Payment, without deduction, including such investor's pro
rata share of any interest earned while such Investor's funds were on deposit;
provided, however, that if Payment by such Investor has been forwarded for
collection but funds on which have not been collected, the Escrow Agent shall
have no duty to make payment pursuant to this paragraph until receipt of such
Collected Funds by Escrow Agent. In the event Issuer rejects an Investor before
the Investor's Payment has been deposited in the Escrow Account, Issuer shall
direct Escrow Agent to return promptly the Investor's Payment, without interest,
directly to Investor. In the event Issuer rejects an Investor before the
Investor's Payment has been deposited in the Escrow Account, Issuer shall direct
Escrow Agent to return promptly the Investor's Payment, without interest,
directly to Investor.
4. Interest. Except to the extent that interest is payable to Investors pursuant
to Section 3 of this Agreement, Escrow Agent shall deliver to Issuer in a
single, lump-sum payment all interest earned on funds deposited in the Escrow
Account.
Except as provided in Section 3 of this Agreement, no interest shall be earned
by or payable to Investors. If interest is payable to Investors pursuant to
Section 3 of this Agreement, the amount of interest payable to each Investor
shall be calculated by Escrow Agent and provided to the Company and/or
Underwriter. Company and/or Underwriter shall file Form 1099's and any other
required reports in connection with the interest earned on the Escrow Account
and distributed to Investors.
5. Investments. Collected funds deposited into the Escrow Account shall be
invested only in a money market account at First National Bank of Long Island,
253 New York Avenue, Huntington, New York. Issuer represents such fund is an
investment permitted under rule 15c2-4 of the Securities Exchange Act of 1934,
as amended.
6. Concurrently with transmitting funds to the Escrow Agent, the Company and/or
Underwriter 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, the number of Units subscribed for, and the dollar amount paid. All
funds so deposited shall remain the property of the subscriber until the dollar
threshold in met. Until the threshold is reached, the subscribers funds held by
the Escrow Agent shall not be subject to any liens or charges by the escrow
agent or judgments or creditors' claims against the Company and/or the
Underwriter.
7. If at any time prior to the expiration of the minimum offering period, as
specified in Paragraph 6, $780,000 Has been deposited pursuant to this
Agreement, the Escrow Agent shall confirm the receipt of such funds to the
Company and/or Underwriter and on written request of the Company, the Escrow
Agent shall promptly transmit the balance to the Company (such event is
hereinafter referred to as the "Closing"). Thereafter, the Escrow Agent shall
continue to accept deposits from the Company and/or Underwriter and transmit,
upon written request of the Company the balance to the Company until the
offering is terminated. The Company shall notify the Escrow Agent in writing of
the completion or the Offering and shall schedule a final closing for the final
disbursement and settlement of the balance of funds in the Offering.
9. If at any, time prior to the termination of this escrow the Escrow Agent is
advised by the Securities and Exchange Commission, or any state securities
division, that a stop order has been issued with respect to the Registration
Statement, the Escrow Agent shall, upon receipt of its fee, thereon return all
funds without interest to the respective subscribers.
10. It is understood and agreed that the duties of the Escrow Agent are entirely
ministerial, being limited to receiving monies from the Company and/or the
Underwriter and holding and disbursing such monies in accordance with this
Agreement.
The Escrow Agent
II The Escrow Agent is not responsible or liable in any manner whatsoever for
the sufficiency, correctness, geniuses, or validity of any instrument deposited
with it, or with respect to the form or execution of the same, or the identity,
authority, or the rights of any person executing or depositing the same.
12. 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 the
Escrow Agent of such default by the undersigned , or any of them, unless it is
indemnified in manner satisfactory to it against any expense of liability
arising therefrom.
13. The Escrow Agent shall not be liable for acting on any notice, request,
waiver, consent, receipt, or other paper of document believed by the Escrow
Agent to be genuine and to have been signed by the proper party or parties.
14. 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 filth, or for any mistake of
fact or law, or for having anything which it may do or refrain from doing in
connection herewith, except its own willful misconduct.
15. The Escrow Agent shall not be answerable for the default or misconduct of
any attorney or employee appointed by it if such agent, attorney or employee
shall have been selected with reasonable care.
16. 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.
17. 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:
(a) 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
(b) All differences shall have been adjusted by agreement and the Escrow' Agent
shall have been notified thereof in writing signed by all of the person
interested.
18. The fee of the Escrow Agent is $2,500. The fee agreed upon 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, or the Escrow Agent renders any
material service not contemplated by this Agreement, or there is any assignment
of interest in the subject matter of this Agreement, or any material
modification thereof, or if 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 fully reimbursed for all such extraordinary expenses, including
reasonable attorney's fees, including the reasonable value of legal services
rendered by the Escrow Agent in his capacity as attorney in connection with such
services, and all extraordinary expenses shall be paid by the Company.
19. Resignation. Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving other parties hereto at least fifteen
(15) days notice hereof. As soon as practicable after the resignation, Escrow
Agent shall turn over to a successor escrow agent all monies and properties held
hereunder (less such amount as Escrow Agent is entitled to retain) upon
presentation to Escrow Agent of the document appointing the new, escrow agent
and its acceptance of such appointment. If no successor Escrow Agent is to
appointed within a thirty day period following such notice of resignation,
Escrow Agent shall deposit the monies and property with the Supreme Court of the
State of California in and for the County of Orange or United States District
Court for the District of Orange, as it deems appropriate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers, as of the date first above
written.
By: SUMMA METALS CORP.
28281 Crown Valley Pky, Suite 225
Laguna Niguel, CA 92677-1461
(602) 680-5513
/s/ Michael M. Chaffee, President
/s/ Steven L. Siskind, as Escrow Agent