Exhibit 10.5 to Registration Statement
SUMMIT LIFE CORPORATION
ESCROW AGREEMENT
THIS AGREEMENT, made to be effective as of the _______ day of
____________, 2001, by and between Summit Life Corporation, an Oklahoma
corporation (the "Company") and UMB Bank, Oklahoma City, Oklahoma, as escrow
agent ("Escrow Agent").
WITNESSETH:
WHEREAS, the Company intends to offer for sale to prospective investors
(the "Investors") up to 1,000,000 shares of the Company's common stock, par
value $.01 per share (the "Common Stock"); and
WHEREAS, each Investor will be required to pay his subscription in full
upon subscribing ($1.00 per share) by check, draft or money order (the
"Subscription Proceeds"); and
WHEREAS, under the terms of the offering the Subscription Proceeds are
required to be held in escrow subject to the receipt and acceptance by the
Company of the minimum Subscription Proceeds of $200,000, including any
subscription by the Company, its officers and directors; and
WHEREAS, the officers and directors of the Company will offer and sell
the Common Stock without receiving any commissions or other fees; and
WHEREAS, no subscriptions to the Company will be accepted after receipt
of the maximum Subscription Proceeds of $1,000,000 or ____________ _____, 2002,
which ever occurs first; and
WHEREAS, to facilitate compliance with the terms of the offering, the
Company desires to have the Subscription Proceeds deposited with the Escrow
Agent and the Escrow Agent desires to hold the Subscription Proceeds pursuant to
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints Escrow
Agent as the escrow agent to receive and to hold the Subscription Proceeds
deposited with Escrow Agent by the Company pursuant hereto, and Escrow Agent
hereby agrees to serve in such capacity during the term and based upon the
provisions hereof.
2. Deposit of Subscription Proceeds. Pending receipt of the minimum
Subscription Proceeds of $200,000, the Company shall deposit the Subscription
Proceeds of each Investor with the Escrow Agent and shall deliver to the Escrow
Agent a copy of the Subscription Agreement of such Investor.
The minimum subscription per Investor shall be for 100 shares of Common
Stock and payment for each subscription for Common Stock shall be in the form of
a check made payable to "Summit Life Corporation." The Escrow Agent shall
deliver a receipt to the Company for each deposit of Subscription Proceeds made
pursuant hereto.
3. Investment of Subscription Proceeds. The Escrow Agent shall invest
the Subscription Proceeds in the Federated Investors Treasury Obligations Fund
(CUSIP number 60934N-872). The interest earned shall be added to the
Subscription Proceeds and disbursed in accordance with the provisions of
paragraph 4 or 6, as the case may be.
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4. Distribution of Subscription Proceeds. If the Escrow Agent:
(a) receives written notice from an authorized officer of the
Company that at least the minimum aggregate subscriptions of $200,000 have been
received and accepted by the Company, and
(b) determines that Subscription Proceeds for at least $200,000 as
determined by the Company have cleared the banking system and are good, the
Escrow Agent shall promptly release and distribute to the Company such escrowed
Subscription Proceeds which have cleared the banking system and are good plus
any interest paid and investment income earned on such Subscription Proceeds
while held by the Escrow Agent in an escrow account.
Any remaining Subscription Proceeds, plus any interest paid and
investment income earned on such Subscription Proceeds while held by the Escrow
Agent in an escrow account shall be promptly released and distributed to the
Company by the Escrow Agent as such Subscription Proceeds clear the banking
system and become good.
5. Separate Company Account. During the continuation of the offering
after the receipt of at least the minimum aggregate subscriptions of $200,000
and prior to _____________ _____, 2002, any additional Subscription Proceeds may
be deposited by the Company directly in a separate Company account which shall
not be subject to the terms of this Agreement.
6. Distributions to Subscribers.
(a) In the event that the Company will not be funded as
contemplated because less than the minimum aggregate subscriptions of $200,000
have been received and accepted by the Company by 12:00 p.m. (noon), local time,
on ________________ _____, 2002, or for any other reason, the Company shall so
notify the Escrow Agent, whereupon the Escrow Agent shall promptly distribute to
each Investor a refund check made payable to such Investor in an amount equal to
the Subscription Proceeds of such Investor, plus any interest paid or investment
income earned thereon while held by the Escrow Agent in an escrow account as
calculated by the Company.
(b) In the event that a subscription for Stock submitted by an
Investor is rejected by the Company for any reason after the Subscription
Proceeds relating to such subscription have been deposited with the Escrow
Agent, then the Company shall promptly notify the Escrow Agent of such
rejection, and the Escrow Agent shall promptly distribute to such Investor a
refund check made payable to such Investor in an amount equal to the
Subscription Proceeds of such Investor, plus any interest paid or investment
income earned thereon while held by the Escrow Agent in an escrow account as
calculated by the Company.
7. Compensation and Expenses of Escrow Agent. The Company shall be
solely responsible for and shall pay the compensation of the Escrow Agent for
its services hereunder, as provided in Appendix 1 to this Agreement and made a
part hereof, and the charges, expenses (including any reasonable attorneys'
fees), and other out-of-pocket expenses incurred by the Escrow Agent in
connection with the administration of the provisions of this Agreement. The
Escrow Agent shall have no lien on the Subscription Proceeds deposited in an
escrow account unless and until the Company is funded with cleared Subscription
Proceeds of at least $200,000 and the Escrow Agent receives the notice described
in Paragraph 4 of this Agreement, at which time the Escrow Agent shall have, and
is hereby granted, a prior lien upon any property, cash, or assets held
hereunder, with respect to its unpaid compensation and nonreimbursed expenses,
superior to the interests of any other persons or entities.
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8. Duties of Escrow Agent. The Escrow Agent shall not be obligated to
accept any notice, make any delivery, or take any other action under this Escrow
Agreement unless the notice or request or demand for delivery or other action is
in writing and given or made by the party given the right or charged with the
obligation under this Escrow Agreement to give the notice or to make the request
or demand. In no event shall the Escrow Agent be obligated to accept any notice,
request, or demand from anyone other than the Company.
9. Liability of Escrow Agent. The Escrow Agent shall not be liable
for any damages, or have any obligations other than the duties prescribed herein
in carrying out or executing the purposes and intent of this Escrow Agreement;
provided, however, that nothing herein contained shall relieve the Escrow Agent
from liability arising out of its own willful misconduct or gross negligence.
The Escrow Agent's duties and obligations under this Agreement shall be entirely
administrative and not discretionary. The Escrow Agent shall not be liable to
any party hereto or to any third party as a result of any action or omission
taken or made by the Escrow Agent in good faith. The parties to this Agreement
will indemnify the Escrow Agent, hold the Escrow Agent harmless, and reimburse
the Escrow Agent from, against and for, any and all liabilities, costs, fees and
expenses (including reasonable attorney's fees) the Escrow Agent may suffer or
incur by reason of its execution and performance of this Agreement. In the event
any legal questions arise concerning the Escrow Agent's duties and obligations
hereunder, the Escrow Agent may consult with its counsel and rely without
liability upon written opinions given to it by such counsel.
The Escrow Agent shall be protected in acting upon any written notice,
request, waiver, consent, authorization, or other paper or document which the
Escrow Agent, in good faith, believes to be genuine and what it purports to be.
In the event that there shall be any disagreement between any of the
parties to this Agreement, or between them or either of any of them and any
other person, resulting in adverse claims or demands being made in connection
with this Agreement, or in the event Escrow Agent, in good faith, shall be 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 doubt
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 so refrain from acting until the dispute is
resolved by the parties involved.
Escrow Agent is acting solely as escrow agent and is not a party to, nor
has it reviewed or approved any agreement or matter of background related to
this Agreement, other than this Agreement itself, and has assumed, without
investigation, the authority of the individuals executing this Agreement to be
so authorized on behalf of the party or parties involved.
10. Resignation or Removal of Escrow Agent. The Escrow Agent may
resign as such following the giving of thirty (30) days' prior written notice to
the Company. Similarly, the Escrow Agent may be removed and replaced following
the giving of thirty (30) days' prior written notice to the Escrow Agent by the
Company.
In either event, the duties of the Escrow Agent shall terminate thirty
(30) days after the date of such notice (or as of such earlier date as may be
mutually agreeable); and the Escrow Agent shall then deliver the balance of the
Subscription Proceeds (and any interest paid or investment income earned thereon
while held by the Escrow Agent in an escrow account) in its possession to a
successor escrow agent as shall be appointed by the Company as evidenced by a
written notice filed with the Escrow Agent. If the Company shall have failed to
appoint a successor prior to the expiration of thirty (30) days following the
date of the notice of resignation or removal, the then acting Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
escrow agent or other appropriate relief; and any such resulting appointment
shall be binding upon all of the parties hereto.
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Upon acknowledgment by any successor escrow agent of the receipt of the
then remaining balance of the Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in an escrow
account), the then acting Escrow Agent shall be fully released and relieved of
all duties, responsibilities, and obligations under this Agreement.
11. Termination. This Agreement shall terminate and the Escrow Agent
shall have no further obligation with respect hereto upon the occurrence of the
distribution of all Subscription Proceeds (and any interest paid or investment
income earned thereon while held by the Escrow Agent in an escrow account) as
contemplated hereby or upon the written consent of all the parties hereto.
12. Notice. Any notices or instructions, or both, to be given
hereunder shall be validly given if set forth in writing and mailed by certified
mail, return receipt requested, as follows:
If to the Escrow Agent:
UMB Bank
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Summit Life Corporation:
Summit Life Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, President and Chief Operating Officer
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may designate any other address to which notices and
instructions shall be sent by notice duly given in accordance herewith.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
(b) This Agreement is binding upon and shall inure to the benefit
of the undersigned and their respective heirs, successors and assigns.
(c) This Agreement may be executed in multiple copies, each
executed copy to serve as an original.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
ESCROW AGENT
UMB BANK
By:
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Xxxx Xxxxx, Senior Vice President
COMPANY
SUMMIT LIFE CORPORATION
By:
-----------------------------------
Xxxxxxx X. Xxxxx, President & COO
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APPENDIX I TO ESCROW AGREEMENT
Compensation for Services of Escrow Agent
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Escrow Agent services shall be performed without charge to the Company;
provided however, that if the Escrow Agent is required to distribute refund
checks to Investors pursuant to Section 6 of the Escrow Agreement, the Company
agrees to pay Escrow Agent a fee of $1,000.00 plus $15.00 per disbursement.
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