EXHIBIT 99.2
ESCROW AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of this 29th day
of May, by and between Quest Group International, Inc. (the "Company") and U.S.
Bank, N.A. ("Escrow Agent"), a national banking association.
RECITALS
A. The Company is conducting a public offering of its common stock (the
"Shares" or "Securities") at a price of $.50 per Share pursuant to a
registration statement on Form SB-2 that will be filed with the Securities and
Exchange Commission (the "Offering").
B. The Company wishes to assure those who subscribe for Shares (the
"Subscriber") that the Subscribers' monies will be released to the Company only
if and when not less than $50,000 (the "Threshold Amount") in subscriptions for
at least 100,000 Shares are accepted by the Company from the sale of Securities
and upon the direction of the Company.
C. The Company desires to provide for the safekeeping of the proceeds
of the Offering until such time as subscriptions for Securities totaling the
Threshold Amount (or such greater amount as the Company may direct in writing)
have been received and upon the direction of the Company, or until such time as
Escrow Agent is required to pay and return such proceeds to the Subscribers upon
the terms hereinafter provided.
AGREEMENT
1. Deposit and Disbursement.
a. Escrow Agent hereby agrees to receive and disburse the
proceeds from the offering of the Securities and any interest earned thereon in
accordance with the terms of this Agreement.
b. The Company or its authorized placement agents, on behalf
of the Subscribers, shall from time to time cause to be wired or deposited with
Escrow Agent all proceeds received from sales of Shares to be placed in an
escrow account at Escrow Agent designated as the Subscription Escrow Account
(the "Escrow Account") until the Threshold Amount (or such greater amount as the
Company may direct in writing) has been deposited in said account. All proceeds
are to be deposited in the Escrow Account within five (3) business days after
receipt by Escrow Agent.
c. As deposits are made in the Escrow Account, Company shall
cause to be delivered to Escrow Agent with each such deposit a list showing the
name, address, and tax identification number of each Subscriber together with a
copy of a fully completed subscription agreement for each Subscriber. Escrow
Agent shall keep a current list of the persons who have subscribed for the
Securities and deposited money, showing name, date, address and amount of each
subscription. All funds so deposited shall remain the property of the
Subscribers, subject to the provisions of Paragraph 5 hereof. Escrow Agent shall
promptly forward to the Company any subscription agreements which it may receive
directly from Subscribers.
d. If the Company rejects any subscriptions for which Escrow
Agent has already collected funds, Escrow Agent shall promptly issue a refund
check to the rejected Subscriber in the amount of the original deposit collected
from such Subscriber. If the Company rejects any subscription for which Escrow
Agent has not yet collected funds but has submitted the Subscriber's check for
collection, Escrow Agent shall promptly remit the Subscriber's check directly to
the Subscriber.
e. In the event that the Threshold Amount is not deposited
with Escrow Agent within 90 days from the effective date of the prospectus
relating to the Shares, unless such period is extended by the Company for up to
an additional 30 days, Escrow Agent shall promptly return the funds which have
been deposited in the Escrow Account to the Subscribers, in the amount and to
the addresses as shown on its records, with interest earned. The Company will
notify Escrow Agent of the effective date of such prospectus and provide Escrow
Agent with a copy of the same. If the Offering is terminated due to the failure
to fulfill Threshold Amount, Escrow Agent will inform the Company of the total
amount of interest earned on funds deposited with Escrow Agent, and the Company
will calculate the amount of interest earned by each Subscriber and inform
Escrow Agent how much of the total interest accrued to pay each Subscriber. For
purposes of reporting to tax authorities, Escrow Agent will report all interest
earned by the escrow as paid upon distribution.
f. Upon receipt of (i) the Threshold Amount (or such greater
amount as the Company may direct in writing) and (ii) written confirmation from
the Company that funds may be released from escrow, Escrow Agent shall release
the escrow funds, less accumulated interest income and any unpaid fees and
expenses, to the Company. Interest income shall be distributed to the Company.
At the Company's option, it may continue to deposit proceeds from the sale of
additional Securities (after receipt and/or distribution of the Threshold Amount
or any greater amount as directed in writing by the Company) and to direct the
disbursement from time to time of funds so deposited after subscriptions for the
Threshold Amount have been received.
2. Responsibilities and Obligations of Escrow Agent.
a. Escrow Agent assumes no responsibilities, obligations, or
liabilities except those expressly provided for in this Agreement as follows:
(1) Escrow Agent shall have no responsibility,
obligation or liability to any person with respect to any action taken, suffered
or omitted to be taken by it in good faith under this Agreement and shall in no
event be liable hereunder except for its gross negligence or willful misconduct.
(2) Notwithstanding anything herein to the contrary,
no reference in this Agreement to any other agreement shall be construed or
deemed to enlarge the responsibilities, obligations, or liabilities of Escrow
Agent set forth in this Agreement, and Escrow Agent is not charged with
knowledge of any other agreement.
b. Escrow Agent shall be protected in relying upon the truth
of any statement contained in any requisition, notice, request, certificate,
approval, consent or other proper paper, and in acting on any such document,
which on its face and without inquiry as to any other facts, appears to be
genuine and to be signed by the proper party or parties, and is entitled to
believe all signatures are genuine and that any person signing any such paper
who claims to be duly authorized is in fact so authorized.
c. Escrow Agent shall be entitled to act on any instruction
given to it in writing and signed by an authorized signatory of the Company and
shall be fully protected in doing so.
d. Escrow Agent shall be entitled to act in accordance with
any court order or other final determination by any governmental authority with
jurisdiction of any matter arising hereunder.
e. Escrow Agent shall have no responsibility for, and makes no
representation as to the value, validity or genuineness of any article, asset or
document deposited with Escrow Agent in the Escrow Account under this Agreement,
provided that it will give notice to the Company of any check for money not
credited and the reason stated therefore and of any discrepancy with respect to
the value, validity or genuineness of any article, asset or document so
deposited if and when it has actual knowledge thereof.
f. Escrow Agent shall have no responsibility to make payments
out of the Escrow Account for any amount in excess of the amount of collected
funds deposited in the Escrow Account, together with any interest earnings
thereon, at the time any payment is to be made.
g. If any controversy arises between the parties hereto or
with any third person relating to the Escrow Account, Escrow Agent shall not be
required to resolve the same or to take any action to do so but may at its
discretion, institute such interpleader or other proceedings as it deems proper.
Escrow Agent may rely on any joint written instructions as to the disposition of
funds, assets, documents or other assets held in escrow hereunder.
h. Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any of its rights hereunder either
directly or by or through its agents or attorneys. Nothing in this Agreement
shall be deemed to impose upon Escrow Agent any duty to qualify to do business
or to act as a fiduciary or otherwise in any jurisdiction. Escrow Agent shall
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not be responsible for and shall not be under a duty to examine or pass upon the
validity, binding effect, execution or sufficiency of the Agreement or of any
agreement amendatory of supplemental hereto or of any other agreement.
3. Investment of Escrow Funds.
The Escrow Agent shall invest funds in the triple "A" rated
First American Government Obligations Money Fund (Class A). The Company hereby
confirms receipt of the First American Funds prospectus. The Company further
acknowledges that the fund investment advisor, custodian, distributor and other
service providers as described in the prospectus are affiliates of U.S. Bank,
N.A., and investment in the fund includes approval of the fund's fees and
expenses as detailed in the prospectus, including advisory and custodial fees
and shareholder service expenses (which may be so called 12b-1 shareholder
service fees), which fees and expenses are paid to U.S. Bank, N.A., or
subsidiaries of U.S. Bancorp. The shares of the funds are not deposits or
obligations of, or guaranteed by, any bank including U.S. Bank, N.A., or any of
their affiliates, nor are they insured by the Federal Deposit Insurance
Commission, the Federal Reserve Board or any other agency. The investment in the
fund involves investment risk, including possible loss of principal. Interest
earned on the Escrow Account will be the property of the Company. All entities
entitled to receive interest from the escrow account will provide Escrow Agent
with a W-9 or W-8 IRS tax form prior to the disbursement of interest. A
statement of citizenship will be provided if requested by Escrow Agent. The
Escrow Agent shall not be liable for losses, penalties or charges incurred upon
any sale or purchase of any such investment.
4. Compensation of Escrow Agent.
Escrow Agent shall be paid for services hereunder and shall be
reimbursed for its out of pocket expenses for fees of counsel in setting up the
escrow, all in accordance with the fee schedule attached hereto as Exhibit B.
Payment of all fees shall be the responsibility of the Company. In the event
that Escrow Agent is made a party to litigation with respect to the property
held hereunder, or brings an action in interpleader or in the event that the
conditions of this escrow are not promptly fulfilled, or Escrow Agent is
required to render any service not provided for in this Agreement and fee
schedule, or there is any assignment of the interest of this escrow or any
modification hereof, Escrow Agent shall be entitled to reasonable compensation
for such extraordinary services and reimbursement for all fees, costs, liability
and expenses, including reasonable attorneys' fees. Escrow Agent may amend its
fee schedule from time to time on sixty (60) days prior written notice to the
Company.
5. Indemnification of Escrow Agent.
The Company hereby indemnifies and holds harmless Escrow Agent against
any and all claims, losses, and damages it may suffer in connection with its
carrying out the terms of this Agreement, including, without limitation, Escrow
Agent's unpaid fees and reimbursable expenses, but excluding any loss Escrow
Agent may sustain as a result of its gross negligence or willful misconduct.
Escrow Agent shall have a lien or right of setoff on all funds, monies or other
assets held hereunder to pay all of its fees and reimbursable expenses permitted
under this Agreement. The obligations of the Company under this Section 5 shall
survive termination for any reason of this Agreement or resignation or removal
of Escrow Agent.
6. Termination and Resignation.
a. This Agreement shall terminate when (i) Escrow Agent or its
successor or assign receives written notification of termination from the
Company including final disposition instructions signed by the Company, and (ii)
there occurs the actual final disposition of the monies held in escrow hereunder
as provided in this Agreement. The rights and obligations of Escrow Agent shall
survive the termination of this Agreement.
b. Escrow Agent may resign at any time and be discharged from
its duties as escrow agent hereunder by giving the Company not fewer than sixty
(60) days prior written notice thereof. As soon as practicable after its
resignation, Escrow Agent shall turn over to a successor escrow agent appointed
by the Company all monies held hereunder upon presentation of the document from
the Company appointing a successor escrow agent and its acceptance of
appointment. If no resignation , Escrow Agent may designate its successor by
written notice to the Company so long as any such successor is a bank or trust
company. Upon the designation of a successor escrow agent and the delivery to a
resigning escrow agent of the document appointing such successor escrow agent
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and its acceptance of appointment, the resigning escrow agent shall be released
from any and all liabilities arising thereafter except as provided in Sections
2(a)(1) and 5 of this Agreement. If no successor escrow agent is appointed by
the Company within the sixty (60) day period following such notice of
resignation, Escrow Agent reserves the right to forward the matter and all
monies and other property held by Escrow Agent pursuant to this Agreement to a
court of competent jurisdiction at the expense of the Company.
c. The Company may discharge Escrow Agent and appoint a
successor escrow agent hereunder at any time by giving Escrow Agent no fewer
than sixty (60) days prior written notice thereof. As soon as practicable after
its discharge, Escrow Agent shall turn over to the successor escrow agent
appointed by the Company all monies held hereunder upon presentation of the
document from the Company appointing such successor escrow agent and its
acceptance of appointment. Upon the designation of a successor escrow agent, the
delivery to a discharged escrow agent with its obligations pursuant to the
immediately preceding sentence, the discharged escrow agent shall be released
from any and all liabilities arising thereafter except as provided in Sections
2(a)(1) and 5 of this agreement.
7. Notices.
All notices provided for herein shall be in writing, shall be delivered
by hand or by registered or certified mail shall be deemed given when actually
received, and shall be addressed to the parties hereto at their respective
addresses, which may be changed by any party from time to time by written notice
to all other parties hereto as follows:
a. If to the Company:
Quest Group International, Inc.
Attn: Mr. Xxxxx Xxxxx
000 Xxxxx 000 Xxxx, #0
Xxxxxxx Xxxx, Xxxx 00000
Phone:(000) 000-0000
Fax: (000) 000-0000
b. If to the Escrow Agent: with a copy to:
U.S. Bank Corporate Trust Svcs. U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx 0000 0xx Xxx. 0xx Xxxxx
Xx. Xxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxxxx Xxxxx
(000) 000-0000 (000) 000-0000
(000) 000-0000 (fax) (000) 000-0000 (fax)
8. Disclosure.
The parties hereby agree not to use the name of U.S. Bank National
Association to imply an association with the Offering other than that of a legal
escrow agent.
9. Brokerage Confirmation.
The parties acknowledge that to the extent regulations of the
Comptroller of Currency or other applicable regulatory entity grant a right to
receive brokerage confirmations of security transactions of the escrow, the
parties waive receipt of such confirmations to the extent permitted by law.
Escrow Agent shall furnish a statement of security transactions on its regular
monthly reports to the Company.
10. Parties Bound.
This Agreement shall extend to and be binding upon the respective
successors, representatives, and assigns of the Company and Escrow Agent.
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11. Entire Agreement.
This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and cannot be modified, amended,
supplemented, or changed, nor can any provisions hereof be waived, except by
written instrument executed by the parties hereto.
12. Assignment.
Neither party may assign its rights or obligations under this Agreement
without the written consent of the other party hereto.
13. Applicable Law.
The Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Washington.
14. Severability.
If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by a court of competent jurisdiction to be illegal,
void, or unenforceable, such provision shall be of no force or effect, and shall
be limited or expanded in scope so as to carry out the intent of the parties as
expressed herein to the greatest extent possible. The illegality or
unenforceability of any such provision shall have no effect upon and shall not
impair the enforceability of any other provision of this Agreement.
15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY
By________________________________________
Xxxxx Xxxxx, President
U.S. BANK, N.A.
As Subscription Agent
_____________________________________
Name: _______________________________
Title: _____________________________
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EXHIBIT B
Schedule of Fees for Services as
SUBSCRIPTION AGENT
For
QUEST GROUP INTERNATIONAL, INC.
Administration Fees Billed One Time
Escrow Agent, One Time $1,000.00
One time fee for performance of the routine duties
of the agent in administration of the escrow
account. Administration fees are payable in
advance
Direct Out of Pocket Expenses
Reimbursement of expenses associated with the At Cost
performance of our duties, including but not
limited to publications, legal counsel after the
initial close, travel expenses and filing fees.
Extraordinary Services
Extraordinary services are duties or
responsibilities of an unusual nature, including
termination, but not provided for in the governing
documents or otherwise set forth in this schedule.
A reasonable charge will be assessed based on the
nature of the service and the responsibility
involved. At our option, these charges will be
billed at a flat fee or at our hourly rate then in
effect.
Account approval is subject to review and qualification. Fees are subject to
change at our discretion and upon written notice. Fees paid in advance will not
be prorated. The fees set forth above and any subsequent modifications thereof
are part of your agreement. Finalization of the transaction constitutes
agreement to the above fee schedule, including agreement to any subsequent
changes upon proper written notice. In the event your transaction is not
finalized, any related out-of-pocket expenses will be billed to you directly.
Absent your written instructions to sweep or otherwise invest, all sums in your
account will remain uninvested and no accrued interest or other compensation
will be credited to the account. Payment of fees constitutes acceptance of the
terms and conditions set forth.
Dated: May 29, 2002
