ESCROW INSTRUCTIONS
(Securities Offering)
These Escrow Instructions are given by United Management, Inc., a Nevada
corporation (the "Company") to City National Bank, a national banking
association ("Escrow Holder").
1. OFFERING: The Company desires to offer 288,420 shares of common stock at, on
a best efforts basis, at a price of $0.40 per share (the "Shares"), payable
$115,368 in cash(the "Offering Document") as more particularly set forth in the
Company's definitive Prospectus dated November 28, 2000, a copy of which has
been delivered to Escrow Holder (the "Disclosure Document"). Escrow Holder is
not to be concerned with the Disclosure Document, except as specifically set
forth below.
2. ESTABLISHMENT OF THE ESCROW:
(a) DEPOSIT OF OFFERING PROCEEDS: Escrow Holder will open one or more
Escrow Holders (the "Escrow"), and the Company will deliver to Escrow Holder
from time to time for deposit into the Escrow the full amount of each payment
received from each purchaser (the "Purchase Price"), together with a full copy
of the Share Purchase Agreement executed by such purchaser, showing the name,
address and taxpayer identification number of such purchaser, the number of
shares purchased for and the amount paid therefor and an I.R.S. Form W-9, as
applicable, completed and executed by each purchaser. Escrow Holder shall have
no obligation to accept monies, documents or instructions from any party other
than the Company with respect to the Escrow. All monies so deposited will be in
the form of a purchaser's personal check in favor of "City National Bank -
United Management, Inc." Should any such check be returned to Escrow Holder as
uncorrectable for any reason, Escrow Holder will charge the amount of such
unpaid check to Escrow, notify the Company of the amount of such return check,
the name of the purchaser and the reason for return, and hold such check subject
to further instructions from the Company. Escrow Holder will hold all monies and
other property in the escrow free from any lien, claim or offset, except as set
forth herein, and such monies and other property shall not become the property
of the Company, nor subject to the debts thereof, unless the conditions set
forth in these instructions to disbursement of such monies to the Company have
been fully satisfied.
(b) DEPOSIT OF SHARE CERTIFICATES: All share certificates representing the
Shares issued in connection with the Company's offering shall also be deposited
by the Company directly with the Escrow Holder promptly upon issuance. Such
certificates shall be held in safekeeping at capacity only. The identity of the
purchasers of the securities shall be included on the stock certificates or
other documents evidencing such securities. Securities held by the Escrow Holder
are to remain as issued and deposited and shall be held for the sole benefit of
the purchasers, who shall have voting rights with respect to securities held in
their names, as provided by applicable state law. No transfer or other
disposition of securities held by the Escrow Holder or any interest related such
securities shall be permitted other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Internal Revenue code of 1986 as amended [26 U.S.C. 1 et seq.], or Title 1
of the Employee Retirement Income Security Act [29
<PAGE>
2
U.S.C. 1001 et seq.], or the rules thereunder.
3. INVESTMENT: All funds will be held by Escrow Holder in a Money Market
Investment Account bearing interest at Escrow Holder's then applicable rate. No
funds will earn interest until Escrow Holder receives an I.R.S. Form W-9
completed and executed by the Company and the purchaser's check has been
collected in good funds.
4. (a) CANCELLATION BY THE COMPANY: The Company may reject or cancel any
subscription in whole or in part. If the Purchase Price for such rejected or
cancelled subscription has been delivered to Escrow Holder, the Company will
inform Escrow Holder of the rejection or cancellation, and Escrow Holder upon
receiving such notice will refund to the purchaser the Purchase Price.
(b) CANCELLATION BY PURCHASERS: All Subscriptions are irrevocable, and no
purchaser will have any right to cancel or rescind the subscription, except as
required under the law of any jurisdiction in which the shares are sold.
5. CLOSING: The Escrow will remain open until the earliest to occur of the
following (the "Closing Date"):
(a) Disbursement of the Escrow Account:Upon the earlier of (i) receipt by
the Escrow Holder of a signed representation from the Company to the Escrow
Holder, that the Escrow Holder may disburse all monies, stock certificates,
instruments and other documents in the Escrow and safekeeping to the Company or
as otherwise instructed by the Company; or (ii) written notification from the
Company to the Escrow Holder to deliver the monies, instruments and other
documents in the Escrow and safekeeping to another escrow holder in accordance
with Paragraph 11.
(b) Five o'clock P.M. on May 13, 2002. The offering may be extended till
August 13, 2002, an additional 90 days at the Company's sole election.
If, upon the Closing Date, Escrow Holder has not received the funds constituting
the Offering Amount, or if, subsequent to the Closing Date, checks are returned
unpaid such that Escrow Holder no longer holds funds constituting the Offering
Amount in the Escrow, Escrow Holder will refund all the monies in the Escrow to
the purchasers without further notice to the Company. Under no circumstances
will Escrow Holder be required to disburse any monies until the check therefore
has been collected in good funds.
6. INSTRUCTIONS AND AMENDMENTS: All notices and instructions to Escrow Holder
must be in writing and may be delivered personally or mailed, certified or
registered mail, return receipt requested, addressed to City National Bank, 400
N. Roxbury Dr., 6th Floor, Beverly
<PAGE>
3
Hills, California, 90210, Attention: Sue Behning/VP, Senior Trust Officer/CNI -
TRUST DEPARTMENT. All such notices and instructions will be deemed given when
received by Escrow Holder, as shown on the receipt therefore. All Instructions
from the Company will be signed by Christine Cerisse. Unless otherwise provided
herein, these instructions may be amended or further instructions given only to
the extent that such amendments or instructions are consistent with, and do not
add materially to, the description of the Escrow contained in the Disclosure
document, unless consented to in writing by all purchasers whose Purchase Prices
have been received by Escrow Holder therefore and unless disclosed to all
purchasers thereafter.
7. FEES: Escrow Holder shall be entitled to an initial, non refundable, set-up
fee of $2,000 payable concurrently with its acceptance, and upon opening of this
Escrow, plus actual expenses incurred in performing its duties hereunder. The
Company or partnership will pay Escrow Holder's fees and expenses provided that
upon the close of the escrow, Escrow Holder may withhold from any amounts
disbursed to the Company the amount of its then earned but unpaid fees and
expenses. Fees will be charged pursuant to the fee schedule attached hereto and
incorporated herein by reference.
8. EXCULPATION: Escrow Holder will not be liable for:
(a) The genuineness, sufficiency, correctness as to form, manner of
execution or validity of any instrument deposited in the Escrow, nor the
identity, authority or rights of any person executing the same.
(b) Any misrepresentation or omission in the Disclosure Document or any
failure to keep or comply with any of the provisions of any agreement, contract,
or other instrument referred to therein; or
(c) The failure of the Company to transmit, or any delay in transmitting
any purchaser's Purchase Price to Escrow Holder.
Escrow Holder's duties hereunder shall be limited to the safekeeping of monies,
instruments or other documents received by the Escrow Holder into the Escrow,
and for the disposition of same in accordance with this Escrow Agreement and any
further instructions pursuant to this Escrow Agreement.
9. INTERPLEADER: In the event conflicting demands are made or notices served
upon Escrow Holder with respect to the Escrow, Escrow Holder shall have the
absolute right at its election to do either or both of the following:
<PAGE>
4
(a) Withhold and stop all further proceedings in, and performance of, this
escrow; or
(b) File a suit in interpleader and obtain an order from the court
requiring the parties to litigate their several claims and rights among
themselves. In the event such interpleader suit is brought, Escrow Holder shall
be fully released from any obligation to perform any further duties imposed upon
it hereunder, and the Company shall pay Escrow Holder all costs, expenses and
reasonable attorney's fees expended or incurred by Escrow Holder, (or allocable
to its in-house counsel), the amount thereof to be fixed and a judgment thereof
to be rendered by the court in such suit.
10. INDEMNITY: The Company further agrees to pay on demand, and to indemnify and
hold Escrow Holder harmless from and against, all cost, damages, judgments,
attorney's fees, expenses, obligations and liabilities of any kind or nature
which, in good faith, Escrow Holder may incur or sustain in connection with or
arising out of the Escrow and Escrow Holder is hereby given a lien upon all the
rights, titles, interest of the Company in monies and other property deposited
in the Escrow, to protect Escrow Holder's rights and to indemnify and reimburse
Escrow Holder under these Escrow Instructions.
11. RESIGNATION OF ESCROW HOLDER: Escrow Holder may resign herefrom upon
fourteen (14) days' written notice to the Company and shall thereupon be fully
released from any obligation to perform any further duties imposed upon it
hereunder. Escrow Holder will transfer all files and records relating to the
Escrow to any successor escrow holder upon receipt of a copy of executed escrow
instructions designating such successor.
13. FACSIMILE: The Company agrees that Escrow Holder may, but need not, honor
and follow instructions, amendments or other orders ("orders") which shall be
provided by telephone facsimile transmission ("faxed") to Escrow Holder in
connection with this escrow and may act thereon without further inquiry and
regardless of by whom or by what means the actual or purported signature of the
Company may have been affixed thereto if such signature in Escrow Holder's sole
judgment resembles the signature of the Company. The Company indemnifies and
holds Escrow Holder free and harmless from any and all liability, suits, claims
or causes of action which may arise from loss or claim of loss resulting from
any forged, improper, wrongful or unauthorized faxed order. The Company agrees
to pay all attorney fees and cost incurred by Escrow Holder (or allocable to its
in-house counsel), in connection with said claim(s).
14. OTHER:
(a) Time is of the essence of these and all additional or changed
instructions.
<PAGE>
(b) These Escrow Instructions may be executed in counterparts, each of
which so executed shall, irrespective of the date of its execution and delivery,
be deemed an original, and said counterparts together shall constitute one and
the same instrument.
(c) These Escrow Instructions shall be governed by, and shall be construed
according to, the laws of the State of California.
(d) The Company will not make any reference to City National Bank in
connection with the Offering except with respect to its role as Escrow Holder
hereunder, and in no event will the Company state or imply the Escrow Holder has
investigated or endorsed the offering in any manner whatsoever.
IN WITNESS WHEREOF, The parties have executed these Escrow Instructions as
of the date set forth beside such parties' signature below.
"COMPANY"
Name: United Management, Inc.
Address: Suite 104, 1456 St. Paul
Street, Kelowna, British Columbia, Canada
V1Y 2E6
Phone Number: (604)681-7806
Fax Number: (604)681-7846
By: /s/ Christine Cerisse
--------------------------
Christine M. Cerisse
Its: President and Director
Date: October 30, 2000
"ESCROW HOLDER"
Name: City National Bank, a National Banking Association
Address: 400 North Roxbury Drive, Suite 600
Beverly Hills, California. 90210
By: /s/ Sue Behning
--------------------------
Sue Behning
Its: Vice President
Date: November 29, 2000
