ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is made and entered into this
21st Day of July, 2000, by and between the undersigned Selling Shareholders of
shares of common stock of Westnet Communication Group, Inc., a Nevada
corporation in good standing ("Selling Shareholders"), and Southwest Escrow
Company, of Las Vegas, Nevada ("Escrow Agent").
WHEREAS, Selling Shareholders intend to sell shares of common stock of
Westnet Communication Group, Inc. (the "Issuer"), such sale to be conducted
pursuant to a registration statement on Form SB-2 ("Form SB-2") under the Act
filed with the Securities and Exchange Commission ("SEC") ("the Offering");
WHEREAS, Westnet Communication Group, Inc. is deemed to be a Blank Check
issuer as that term is defined by subsection (a)(2) of Rule 419 ("Rule 419") of
Regulation C under the Securities Act of 1933, as amended (the "Act"),
WHEREAS, Selling Shareholders desire to utilize Escrow Agent's services
under the terms and conditions herein provided to satisfy the restrictions and
requirements imposed on the Offering by Rule 419.
Agreement
NOW, THEREFORE, based on the foregoing premises and for and in
consideration of the mutual promises and covenants hereinafter set forth, the
Parties hereby agree as follows:
1. Appointment of Escrow Agent. In connection with Selling Shareholders'
proposed offering of shares of Common Stock to be conducted after such
shares are registered, Selling Shareholders appoint Southwest Escrow
Company as escrow agent in connection with the Offering In connection
with the Rule 419 offering:
a. Escrow Agent shall receive and hold all shares of Common stock
sold in connection with the offering pursuant to the terms set
forth in the Agreement and in accordance with Rule 419; deposit
the gross proceeds from the offering promptly into an escrow
account maintained by an "insured depository institution," or into
a separate bank account; and maintain in good faith and in the
regular course of business the escrow account records of the
insured depository institution, or separate bank account,
providing the funds in the escrow account are held for the benefit
of the purchasers and showing the name and interest of each party
to the account.
b. The Escrow Agent shall receive compensation of:
i. An Establishment Fee equal to Seven Hundred Fifty
Dollars($750.00) upon execution of this Agreement;
ii. The amounts on Escrow Agent's Schedule of Fees and Services,
for corresponding activities.
2. Duties of Escrow Agent.
a. In connection with the Rule 419 offering, the Escrow Agent shall:
i. Receive and hold all shares of Common Stock issued in
connection with the offering pursuant to the terms set forth
in this Agreement and in accordance with Rule 419;
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ii. Deposit the gross proceeds from the offering promptly into
an escrow account ("Escrow Account") maintained by an
"insured depository institution," or into a separate bank
account; and
iii. Maintain in good faith and in the regular course of business
Escrow Account records of the insured depository
institution, or separate bank account, providing that the
funds in the Escrow Account are held for the benefit of the
purchasers and showing the name and interest of each party
to the account.
b. The Escrow Agent shall be responsible for establishing the Escrow
Account into which the securities to be sold and the funds to be
received in connection with Selling Shareholders proposed offering
shall be deposited and held until an acquisition meeting the
criteria specified in Rule 419 is completed.
c. The Escrow Agent is not responsible for any act or failure to act
on its part, except in the case of its own willful misconduct or
gross negligence. The Escrow Agent shall not be liable for any
error of judgment or for any act done or step taken or omitted in
good faith, or for any mistake of fact or law for anything which
it may do or refrain from doing in connection therewith, except
for its own willful misconduct.
d. The Escrow Agent is not a party to or bound by any agreement
pertaining to the transaction or any other agreement between the
Parties, except this Agreement.
e. In the event of any disagreement between the Parties or any person
resulting in adverse claims or demands being made in connection
with or for any of the amount in escrow, 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 to
initiate a legal proceeding, including but not limited to an
impleader action, to have the dispute resolved. Until resolution
of any such disagreement, Escrow Agent may refuse to deliver or
otherwise dispose of funds until:
i. The rights of the adverse claimant have been finally
adjudicated in the court assuming and having jurisdiction of
the parties and the amount in escrow; or
ii. The differences shall have been adjusted by agreement among
the affected Parties and the Escrow Agent shall have been
notified thereof in writing signed by the interested
Parties.
f. The duties of the Escrow Agent hereunder are entirely ministerial,
being limited to receiving, holding, and disbursing the amount in
escrow as provided herein. The Escrow Agent may rely upon and will
be protected in acting upon any paper or other document which may
be submitted to it in connection with its duties hereunder and
which is believed by it to be genuine and to have been signed by
the proper party or parties or their representatives, and shall
have no liability or responsibility with respect to the form,
execution, or validity thereof.
<PAGE>
3. Deposit and Investment of Offering Proceeds. The proceeds from the Selling
Shareholders' offering will be deposited as follows:
a. All offering proceeds, after deduction of cash paid for
underwriting commissions, underwriting expenses, dealer
allowances, and amounts permitted to be released to the Selling
Shareholders pursuant to Rule 419 (b)(2)(vi) and Paragraph 5
herein, shall be deposited promptly into the Escrow Account.
b. Deposited proceeds shall only be invested in an obligation that
constitutes a "deposit", as that term is defined in section 3(1)
of the Federal Deposit Insurance Act.
c. Interest or dividends earned on the funds, if any, shall be held
in the Escrow Account until the funds are released. If funds held
in the Escrow Account are released to a purchaser of the
securities, the purchasers shall receive interest or dividends
earned, if any, on such funds until the date of release. If funds
held in the Escrow Account are released to the Selling
Shareholders , interest or dividends earned on such funds up to
the date of release shall be released to the Selling Shareholders.
4. Deposit of Securities.
a. All securities sold in connection with the offering, whether or
not for cash consideration, and any other securities issued with
respect to such securities, including securities issued with
respect to stock splits, stock dividends, or similar rights, shall
be deposited directly into the Escrow Account promptly upon
execution of a purchase and sale agreement between the Selling
Shareholders and the purchaser of shares. The identity of the
purchaser of the securities shall be included on the stock
certificates or other documents evidencing such securities.
b. Securities held in the Escrow Account are to remain as deposited
and shall be held for the sole benefit of the purchasers, who
shall have voting rights, if any, with respect to securities held
in their names, as provided by applicable state law. No transfer
or other disposition of securities held in the Escrow Account or
any interest related to 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 [26 U.S.C. 1 et seq.], or the rules
thereunder.
<PAGE>
5. Distribution and Release of Deposited Securities and Funds.
a. The actual amount of finders' fees and commissions, if any,
incurred by Selling Shareholders in connection with the offering
shall be deducted from the funds held in escrow and be released to
the Selling Shareholders prior to the consummation of a business
combination, as provided by Rule 419.
b. The securities held in the Escrow Account shall be delivered to
the purchaser or other registered holder identified on the
deposited securities only at the same time as, or, after:
i. The Escrow Agent has received a signed representation from
the Selling Shareholders that the requirements of paragraphs
(e)(1) and (e)(2) of Rule 419 have been met including a
receipt by Selling Shareholders of Rule 419(e) (2) (iii)
confirmations from purchasers of at least 75% of the shares
sold; and
ii. Consummation of an acquisition(s) meeting the requirements
of paragraph (e)(2)(iii) of Rule 419.
6. Notice.
a. Any notice or correspondence with the Escrow Agreement shall be
deemed sufficient if delivered, or deposited in the United States
Mail, First Class Postage prepaid for delivery as follows:
Selling Shareholders: Escrow Company:
Selling Shareholders Southwest Escrow Company
c/o Westnet
2921 N. Tenaya Way, Ste 216 401 N. Buffalo Drive, Suite 205
Las Vegas, NV 89128 Las Vegas, Nevada 89145
b. Selling shareholders may, from time to time, designate one of
their members, or another person, to act on their behalf in
connection with acts and notices relating to this Agreement.
Escrow Agent shall be entitled to rely on, and be free from
liability arising from reliance on, a Power of Attorney or other
document executed by each undersigned selling shareholder
designating such other person to act in his behalf.
7. Termination of Offering by Selling Shareholders. In the event the Selling
Shareholders elect to terminate the Offering prior to the occurrence of the
events specified in Paragraph 5 herein, the Selling Shareholders shall
notify Escrow Agent that the offering has been terminated and the
registration statement withdrawn, whereupon Escrow Agent shall return
securities to Selling Shareholders, and shall return funds, together with
any interest or dividends earned, to prospective purchasers.
8. Governing Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the State of Nevada.
<PAGE>
The below signatures by the authorized representatives of the Selling
Shareholders and Escrow Agent witness their respective agreement to act in
accordance with the terms hereof.
Selling Shareholders:
/s/ Elizabeth A. Sanders /s/Kristy B. Warren
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Selling Shareholder Selling Shareholder
/s/ Nancy J. Cooke /s/ Connie C. Ross
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Selling Shareholder Selling Shareholder
/s/ Brice A. Smith /s/ Gary Grieco
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Corporate Capital Kidadus Consulting, Ltd.
Formation, Inc. Selling Shareholder
Selling Shareholder
/s/ Dennis Sutton
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Transint Holdings and
Consultancy, Inc.
Selling Shareholder
Escrow Agent:
/s/ Dale Puhl
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Southwest Escrow Company
