ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") dated as of this ______ day of
November, 2000 by and among Crest View, Inc., a Nevada corporation, with an
address at 1700 W. Horizon Ridge Parkway, Suite 101, Henderson, NV 89102 (the
"Corporation"), and Southwest Escrow Company, a financial institution chartered
under the laws of the State of Nevada, with an address at 401 North Buffalo,
Suite 205, Las Vegas, NV 89145 (the "Agent").
W I T N E S S E T H:
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WHEREAS, the Corporation is offering, on a "best efforts" basis (the
"Offering"), 600,000 units (the "Units"), each Unit consisting of one share of
common stock, $.001 par value (the "Common Stock"), and one-third Class A
Redeemable Common Stock Purchase Warrant ("Class A Warrants"), whereby the
holder of three (3) Units is entitled to exercise one Class A Warrant to
purchase one share of Common Stock and one Class B Redeemable Stock Purchase
Warrant (the "Class B Warrants" and, together with the Class A Warrants, the
"Warrants") to purchase one share of Common Stock;
WHEREAS, each subscriber in the Offering will enter into a Subscription
Agreement with the Corporation;
WHEREAS, the non-public stockholders of the Corporation have purchased an
aggregate of 3,000,000 shares of Common Stock and 1,000,000 Class A Warrants
(the "Non- Public Stockholders");
WHEREAS, the Corporation is a "blank check" company within the meaning of
Rule 419 ("Rule 419") of the Securities Act of 1933, as amended (the "Act"); and
WHEREAS, Rule 419 provides that:
(a) The securities to be issued and the funds received in the Offering and
from the Non-Public Stockholders be deposited and held in an escrow account
until an acquisition meeting specified criteria is completed;
(b) Before the acquisition can be completed and before the funds and
securities can be released, the Corporation is required to update its
Registration Statement on Form SB-2 first filed on September 13, 2000 with the
Securities and Exchange Commission (the "Registration Statement") with a
post-effective amendment (the "Post-Effective Amendment") and, after the
effective date of the Post-Effective Amendment (the "Effective Date"), the
Corporation is required to furnish the subscribers and the Non-Public
Stockholders with a supplemental prospectus (which forms a part of the
Post-Effective Amendment to the Registration Statement) containing specified
information, including a discussion of the business and the audited financial
statements of the proposed acquisition candidates;
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(c) The subcribers and the Non-Public Stockholders must have no less than
20 and no more than 45 days (the "Option Period") from the Effective Date to
decide whether to remain a subscriber or Non-Public Stockholder or require the
return of their funds ("Optional Investor Termination");
(d) Any subscriber or Non-Public Stockholder not making any decision within
the Option Period is automatically deemed an Optional Investor Termination;
(e) Unless at least 80% in interest of the subscribers and the Non-Public
Stockholders elect to remain subscribers and Non-Public Stockholders, all of the
funds held in escrow by the Agent must be returned to all subscribers and
Non-Public Stockholders and none of the securities will be issued ("Mandatory
Investor Termination"); and
(f) If the Corporation does not complete an acquisition meeting the
specified criteria within 18 months, all of the deposited funds must be returned
to the subscribers and the Non-Public Stockholders ("Company Termination").
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound, the parties hereby agree as follows:
1. Appointment of Agent. The Corporation hereby appoints Southwest Escrow
Company as escrow agent in accordance with the terms and conditions set forth
herein, and the Agent hereby accepts such appointment.
2. Delivery of Subscription Proceeds and Units.
2.1 All checks, drafts, or other instruments received from subscribers
and Non-Public Stockholders for the Units will be delivered by the Corporation
to the Agent, made payable to "Southwest Escrow Company, as Escrow Agent for
Crest View, Inc." or "Crest View, Inc.-Southwest Escrow Company, as Escrow
Agent" together with, as to each subscriber or Non-Public Stockholder, his name,
address, social security number or employer identification number, number of
Units subscribed for or purchased, and the amount paid in connection with such
subscription or purchase. The Agent is hereby empowered on behalf of the
Corporation to endorse and collect all checks, drafts, wire funds transfers,
promissory notes or other instruments received on account of subscriptions for
or purchase of Units. Upon Agent's confirmation of receipt of funds from the
subscribers and the Non-Public Stockholders, it shall telephonically advise the
Corporation, or the Corporation's designated attorney or agent, of the amount of
funds the Agent has received.
2.2 Upon receipt of each Agent's notice provided for in Section 2.1, the
Corporation shall deliver to the Agent Common Stock certificates and Warrants
representing the proportionate number of Units subscribed for or purchased by
each such subscriber or Non- Public Stockholder.
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3. Agent to Hold and Disburse Funds and/or Units. The Agent will hold in a
special account established for the benefit of the Corporation and disburse all
funds, Common Stock certificates and Warrants received by it pursuant to the
terms of this Agreement, as follows:
3.1 In the event that neither a Mandatory Investor Termination nor a
Company Termination has occurred and the Corporation completes an acquisition
meeting the specified criteria, the Agent will, pursuant to written instructions
signed by the Corporation, pay to the Corporation, and/or to any other person
designated in such instructions, the proceeds received by the Agent from the
sale of such Units available after deducting the funds returned pursuant to
subsection 3.3 and deliver the Units to the subscribers and the Non-Public
Stockholders other than those subscribers and the Non-Public Stockholders
requesting their subscription funds returned pursuant to subsection 3.3.
3.2 In the event of either a Mandatory Investor Termination or a Company
Termination, as the case may be, the Agent shall, within 15 business days after
such date, as the case may be, return to the subscribers and the Non-Public
Stockholders the respective amounts which such subscribers or Non-Public
Stockholders have paid, with interest, and return the Common Stock certificates
and Warrants to the Corporation.
3.3 In the event of an Optional Investor Termination, the Agent will,
pursuant to written instructions signed by such subscriber or Non-Public
Stockholder, return to such subscriber or Non-Public Stockholder the amount
which such subscriber or Non-Public Stockholder paid, with interest and return a
proportionate number of Common Stock certificates and Warrants to the
Corporation.
3.4 All funds received by the Agent pursuant to the terms of this
Agreement may be invested in a bank money market account or invested in United
States Government instruments.
4. Exculpation and Indemnification of Agent.
4.1 The Agent shall have no duties or responsibilities other than those
expressly set forth herein. The Agent shall have no duty to enforce any
obligation of any person to make any payment or delivery, or to direct or cause
any payment or delivery to be made, or to enforce any obligation of any person
to perform any other act. The Agent shall be under no liability to the other
parties hereto or to anyone else by reason of any failure on the part of any
party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person's obligations under any such
document. Except for amendments to this Agreement referred to below, and except
for instructions given to the Agent by the Corporation, the subscribers and the
Non-Public Stockholders relating to the escrow deposit under this Agreement, the
Agent shall not be obligated to recognize any agreement between any and all of
the persons referred to herein, notwithstanding that references thereto may be
made herein and whether or not it has knowledge thereof.
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4.2 The Agent shall not be liable to the Corporation or to anyone else
for any action taken or omitted by it, or any action suffered by it to be taken
or omitted, in good faith and in the exercise of its own best judgment. The
Agent may rely conclusively and shall be protected in acting upon any order,
notice, demand, certificate, opinion or advice of counsel (including counsel
chosen by the Agent), statement, instrument, report or other paper or document
(not only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information
therein contained), which is believed by the Agent to be genuine and to be
signed or presented by the proper person or persons. The Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement or any of the terms thereof, unless evidenced by a
writing delivered to the Agent signed by the proper party or parties and, if the
duties or rights of the Agent are affected, unless it shall give its prior
written consent thereto.
4.3 The Agent shall not be responsible for the sufficiency or accuracy
of the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Agent be responsible or liable to the
other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Agent shall have no responsibility with respect to the use or application of any
funds or other property paid or delivered by the Agent pursuant to the
provisions hereof. The Agent shall not be liable to the Corporation or to anyone
else for any loss which may be incurred by reason of any investment of any
monies which it holds hereunder provided the Agent has complied with the
provisions of Section 3 hereunder.
4.4 The Agent shall have the right to assume in the absence of written
notice to the contrary from the proper person or persons that a fact or an event
by reason of which an action would or might be taken by the Agent does not exist
or has not occurred, without incurring liability to the other parties hereto or
to anyone else for any action taken or omitted, or any action suffered by it to
be taken or omitted, in good faith and in the exercise of its own best judgment,
in reliance upon such assumption.
4.5 To the extent that the Agent becomes liable for the payment of
taxes, including withholding taxes, in respect of income derived from the
investment of funds held hereunder or any payment made hereunder, the Agent may
pay such taxes. The Agent may withhold from any payment of monies held by it
hereunder such amount as the Agent estimates to be sufficient to provide for the
payment of such taxes not yet paid, and may use the sum withheld for that
purpose. The Agent shall be indemnified and held harmless against any liability
for taxes and for any penalties or interest in respect of taxes, on such
investment income or payments in the manner provided in Section 4.6.
4.6 The Agent will be indemnified and held harmless by the Corporation
from and against any and all expenses, including reasonable counsel fees and
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disbursements, or loss suffered by the Agent in connection with any action, suit
or other proceeding involving any claim, or in connection with any claim or
demand, which in any way, directly or indirectly, arises out of or relates to
this Agreement, the services of the Agent hereunder, the monies or other
property held by it hereunder or any income earned from investment of such
monies. The Agent shall have a lien for the amount of any such expenses or loss
on the monies and other property held by it hereunder and shall be entitled to
reimburse itself from such monies or property for the amount of any such expense
or loss. Promptly after the receipt by the Agent or notice of any demand or
claim or the commencement of any action, suit or proceeding, the Agent shall, if
a claim in respect thereof is to be made against the Corporation, notify the
Corporation thereof in writing, but the failure by the Agent to give such notice
shall not relieve the Corporation from any liability which the Corporation may
have to the Agent hereunder. Notwithstanding any obligation to make payments and
deliveries hereunder, the Agent may retain and hold for such time as it deems
necessary such amount of monies or property as it shall, from time to time, in
its sole discretion, deem sufficient to indemnify itself for any such loss or
expense and for any amounts due it under Section 7.
4.7 For the purposes hereof, the term "expense or loss" shall include
all amounts paid or payable to satisfy any claim, demand or liability, or in
settlement of any claim, demand, action, suit or proceeding settled with the
express written consent of the Agent, and all costs and expenses, including, but
not limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action, suit or
proceeding.
5. Termination of Agreement and Resignation of Agent.
5.1 This Agreement shall terminate on the final disposition of the
monies and property held in escrow hereunder, provided that the rights of the
Agent and the obligations of the other parties hereto under Sections 4 and 7
shall survive the termination hereof.
5.2 The Agent may resign at any time and be discharged from its duties
as Agent hereunder by giving the Corporation, the subscribers and the Non-Public
Stockholders at least 30 days' notice thereof. As soon as practicable after its
resignation, the Agent shall turn over to a successor escrow agent appointed by
the Corporation all monies and property held hereunder (less such amount as the
Agent is entitled to retain pursuant to Section 7) upon presentation of the
document appointing the new escrow agent and its acceptance thereof. If no new
Agent is so appointed within the 60-day period following such notice of
resignation, the Agent may deposit the aforesaid monies and property with any
court it deems appropriate.
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6. Form of Payments by Agent.
6.1 Any payments by the Agent to subscribers, the Non-Public
Stockholders or to persons other than the Corporation pursuant to the terms of
this Agreement shall be made by check, payable to the order of each respective
subscriber or other person.
6.2 All amounts referred to herein are expressed in United States
Dollars and all payments by the Agent shall be made in such dollars.
7. Compensation of Agent. For services rendered, the Agent shall receive
$_________ as compensation. The Agent shall also be entitled to reimbursement
from the Corporation for all expenses paid or incurred by it in the
administration of its duties hereunder, including, but not limited to, all
counsel, advisors' and Agents' fees and disbursements and all reasonable taxes
or other governmental charges. It is anticipated that such disbursement shall
not exceed $________ barring any unforeseen circumstances.
8. Notices. All notices, requests, demands and other communications
provided for herein shall be in writing, shall be delivered by hand or by
first-class mail, shall be deemed given when received and shall be addressed to
the parties hereto at their respective addresses listed below or to such other
persons or addresses as the relevant party shall designate as to itself from
time to time in writing delivered in like manner.
if to the Corporation:
Crest View, Inc.
1700 W. Horizon Ridge Parkway
Henderson, NV 89102
Attention: Johnny R. Thomas, Chief Executive Officer
Tel. # (702) 614-1750
Fax # (702) 614-1790
with a copy to:
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Attention: Elliot Lutzker
Tel. # (212) 687-3860
Fax # (212) 949-7052
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if to the Agent:
Southwest Escrow Company
401 North Buffalo, Suite 205
Las Vegas, NV 89145
Attention: Mr. Dale Puhl
Tel. # (702) 838-0300
Fax # (702) ________
9. Further Assurances: From time to time on and after the date hereof, the
Corporation shall deliver or cause to be delivered to the Agent such further
documents and instruments and shall do and cause to be done such further acts as
the Agent shall reasonably request (it being understood that the Agent shall
have no obligation to make any such request) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure itself that it is protected in acting hereunder.
10. Consent to Service of Process. The Corporation hereby irrevocably
consents to the jurisdiction of the courts of the State of Nevada and of any
federal court located in such State in connection with any action, suit or other
proceeding arising out of or relating to this Agreement or any action taken or
omitted hereunder, and waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made by certified or
registered mail directed to the Corporation at its address for purposes of
notices hereunder.
11. Miscellaneous.
11.1 If for any reason the escrow deposit is not received by the Agent
as contemplated herein, the Corporation shall reimburse the Agent for all
expenses, including reasonable counsel fees and disbursements, paid or incurred
by it in making preparations for providing the services contemplated hereby.
11.2 This Agreement shall be construed without regard to any presumption
or other rule requiring construction against the party causing such instrument
to be drafted. The terms "hereby", "hereof", "hereto", "hereunder" and any
similar terms, as used in this Agreement, refer to the Agreement in its entirety
and not only to the particular portion of this Agreement where the term is used.
The word "person" shall mean any natural person, partnership, Corporation,
government and any other form of business or legal entity. All words or terms
used in this Agreement, regardless of the number or gender in which they are
used, shall be deemed to include any other number and any other gender as the
context may require. This Agreement shall not be admissible in evidence to
construe the provisions of any prior agreement. The rule of ejusdem generis
shall not be applicable herein to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
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11.3 This Agreement and the rights and obligations hereunder of the
Corporation may be assigned by the Corporation only to a successor to the
Corporation's entire business. This Agreement and the rights and obligations
hereunder of the Agent may be assigned by the Agent only to a successor to its
entire business. This Agreement shall be binding upon and inure to the benefit
of each party's respective successors, heirs and permitted assigns. No other
person shall acquire or have any rights under or by virtue of this Agreement.
This Agreement may not be changed orally or modified, amended or supplemented
without an express written agreement executed by the Agent and the Corporation.
This Agreement is intended to be for the sole benefit of the parties hereto, and
(subject to the provisions of this Section 11.3) their respective successors,
heirs and assigns, and none of the provisions of this Agreement are intended to
be, nor shall they be construed to be, for the benefit of any third person.
11.4 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Nevada. The representations and
warranties contained in this Agreement shall survive the execution and delivery
hereof and any investigations made by any party. The headings in this Agreement
are for purposes of reference only and shall not limit or otherwise affect any
of the terms hereof.
12. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signature of all of the parties reflected hereon as the signatures.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the day and year first above written.
SOUTHWEST ESCROW COMPANY
By: /s/ Dale E. Puhl
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Name: Dale E. Puhl
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Title: President
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CREST VIEW, INC.
By: /s/ Johnny R. Thomas
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Name: Johnny R. Thomas
Title: Chief Executive Officer
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