ESCROW AGREEMENT
BANK ONE, ARIZONA, N.A.
THIS ESCROW AGREEMENT (the "Escrow Agreement") dated and effective as of the
19th day of March, 1999 among Boe and Company "Depositor"), Summa Metals
Corporation ("Other Party") and BANK ONE ARIZONA, N.A., as escrow agent
hereunder (in such capacity, the "Escrow agent"), all being duly authorized to
execute and deliver this Escrow Agreement.
RECITALS
WHEREAS, the Depositor and the Other Party desire that and have requested the
Escrow Agent to be engaged as agent in accordance with the terms and conditions
hereof, and
WHEREAS, Escrow Agent is willing to perform such services in accordance with the
terms and conditions hereof and has established the Escrow Account hereunder;
WITNESSETH
NOW, THEREFORE in consideration of the covenants and agreements herein
contained, and for other good, fair and valuable considerations and reasonably
equivalent value, the receipt and sufficiency of which are hereby acknowledged
by the parties hereto, the Escrow Agent, Depositor and the Other party do agree
as follows, intending to be legally bound;
Section 1. CERTAIN RULES OF CONSTRUCTION AND DEFINED TERMS. For all purposes of
this Escrow Agent, except as otherwise expressly provided or unless the context
otherwise requires:
a) All Persons and entities defined or mentioned herein as parties hereto or
to the other agreements, instruments, documents and the like mentioned
herein shall include, as applicable, each and all of their respective
heirs, legal representatives, successors and assigns.
b) All references to agreements, instruments, documents and the like herein
shall mean and include all amendments, supplements and modifications
thereto and restatements thereof and substitutions therefor, as such
agreements, instruments, documents and the like are so amend@ supplemented,
modified or restated in accordance with their respective terms.
c) The words "herein", "hereof" and "hereunder" and the other words of similar
import refer to this Escrow Agent as a whole and not to any particular
Section or other subdivision.
d) All headings used in this Escrow Agreement are for the convenience of the
parties only and shall not be used in construing the meaning or intent of
the terms and provisions hereof.
e) The following terms shall have the respective meanings set forth or
refereed to below in this Section. Except where the context otherwise
requires, words importing the singular number shall include the plural and
vice versa.
"Business Day" shall mean any day on which banks are open for general
banking business in the State of Arizona, other than a Saturday, a
Sunday, a legal holiday or any other day on which banks in the state
of Arizona are required or authorized by law on executive order to
close. If any action or time for performance pursuant to this Escrow
Agent is to occur on any day that is not a Business Day, such time for
action or performance shall be extended to the next Business Day.
"Condition" or "Conditions" shall mean the requirements set forth in
Exhibit "A" subject to the receipt of written instructions in
compliance with the requirements by a Trust Officer of the Escrow
Agent at the Escrow Agent's Corporate Trust Offices, during the Escrow
Agent business hours on a Business Day on or before the Release Date.
"Depositor", shall have the meaning assigned to such term in the
preamble to this Escrow Agreement.
"Escrow Agent" shall have the meaning assigned to such term in the
preamble to this Escrow Agreement.
"Indemnified Party" shall mean the Escrow Agent and/or any of its
shareholders, directors, agents, officers and employees.
"Other Party" shall have the meaning assigned to such term in the
preamble to the Escrow Agreement.
"Person" shall mean any individual corporation, @ unincorporated
organization, governmental authority or any other form of entity.
"Permitted Investments" shall mean The One Group U.S. Treasury Money
Market Fund.
"Property" shall mean cash deposits.
"Release date" shall mean six (6) months from the effective date of
the offering or as otherwise defined in Exhibit "A".
"Offering Effective Date" shall mean the date as determined by the
Securities and Exchange Commission that The Other Party can sell its
common stock to the public.
Section 2. DEPOSIT IN ESCROW. The Depositor win deliver to the Escrow Agent the
Property to be held by the Escrow Agent in escrow pursuant to the provisions of
the Escrow Agent.
Section 3. ESCROW INSTRUCTIONS. The Escrow Agent is hereby authorized and
instructed to deliver the Property to the Other Party in strict compliance with
Exhibit "A".
Section 4. INVESTMENT OF FUNDS HELD BY ESCROW AGENT. Pending distribution in
accordance with the provisions of Section 3 hereof, all collected and available
funds held by the Escrow Agent pursuant to this Escrow Agreement, shall be
invested the The Bank One Trust Money Market Deposit Account, All interest
earnings on Permitted Investment shall be credited to Other Party upon receipt.
Section 5. AVAILABILITY OF FUNDS/DELIVERY OF PROPERTY. All parties acknowledge
and agree that delivery of the property is subject to the sale and final
settlement of Permitted Investments. Delivery of the Conditions(s) when funds
are invested in The One Group U.S. Treasury Money Market Fund must be made to
the Escrow Agent by 11:00 a.m. Central Time, if the Property is to be delivered
by the close of that business day. Otherwise, the Property will be delivered on
the next business day.
Section 6. CONCERNING THE ESCROW AGENT.
a) All parties acknowledge and agree that the Escrow Agent is acting solely
and exclusively as a depository hereunder. The Escrow Agent shall have no
liability to any Person in acting upon or refraining from acting on any
written notice, request, waiver, consent, certificate, receipt,
authorization, or other paper or document which the Escrow Agent believes
to be genuine and what it purports to be.
b) The Escrow Agent may confer with legal counsel in the event of any dispute
or question as to the construction of any of the provisions hereof, or its
duties hereunder, and shall incur no liability and it shall be fully
protected in acting in accordance with the opinions of such counsel.
c) In the event of any conflicting or inconsistent claims or demands being
made in connection with the subject matter of this Escrow Agreement, or in
the event that the Escrow Agent is in doubt as to what action it should
take hereunder, the Escrow Agent may, at its option refuse to comply with
any claims or demands on it, or refuse to take any other action hereunder
so long as such disagreement continues or such doubts exists, and in any
such event, the Escrow Agent shall not be or become liable in any way or to
any person for its failure or refusal to act, and the Escrow Agent shall be
entitled to continue to refrain from acting until (i) the rights of all
parties have been fully and finally adjudicated by a court of competent
jurisdiction, or (ii) all differences shall have been settled and all doubt
resolved by agreement among all on the interested Persons, and the Escrow
Agent shall have been notified thereof in writing singed by all such
Persons. In addition to the foregoing rights, in the event the Escrow Agent
has any doubt as to the course of action it should take under this Escrow
Agreement, the Escrow Agent is hereby authorized to petition any District
Court of Maricopa County or the United States District Court of the
District of Arizona for instructions or to interplead the funds or assets
so held (including Property and any investments) into such court. The
parties agree to the jurisdiction of either of said courts over their
persons as well as the Property, waive personal service of process, and
agree that service of process by certified or registered mail, return
receipt requested, to the address set forth below each party's signature to
the Escrow Agreement shall constitute adequate service. The Depositor and
the Other Party hereby agree to indemnify and hold the Escrow Agent
harmless from any liability or losses occasioned thereby and to pay any and
all of its fees, cost, expenses, and counsel fees and expenses incurred in
any such action and agree that, on such petition or interpleader action,
the Escrow Agent its servants, agents, employees or officers will be
relived of further liability.
d) THE INDEMNIFIED PARTY SHALL NOT BE LIABLE TO ANY PERSON FOR ANYTHING WHICH
IT MAY DO OR REFRAIN FROM DOING IN CONNECTION WITH THIS ESCROW AGREEMENT
INCLUDING THE INDEMNIFIED PARTY'S OWN NEGLIGENCE, BUT EXCLUDING THE
INDEMNIFIED PARTY" OWN GROSS NEGLIGENCE OR WILLFUL MALFEASANCE. THE
INDEMNIFIED PARTY'S LIABILITY FOR ANY GROSSLY NEGLIGENT PERFORMANCE OR THE
NONPERFORMANCE SHALL NOT EXCEED ITS FEES IN CONNECTION WITH THE SERVICES
PROVIDED HEREUNDER. IN NO EVENT SHALL THE INDEMNIFIED PARTY BE LIABLE TO
THE DEPOSITOR OR THE OTHER PARTY OR ANY PARTY FOR SPECIAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES, OR LOST PROFITS OR LOSS OF BUSINESS, ARISING UNDER
OR IN CONNECTION WITH THIS ESCROW AGREEMENT.
e) THE DEPOSITOR AND THE OTHER PARTY HEREBY AGREE JOINTLY AND SEVERALLY TO
PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTY AGAINST
ANY AND ALL COSTS, LOSSES, DAMAGES, LIABILITIES, CLAIMS EXPENSES (INCLUDING
COUNSEL FEES AND EXPENSES) AND CLAIMS INCURRED BY IT WITHOUT GROSS
NEGLIGENCE OR WILLFUL MALFEASANCE ON THE INDEMNIFIED PARTY'S PART ARISING
OUT OF OR IN ITS DUTIES HEREUNDER, INCLUDING THE COST AND EXPENSES OF
DEFENDING ITSELF AGAINST ANY CLAIM OF LIABILITY RELATING TO THIS ESCROW
AGREEMENT.
f) The Escrow Agent may resign for any reason, upon 30 days written notice to
the Depositor and the Other Party to this Escrow Agreement. Upon expiration
of such 30 day notice period, the Escrow Agent will deliver all Property in
its possession under this Escrow Agreement to any successor escrow agent
appointed jointly by Depositor and the Other Party, or if no successor
escrow agent has been so appointed, to any court of competent jurisdiction
in Maricopa County, Arizona. Upon either such delivery, the Escrow Agent
shall be released from any and all liability under this Escrow Agreement.
g) Contemporaneously with the execution of this Escrow Agreement the Other
Party shall pay to the Escrow Agent an Acceptance Fee $1,500.00 and a base
Annual Administration Fee of $1,500.00, which fee shall be deemed fully
earned immediately, regardless of the actual length of time during which
this Escrow Agreement is effective. In addition the Other Party agrees to
pay to the Escrow Agent its customary fees and expenses, including pre
approved counsel fees and expenses for the services rendered by it pursuant
to the provisions of this Escrow Agreement. The Escrow Agent's current fee
schedule is attached hereto as Exhibit B (but such fees may be adjusted
from time to time, in which case the Other Party agrees to pay the adjusted
fees).
h) It is strictly understood that the Escrow Agent has no duty to disburse any
funds to any Person until such funds have been collected by the Escrow
Agent and those funds are available in accordance with normal banking
procedures and/or policy.
i) No assignment of the interest of any of the parties hereto shall be binding
upon the Escrow Agent unless and until written evidence of such assignment
in form satisfactory to the Escrow Agent shall be filed with and accepted
by the Escrow Agent.
j) Any corporation or association into which the Escrow Agent may be converted
or merged, or with which it may be consolidated, or to which it may sell or
transfer its corporate trust business and assets as whole or in part, or
any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which it is a party, shall be and
become the successor Escrow Agent hereunder and vested with all of the
title to as was its predecessor, without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 7. MISCELLANEOUS.
(a) All notices and communications hereunder shall be in writing, and shall be
deemed to be duly given if sent first class mail, postage prepaid to the
address set forth below the signature of the party to receive such notice.
Any party to the Escrow Agreement may, from time to time, change its
address for notices by giving written notice of such change to the other
parties hereto. The Escrow Agent shall not be charged with knowledge of any
fact, including but not limited to performance or nonperformance of any
condition, unless it has actual received written notice thereof from all of
the parties hereto or their authorized representative clearly referring to
this Escrow Agreement.
(b) The rights created by this Escrow Agreement shall inure to the benefit of,
and the obligations created hereby shall be binding upon, the successors
and assigns of each of the parties hereto.
(c) This Escrow Agreement shall be construed and enforced according to the laws
of the State of Arizona.
(d) This Escrow Agreement shall terminate and Escrow Agent shall be discharged
of all responsibility hereunder at such time as Escrow Agent shall have
completed its duties hereunder; provided, however, the Escrow Agent's
rights to indemnity and to receive payment of its fees and expenses shall
survive any termination of this Escrow Agreement and any resignation or
removal of the Escrow Agent.
(e) This Escrow Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
(f) This Escrow Agreement constitutes the entire understanding and agreement of
the parties hereto with respect to the transactions described herein and
supersedes all prior agreements or understandings, written or oral between
the parties with respect thereto. There are no implied duties under this
Escrow Agreement. The Escrow Agent's only duty is to act in accordance with
specific written instructions furnished by the parties to this Escrow
Agreement. The Escrow Agent is not a party to any other agreement and the
Escrow Agent shall not be subject to any other agreement even though
reference thereto may be made herein.
(g) If any provision of this Escrow Agreement is declared by a court of
competent jurisdiction to be invalid, valid, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
with out being impaired or invalidated in any way.
(h) No amendment, notification or waiver of any provisions of this Escrow
Agreement nor consent to any departure by any Person from the provisions
hereof shall be effective in any event unless the same shall be in writing
and signed be each Other Party, Depositor and Escrow Agent, and then any
such waiver or consent shall be effective only in the specific instance and
purpose for which given.
(i) Pursuant to the regulations of the Office of the Comptroller of the
Currency [12 C.F.R.12.5 (a)] the Depositor and the Other Party have the
right to receive, at no additional cost and within five business days of
the transaction, a written notification disclosing certain information
relating to securities purchase and sale transactions in the Escrow
Account. The Escrow Agent has the option of furnishing to the Depositor and
the Other Party either (1) a copy of the broker-dealer confirmation
relating to the transaction or (2) a written notification disclosing: the
Escrow Agent's name, the account name, the Escrow Agent's capacity in the
transaction, the date of the execution (and upon the Depositor's and the
Other Party's written request, the time of execution ) of the transaction,
the identity, price and number of shares involved, the remuneration to the
broker-dealer and his identity, the total remuneration to be received by
the Escrow Agent and, if no broker-dealer was involved, the identity of the
person from whom the security was purchased or to whom it was sold.
In lieu of the foregoing time and form of notification, the Depositor and the
Other Party agree that the Escrow Agent's periodic statements, transmitted
pursuant to terms of this Escrow Agreement, will suffice.
(j) The Depositor an Other Party warrant to the Escrow Agent that there are no
federal, sate or local tax liabilities or @g requirements whatsoever
concerning the Escrow Agent's actions contemplated hereunder and warrant
and represent to the Escrow Agent that the Escrow Agent has no, duty to
withhold or file any report or any tax liability under any federal or state
income tax, local or state property tax, local or state sales or use taxes,
or any other tax by any taxing authority. The Depositor and the Other Party
hereto agree jointly and severally to indemnify the Escrow Agent full from
any tax liability, penalties or interest incurred by the Escrow Agent
arising hereunder and agree to pay in full any such tax liability together
with penalty and interest, if any, that is ultimately assessed against the
Escrow Agent for any reason as a result of its action hereunder (except for
the Escrow Agent's individual income tax liability).
IN WITNESS WHEREOF, Depositor, Other Party and Escrow Agent have executed this
Escrow Agreement effective as of the day and year first above written.
Boe and Company
Boe and Company By:
3668 South Jasper St. -------------------------------
Aurora, CO 80013 Title:
Fax 303-690-9030 ----------------------------
Summa Metals Corporation
28281 Crown Valley Parkway By:
Suite 225 -------------------------------
Laguna Niguel, CA 92677 Title:
Fax 949-348-9747 ----------------------------
Tax I.D. 88-0315984
BANK ONE, ARIZONA, N.A.
"Escrow Agent"
Corporate Trust Services By:
201 North Central Avenue -------------------------------
25th Floor
AZ1 1128
Phoenix, AZ 85004 Title:
----------------------------
Exhibit "A"
Escrow Agreement
Bank One, Arizona, N.A. and Summa Metals Corp.
Dated 19 March, 1999
1 The Other Party proposes to offer for sale to the general public, up to
510,000 Units on a best efforts all or none' basis as to the first 130,000
Units, and a "best efforts only" as to the remaining 380,000 Units, (the
"Offering"), each Unit consisting of one (1) share of common stock of the
Other Party, par value $.001 per share, one (1) Class A Warrant to purchase
one share of on stock and one Class B Warrant to purchase one share of
common stock ( at an offering price of $6.00 per Unit (The Units), pursuant
to a Registration Statement on Form SB-2 (the "Registration Statement")
filed with the Securities and Exchange Commission.
2 Commencing, on the Effective Date of the Offering, and until termination of
this Agreement, all funds collected by the Depositor 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 of such funds.
3 All subscription payments (which payments shall be made payable to "BANK
ONE/SUMMA METALS CORP Escrow Account") received for units by the Depositor
will be transmitted to Escrow Agent by Depositor by noon of the next
business day following receipt by Depositor. Depositor shall include a
written account of sale,, which shall include the Investor's name and
address, the number of units purchased, the amount paid, social security
number, taxpayer identification number, and whether the consideration
received was in the form of a check, draft or money order ("Payment"). All
funds so deposited shall remain the property of the subscriber until the
dollar threshold of $780,000 is met. Until the threshold is reached, the
subscribers funds held by the Escrow Agent shall not be subject to any lien
or charges by the Escrow Agent, or judgments or creditors' claims against
the Other Party and/or the Depositor.
4 Escrow Agent shall establish the Escrow Account and deposit all funds
collected by it into the Escrow Account. Any Payment received that is
payable to a party -other than BANK ONE/SUMMA METALS CORP, Escrow Account
and any Payment returned unpaid to Escrow Agent shall be returned to the
Depositor. In the event Depositor or the Other Party rejects an Investor
after the Investor's Payment has been deposited into the Escrow Account,
Depositor shall notify in writing to 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 Escrow Agent to promptly
return to such Investor a check in the amount of such Payment
5 Collected funds deposited into the Escrow Account shall be invested only in
the Bank One Trust Money Market Deposit Account. Escrow Agent represents
such fund is an investment permitted under rule 15c2-4 of the Securities
Exchange Act of 1934, as amended.
6 If at any time prior to the expiration of the minimum offering period, as
specified in Paragraph 8, $780,000 has been deposited pursuant to this
Agreement, the Escrow Agent shall confirm the receipt of such funds to the
Other Party and Depositor, and upon written request of the Other Party, the
Escrow Agent shall promptly transmit the balance of collected funds to the
Other Party (such event is hereinafter referred to as the "Closing").
Thereafter, the Escrow Agent shall continue to accept deposits from the
Other Party and/or Depositor and transmit upon written request of the Other
Party, the balance to the Other Party until the offering is terminated. The
Other Party shall notify the Escrow Agent in writing of the completion of
the Offering and shall schedule a final closing for the final disbursement
and settlement of the balance of funds in the Offering.
7 If the Depositor has not deposited a minimum of $780,000 in collected funds
with the Escrow Agent on or before ____________ but in no event later than
180 days from the Effective date of the Offering, the Escrow Agent shall so
notify the Other Party and shall within ten days of such receipt promptly
transmit to those investors who subscribed for the purchase of Units from
the Other Party the amount of money each such investor so paid without
interest. The Escrow Agent shall furnish to the Other Party verification of
refunds to all subscribers.
8 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 with interest to the respective subscribers.
EXHIBIT B
BANKONE, ARIZONA, NA
ESCROW FEE SCHEDULE
March 15, 1999
Re: Summa Metals Corporation Escrow Agreement
Acceptance Fee $1,500
Annual Administration Fee $1,500
Out-of-pocket Expenses:
Expenses for extraordinary services, such as, but not limited to, travel,
legal, securities delivery, and legal notice publication, will be billed
additionally.
Extraordinary Time Charges $200 per hour (see below)
Additional Terms and Conditions:
Acceptance of the appointment is subject to terms of the transaction and
document provisions being satisfactory to the bank.
The fees quoted in this letter apply to services ordinarily rendered in the
administration of an Agency Account. They are subject to reasonable
adjustment based on final review of documents. Fees can also be adjusted
when the Agent is called upon to undertake unusual duties or
responsibilities, or as changes in law, procedures, or the cost of doing
business demand. Services in addition to and not contemplated in the
agreement, including but not limited to document amendments and revisions,
non-standard cash and/or investment transactions, calculations, notices,
reports, and default administration will be billed as Extraordinary Time
Charges.
Disbursements under the document require 72 hours preparation; exceptions
from this policy may result in the application of Extraordinary Time
Charges.
Unless otherwise indicated, the above fees provide for the establishment of
one account. Additional sub-accounts governed by the same escrow agreement
may be established at an additional charge of $250 per account.
The Acceptance Fee and the first year Annual Administration Fee is payable
upon execution of the escrow documents. Annual Administration fees cover a
full year in advance, or any part thereof, and thus are not pro-rated in
the year of termination.
In determining the general schedule of fees, BankOne takes into
consideration the various incidental benefits accruing to it from the
operation of the accounts. Collected funds must be on deposit prior to
disbursement of payments. In addition, BankOne has the use of funds
transferred to pay checks that have not yet been presented for payment by
the payee. No interest shall be paid to the client on these funds, it being
understood that the float on these funds is considered in the calculation
of our fees.
Summa Metals Corporation
Escrow Fee Schedule
Page 2
Should you elect to appoint BankOne as your Escrow Agent, we request that you
sign and return the enclosed copy of this attachment acknowledging your
agreement to these fees, terms, and conditions.
Acknowledgment and Acceptance
The undersigned agrees to the above-quoted fees, terms and conditions.
Summa Metals Corporation
By:/s/
--------------------------------
Date: