ESCROW AGREEMENT
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This Escrow Agreement (the "Agreement") is made and entered into by and
among T. Xxxx Xxxx & Associates, P.C. ("TAO"), Attorneys at Law, Arlington,
Texas, and Wholesale On The Net, Inc. ("WOTN"), a Nevada corporation, on behalf
of all subscribers (the "Investors") to the initial public offering (the
"Offering") of common stock by WOTN, pursuant to a Registration Statement filed
under the Securities Act of 1933 on Form SB-1.
I
RECITALS
1.1 Purchase of Shares. The Investors, at a price of $0.25 per share,
desire to individually purchase from WOTN, an aggregate of between 200,000
shares and 4,000,000 shares (the "Shares") of the common stock of WOTN pursuant
to the terms of the Offering. However, there is no certainty that any Shares may
be purchased under the Offering.
1.2 Purpose Hereof. In order to facilitate the purchase of the Shares,
WOTN shall deposit all funds received by it from the sale of the Shares to
Investors (the "Escrow Funds") with TAO, and TAO shall hold the Escrow Funds and
not release them to WOTN until such time as is described below.
II
ESCROW PROVISIONS
2.1 Appointment of TAO. TAO is hereby appointed as Escrow Agent to
receive, hold, and distribute all funds deposited by the Investors for Shares,
all as hereinafter provided.
2.2 Deposit and Receipt of Funds. TAO shall deposit all funds for
purchase of the Shares in its Attorney Trust Account (the "Escrow Account").
Concurrently with the delivery of the deposits by each Investor, TAO shall give
each Investor and WOTN a receipt for the funds received by TAO.
2.3 Disbursement of Escrow Funds. Following deposit into the Escrow
Account of funds totaling $50,000.00, TAO shall disburse all such funds to WOTN
and shall notify all Investors that placed Escrow Funds with TAO that such
disbursement has taken place.
2.4 TAO's Responsibility. TAO's sole responsibility under this
Agreement shall be for the recording of deposits by the Investors, the
safekeeping of the Escrow Funds, and the disbursement thereof in accordance with
Paragraph 2.3, and TAO shall not be required to take any other action with
reference to any matters which might arise in connection with the Escrow Funds
or this Agreement. TAO shall not be liable to WOTN or any Investor for anything
which TAO may do or refrain from doing in connection herewith, so long as TAO is
acting in good faith in an attempt to perform its duties under this Agreement or
unless Xxxx is guilty of gross negligence or willful misconduct. TAO is not a
party to, nor is it bound by, nor shall it give consideration to the terms or
provisions of, even though he may have knowledge of, (i) any agreement or
undertaking of any agreement with any other party or parties, except for this
Agreement, (ii) any agreement or undertaking which may be evidenced or disclosed
by this Agreement, and (iii) any other agreements regarding the Escrow Funds
that may now or in the future be deposited with TAO in connection with this
Agreement. TAO has no duty to determine or inquire into any happening or
occurrence or any performance or failure of performance of the Investors or WOTN
or any other parties with respect to agreements or arrangements with each other
or with any other party or parties.
2.5 Indemnity to TAO. WOTN agrees to indemnify and hold TAO harmless
against and from any and all costs, expenses, claims, losses, liabilities, and
damages (including reasonable attorneys' fees) that may arise out of or in
connection with TAO's acting as Escrow Agent under the terms of this Agreement,
except in those instances where TAO has been guilty of gross negligence or
willful misconduct.
2.6 Return of Escrow Funds. If $50,000.00 is not deposited in the
Escrow Account by the Investors on or before 180 days after the effective date
of the offering, TAO shall promptly return to each Investor from the Escrow
Funds, an amount equal to the amount deposited by such Investor.
2.7 Effective Date and Termination. This Escrow Agreement shall become
effective on the date the first deposit is made by an Investor into Escrow. All
of the provisions of this Agreement shall terminate 180 days after the effective
date of the offering by refunding all funds in escrow to the Investors, or by
the disbursement of all Escrow Funds as herein set out. If not so terminated,
TAO at any time after such date may disburse the allocable portion of the Escrow
Funds to each respective Investor, close his records, and withdraw all of TAO's
liability and obligations in connection with the Escrow Funds and this Agreement
shall terminate.
III
MISCELLANEOUS
3.1 Multiple Counterparts. It is intended that this Agreement shall be
executed in multiple counterparts, each of which, when so executed, shall be
considered an original, but all of which shall together constitute one and the
same instrument.
3.2 Entire Agreement. This instrument evidences the entire agreement
between TAO and WOTN with respect to the purchase of the Shares by Investors
3.3 Controlling Law. The terms of this Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
3.4 Notices. Any notice, request, instruction, or other instrument to
be given or served hereunder upon any party shall be deemed given or served if
in writing and delivered personally or sent by United States Mail, postage
prepaid, certified, return receipt requested, to the respective party or parties
at the following addresses:
a) If to TAO: T. Xxxx Xxxx & Associates, P.C.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attn: T. Xxxx Xxxx
b) If to WOTN: Wholesale On The Net, Inc.
0000 X. X-00
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
EXECUTED to be effective as of the 2nd day of May, 2000.
T. XXXX XXXX & ASSOCIATES, P.C.
By: /s/ T. Xxxx Xxxx
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T. Xxxx Xxxx
WHOLESALE ON THE NET, INC.,
a Nevada corporation
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, President
