ESCROW AGREEMENT
THIS AGREEMENT made this 31st day of October, 1996, by and among
Century Technologies, Inc., a Colorado corporation located at 000 Xxxxx
Xxxxxxxxx Xxxxxxxxx, Xxxxx X, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter
"Century"), and Affinity Entertainment, Inc., a Delaware corporation located at
00000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000 (hereinafter
"Affinity"), and Wilson, Elser, Xxxxxxxxx, Edelman & Dicker, located at 0000
Xxxxxxxxxxxxx Xxxxx, 000 X.X. Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000 (hereinafter
"Escrow Agent").
R E C I T A L S:
WHEREAS, at the time of the execution of this agreement, Affinity is
indebted to Century in the sum of Two Million Four Hundred Thousand Dollars and
00/100 (US $2,400,000), as evidenced by the promissory note of Affinity, dated
October 31, 1996, for such amount (the "Promissory Note");
WHEREAS, to induce Century to issue Thirty Million (30,000,000) shares
of Century's common stock to Affinity, Affinity executed a Stock Acquisition
Agreement, dated October 31, 1996 (the "Stock Acquisition Agreement"), in which
it agreed, inter alia, to deliver to Century the Promissory Note and to place
Two (2) shares of restricted Convertible Preferred Stock of Affinity (the
"Convertible Preferred Shares"), or permissible substituted collateral as set
forth in the Stock Acquisition Agreement, in escrow with the Escrow Agent on the
terms hereof as security for the timely honor of the Promissory Note;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereby agree as follows:
1. Affinity shall forthwith deliver or cause to be delivered to the
Escrow Agent the Convertible Preferred Shares, represented by certificates Nos.
________________ and ____________________, issued to Wilson, Elser, Xxxxxxxxx,
Xxxxxxx & Xxxxxx, as Escrow Agent, or permissible substituted collateral as set
forth in the Stock Acquisition Agreement, which shall be held by the Escrow
Agent in escrow subject to the terms and conditions of this Agreement.
2. The Escrow Agent shall hold the Convertible Preferred Shares, or
permissible substituted collateral, in escrow and undelivered, and shall
forthwith deliver the Convertible Preferred Shares, or permissible substituted
collateral, to, or to the order of, Affinity upon receipt from Century of
written instructions to deliver the Convertible Preferred Shares, or permissible
substituted collateral, to or to the order of Affinity, which instructions
Century shall give to the Escrow Agent (and Affinity) forthwith upon receipt by
Century of the full principal and interest amount due under the Promissory Note.
3. The Escrow Agent shall deliver the Convertible Preferred Shares, or
permissible substituted collateral, held in trust by it to, or to the order of,
Century at the time of receipt from Century of written instructions to deliver
the same to Century. Century may give such notice to the Escrow Agent in the
event the full principal amount due under the Promissory Note is not paid when
due. In the event that Century gives written instructions to the Escrow Agent to
deliver the Convertible Preferred Shares, or permissible substituted collateral,
held in trust to Century, Century shall deliver a copy of such written
instructions to Affinity at the same time and in the same manner as they are
delivered to the Escrow Agent. If the full principal amount due under the
Promissory Note is not paid when due, Century, or its assignee, shall be
entitled to sell the Convertible Preferred Shares (provided that such shares are
registered or there is an available exemption from registration), or permissible
substituted collateral, posted pursuant to this agreement (or that portion
thereof) to fully satisfy Affinity's payment obligation under the Promissory
Note as well as any costs associated with the liquidation of such Convertible
Preferred Shares, or permissible substituted collateral, and any unpaid accrued
interest. Any remaining balance of the Convertible Preferred Shares, or
permissible substituted collateral, or any remaining proceeds of the sale of the
Convertible Preferred Shares, or permissible substituted collateral, after full
payment under the Promissory Note is made, shall be returned to Affinity. In the
event Affinity, at any time, makes a partial prepayment of the Promissory Note,
the Escrow Agent shall return to Affinity that portion of the Convertible
Preferred Shares, or permissible substituted collateral, held by the Escrow
Agent, equivalent to the percentage the principal balance of the Promissory Note
is reduced by such prepayment. Once the full principal and interest amount due
the holder of the Promissory Note is paid in full, including the payment of any
costs associated with the liquidation of the Convertible Preferred Shares, or
permissible substituted collateral, the Promissory Note shall be deemed to be
satisfied and thereafter null and void.
4. In the event that, during the term of this agreement, any share
dividend, reclassification, readjustment, or other change is declared or made in
the capital structure of Affinity, all new, substituted and additional shares,
or other securities, issued by reason of any such change shall be held by the
Escrow Agent under the terms of this agreement in the same manner as the shares
originally placed in escrow hereunder.
5. All notices shall be in writing to have been given on the dates
indicated below and at the address or telefax numbers set out below as may be
amended by the addressees by notice from time to time:
(a) Overnight Courier: Business day following deposit of such notice
with such courier;
(b) Telefax: Business day of transmission if sent before 2:00 p.m.,
recipient's time, with receipt to confirm;
(c) Personal Delivery: Business day of delivery; and
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(d) Addressed as follows:
To: Century Technologies, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx X
Xxxxxxx Xxxxx, Xxxxxxxxxx
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With courtesy copies to:
Xxxxx X. Xxxxxx, Esq.
Wilson, Elser, Xxxxxxxxx,
Edelman & Dicker
0000 Xxxxxxxxxxxxx Xxxxx
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To: Affinity Entertainment, Inc.
00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With courtesy copies to:
Xxxx Xxxxxxxxxx, Esq.
The Xxxxxxxxxx Law Firm
0000 Xxx Xxxxxx Xxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6. Affinity shall pay from time to time the reasonable fees and
expenses, if any, of the Escrow Agent in connection with the performance of its
duties hereunder. Affinity and Century shall, jointly and severally, indemnify
and hold harmless the Escrow Agent of and from all other claims, suits, actions,
demands, damages, costs, liabilities, expenses and loss arising out of its
performance of its duties hereunder.
7. The Escrow Agent shall have no responsibility in respect to the loss
of the Convertible Preferred Shares, or permissible substituted collateral,
except the duty to
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exercise reasonable care in the safekeeping thereof. The Escrow Agent may act
herein on the advice of counsel but shall not be responsible for acting or
failing to act on the advice of counsel.
8. Century and Affinity agree that the Escrow Agent may at any time
upon written notice of one week sent to Century and Affinity, resign as escrow
agent in favor of any person, firm or corporation named and agreed to by Century
and Affinity or, failing agreement of Century and Affinity, in favor of any
corporate trustee the Escrow Agent may name in the notice that is licensed to do
business in the State of Florida.
9. This Agreement shall inure to the benefit of and be binding upon
Affinity and Century and the Escrow Agent and their respective heirs, executors,
administrators, successors and assigns.
10. This agreement shall be executed in triplicate and may be executed
by fax or facsimile transmission and in one or more counterparts, each
counterpart of which together will constitute one and the same instrument. If
this agreement is executed in counterparts, each party shall deliver one
original of this agreement signed by such party to each of the other parties
hereto within three (3) business days of the execution of the agreement. If this
agreement is not executed in counterparts, the last person executing this
agreement shall deliver one original of the fully executed agreement to each of
the other parties hereto within three (3) business days of the execution of the
agreement.
11. No failure on the part of any party hereto to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by either party hereto preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
12. If any provision of this agreement or the application thereof to
any party hereto or circumstances shall be invalid or unenforceable the
remainder of this agreement and the application of such provisions to any other
party thereto or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
13. No provision of this agreement shall be construed against or
interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
14. The parties agree that any legal action or proceeding with respect
to this agreement must be brought in an appropriate federal or state court
located in the State of Florida. By executing this agreement, the parties hereby
submit to each such jurisdiction, hereby expressly waiving whatever rights may
correspond to each party by reason of such parties' present or future domicile.
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15. This agreement shall be governed by and construed in accordance
with the internal laws of the State of Florida (without regard to conflict of
laws principles).
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
the day and year first above written.
Wilson,Elser, Xxxxxxxxx,
Edelman & Dicker
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Title: Partner
____________________________
Century Technologies, Inc.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Title: President and CEO
____________________________
Affinity Entertainment, Inc.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Title: President
____________________________
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