ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into as to the day of
1999, by and between Atlas Mining Company ("Issuer"), 0000 Xxxx Xxxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxx 00000 and Idaho Independent Bank ("Escrow Agent"), 0000
Xxxxx Xxxxxxxxxx Xxx, Xxxxxx, Xxxxx 00000.
RECITALS:
A. Issuer proposes to offer for sale to subscribers 7,500,000 shares
("Shares") of the common capital stock of Atlas Mining Company. Each
share is offered at a price of One Dollar ($1.00) per Share, payable
at the time of subscription, and such payments, will be paid into the
escrow created by this Agreement.
B. The Offering is registered with the United States Securities and
Exchange Commission ("SEC") in accordance with the Securities Act of
1933 and the rules and regulations promulgated thereunder. Each
subscriber will be provided a prospectus ("Prospectus") and a
subscription agreement, which will be completed and submitted with
payment by cashiers check or wire transfer to the Escrow Agent.
C. Issuer desires to establish an escrow account in which funds received
from subscribers will be deposited pending completion of the Escrow
Period (as defined below). Idaho Independent Bank agrees to serve as
Escrow Agent in accordance with the terms and conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. Issuer hereby appoints Idaho Independent Bank as Escrow Agent and
Escrow Agent shall establish an escrow account (the "Escrow Account")
on its books styled "Atlas Mining Company Escrow Account." Commencing
upon the execution of this Agreement, Escrow Agent shall act as Escrow
Agent and hereby agrees to receive and disburse the proceeds from the
Offering of the Shares in accordance with the terms herewith. Issuer
agrees to notify the Escrow Agent promptly of the closing of the
Offering ("Closing") and sale of the Shares.
Wiring instructions for wire transfers into the escrow account are:
Idaho Independent Bank, Hayden, Idaho
ABA 000000000
Account Number 0200025575
Checks must be payable to "Atlas Mining Company Escrow Account."
2. Upon receipt of a wire transfer or check from a subscriber, Escrow
Agent will provide notice to Issuer of such. Escrow Agent will provide
the subscription agreement and the confirmed amount of consideration
for the Shares subscribed. Prior to Closing, the Issuer is aware and
understands that it is not entitled to any proceeds from subscriptions
deposited into the Escrow Account and no amounts deposited in the
Escrow Account during the Escrow Period (as defined below) shall
become the property of the Issuer or any other entity, or be subject
to the debts of the Issuer or any other entity.
3. The Escrow Period shall commence on the date hereof and shall
terminate upon the earlier to occur of the following dates:
(a) Ten (10) business days following the "Closing," which for the
purposes of this Agreement shall be 30 days after the effective
date of Issuer's registration statement with the SEC unless (i)
Issuer elects to continue to offer the Shares for sale until some
later date, as permitted by the Prospectus, and (ii) Issuer
notifies Escrow Agent in writing no later than ten (10) days of
such extension specifying the extended Closing Date;
(b) Ten (10) business days following the date upon which a
determination is made by the Issuer to terminate the Offering, as
communicated to Escrow Agent in writing; or
(c) Ten (10) business days after all shares offered are sold.
Not withstanding anything to the contrary contained herein, the
Closing date is intended to signify the date of the cessation of the
Offering as provided in the Prospectus, and not the termination of the
Escrow Period of this Agreement, and upon the occurrence of any of the
events described above, the Escrow Period shall continue for such ten
(10) business day period solely for the limited purposes of collecting
subscribers' checks which have been deposited prior to such event and
disbursing funds from the Escrow Account as provided herein. Escrow
Agent will not accept deposits of subscribers' checks after notice
that any of the events described above has occurred.
In no event will the Escrow Period last longer than 100 days. However,
failure to comply with this provision shall not entitle either party
to damages, compensatory or punitive, nor injunctive relief.
4. The Escrow Agent will deposit the subscribers' checks for collection
and credit the proceeds to the Escrow Account to be held by it under
the terms of this Agreement. Notwithstanding anything to the contrary
contained herein, Escrow Agent is under no duty or responsibility to
enforce collection of any checks delivered to Escrow Agent hereunder.
The Escrow Agent hereby is authorized to forward each check for
collection and deposit the proceeds in the Escrow Account. As an
alternative, the Escrow Agent may telephone the bank on which the
check is drawn to confirm that the check has been paid. Any item
returned to the Escrow Agent on its first presentation for payment
shall be returned to Issuer and need not be again presented by the
Escrow Agent for collection. For purposes of this Agreement, the term
"collected funds" or the term "collected" when referring to the
proceeds of subscribers' checks shall mean all funds received by
Escrow Agent that have cleared normal banking channels and are in the
form of cash.
5. If Issuer notifies the Escrow Agent in writing that Issuer elects to
terminate the Offering as provided in paragraph 3 (b) above, the
Escrow Agent shall then issue and mail its bank checks to the
subscribers in the amount of the subscribers' respective checks,
without deduction, penalty or expense to the subscriber, and shall,
for this purpose, be authorized to rely upon the names and addresses
of the subscribers furnished to it as contemplated above. The purchase
money returned to each subscriber shall be free and clear of any and
all claims of the Issuer and any of its creditors. For each
subscription for which the Escrow Agent has not collected funds but
has submitted the subscriber's check for collection, the Escrow Agent
shall promptly issue a check to such subscriber in the amount of the
collected funds from such subscriber's check after the Escrow Agent
has collected such funds. If Escrow Agent has not yet submitted such
subscriber's check for collection, the Escrow Agent shall promptly
remit the subscriber's check directly to such subscriber.
At such time as Escrow Agent shall have made the payments and
remittances provided in the Agreement, the Escrow Agent shall be
completely discharged and released of any and all further liabilities
and responsibilities hereunder.
6. As consideration for its agreement to act as Escrow Agent as herein
described, Issuer agrees to pay the Escrow Agent an administration fee
of $7,500.00 upon execution of this Agreement, plus the fees described
on the attached fee schedule. Further, Issuer agrees to pay all
disbursements and advances incurred or made by the Escrow Agent in
performance of its duties hereunder, including reasonable fees,
expenses and disbursements of its counsel, all in accordance with the
attached fee schedule or the other provisions of this Agreement.
If the Issuer rejects any subscription for which Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a
refund check to the rejected subscriber in the amount of the
subscriber's check. If the Issuer rejects any subscription for which
the Escrow Agent has not yet collected funds but has submitted the
subscriber's check for collection, the Escrow Agent shall promptly
issue a check in the amount of the collected funds from the
subscriber's check to the rejected subscriber after the Escrow Agent
has cleared such funds. If Escrow Agent has not yet submitted a
rejected subscriber's check for collection, the Escrow Agent shall
promptly remit the subscriber's check directly to the subscriber.
7. This Agreement shall automatically terminate upon the earlier of (i)
twenty (20) days after the Closing or (ii) twenty (20) days after the
date upon which the Escrow Agent has delivered the final portion of
Escrow Account funds pursuant to the terms of this Agreement.
8. Escrow Agent reserves the right to resign hereunder, upon ten (30)
days prior written notice to Issuer, except that Escrow Agent will not
resign while the Offering is open. In the event of said resignation,
and prior to the effective date thereof, Issuer, by written notice to
Escrow Agent shall designate a successor escrow agent to assume the
responsibilities of Escrow Agent under this Agreement, and Escrow
Agent immediately shall deliver any undisbursed Escrow Account funds
to such successor escrow agent. If Issuer shall fail to designate such
a successor escrow agent within such time period, the Escrow Agent may
deliver any undisbursed funds into the registry of any court having
jurisdiction.
9. The Escrow Agent shall have no responsibility except for the
investment, safekeeping and delivery of the amounts deposited in the
Escrow Account in accordance with this Agreement. The Escrow Agent
shall not be liable for any act done or omitted to be done under this
Agreement or in connection with the amounts deposited in the Escrow
Account, except as a result of the Escrow Agent's gross negligence or
willful misconduct. The Escrow Agent is not a party to nor is it bound
by, nor need it give consideration to the terms or provisions of, even
though it may have knowledge of (i) any agreement or undertaking by,
between or among the Issuer and any other party, except this
Agreement, (ii) any agreement or undertaking that may be evidenced by
this Agreement, (iii) any other agreements that may now or in the
future be deposited with the Escrow Agent in connection with this
Agreement. The Escrow Agent is not a party to, is not responsible for,
and makes no representations with respect to the offer, sale or
distribution of the Shares including, but not limited to, matters set
forth in any offering documents prepared and distributed in connection
with the offer, sale and distribution of the Shares.
10. The Escrow Agent has no duty to determine or inquire into any
happening or occurrence of or of any performance or failure of
performance of the Issuer or of any other party with respect to
agreements or arrangements with any other party. If any question,
dispute or disagreement arises among the parties hereto and/or any
other party with respect to the funds deposited in the Escrow Account
of the proper interpretation of this Agreement, the Escrow Agent shall
not be required to act and shall not be held liable for refusal to act
until the question or dispute is settled, and the Escrow Agent has the
absolute right at its discretion to do either or both of the
following:
(i) withhold and/or stop all further performance under this
Agreement until the Escrow Agent is satisfied, by receipt of
a written document in form and substance satisfactory to the
Escrow Agent and executed and binding upon all interested
parties hereto (who may include the subscribers), that the
question, dispute, or disagreement had been resolved; or
(ii) file a suit in interpleader and obtain by final judgment,
rendered by a court of competent jurisdiction, an order
binding all parties interested in the matter.
The Escrow Agent may consult with counsel of its own choice and shall have full
and complete authorization and protection for and shall not be liable for any
action taken or suffered by it hereunder in good faith and believed by it to be
authorized hereby under this agreement or applicable laws.
11. The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth in this Agreement and may rely
and shall be protected in acting or refraining from acting upon any
written notice, instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by
the proper party or parties and to take statements made therein as
authorized and correct without any affirmative duty of investigation.
12. The Escrow Agent shall not be liable to any person for anything which
it may do or refrain from doing in connection with this agreement,
including the Escrow Agent's own negligence, but excluding the Escrow
Agent's own gross negligence or willful malfeasance. In no event shall
the Escrow Agent be liable to any third party for special, indirect,
or consequential damages, or loss profits or loss of business, arising
under or in connection with this agreement.
13. The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by all of the
other parties hereto and , if its duties as Escrow Agent hereunder are
affected thereby, unless it shall have given prior written consent
thereto.
The following are miscellaneous provisions applying to all parties:
14. Notices required to be sent hereunder shall be delivered by hand, sent
by an express mail service or sent via United States mail, postage
prepaid, certified, return receipt requested, to the following
addresses:
If to Issuer:
Atlas Mining Company
0000 X. Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
If to Escrow Agent:
Idaho Independent Bank
0000 Xxxxx Xxxxxxxxxx Xxx
Xxxxxx, Xxxxx 00000
From time to time any party hereto may designate an address other than the
address listed above by giving the other parties hereto not less than five
(5) days advance notice of such change in address in accordance with the
provisions hereof.
15. This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Idaho and the laws of the United States applicable to
transactions in Idaho.
16. No right or remedy in this Agreement is intended to be exclusive of any
right or remedy. Neither this Agreement nor the exercise by either party of
(or the failure to so exercise) any rights, power or remedy conferred
herein or by law shall be construed as relieving any person liable from
full liability.
17. No delay or omission by either party to exercise any right or remedy shall
impair such right or remedy or any other right or remedy or shall be
construed to be a waiver of any default or an acquiescence therein.
18. The invalidity or unenforceability of any of the rights or remedies herein
provided in any jurisdiction shall not in any way affect the right to the
endorsement in such jurisdiction or elsewhere of any of the other rights or
remedies herein provided.
19. This Agreement shall be binding upon and inure to the benefit of the
respective heirs, successors, representatives and authorized assigns of the
parties.
20. This Agreement embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof.
21. The headings in this Agreement are for the purpose of reference only, and
shall not limit or otherwise affect any of the terms hereof.
EXECUTED on the date first written above.
ISSUER:
Atlas Mining Company
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
By: /s/
----------------------------
, Chairman of the Board
ESCROW AGENT:
Idaho Independent Bank
By: /s/ Xxxxx Xxxxxxxx
----------------------------
Printed Name: Xxxxx Xxxxxxxx
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Title: Manager
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