ESCROW AGREEMENT
This Escrow Agreement is made on the th day of October 1998 by and
between Worldwide Entertainment & Sports Corp., a Delaware corporation of 00
Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), and Liberty
Bank of New York, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (the "Bank").
WHEREAS, up to _____ shares of common stock of the Company (the
"Shares") are to be offered in a Public Offering (the "Offering") which is
expected to commence on November ___, 1998 (the "Offering Date") and to continue
until the expiration date which shall be forty five (45) days thereafter (the
"Expiration Date"), unless extended by the Company to a date forty five (45)
days thereafter (the "Extended Expiration Date"); and
WHEREAS, the Company has determined that the Offering will be withdrawn
unless subscriptions for shares generating an aggregate minimum of $4,500,000
have been received and accepted by the Company from subscribers (the
"Subscribers") prior to the Expiration Date, unless extended to the Extended
Expiration Date.
WHEREAS, the Company has determined and will agree with the Subscribers
that it will return to the Subscribers all amounts paid to the Company as
subscription payments for the Shares (the "Subscription Payments") in the event
that subscriptions for Shares aggregating at least $4,500,000 have not been
received and accepted by the Company by the Expiration Date, or the Extended
Expiration Date; and
WHEREAS, the Company has determined and will agree with Subscribers that
the Subscription Payments will be held in escrow until subscriptions for an
aggregate of at least $4,500,000 have been received and accepted by the Company,
or in the event that subscriptions for an aggregate minimum of $4,500,000 have
not been received prior to the Expiration Date or the Extended Expiration Date
such Subscription Payments will be returned to the Subscribers without interest;
and
WHEREAS, in the event that subscriptions for $4,500,000 of Shares are
received prior to the Expiration Date or Extended Expiration Date, subscriptions
for up to an additional $2,000,000 of Shares may be received until the
Expiration Date or Extended Expiration Date;
NOW, THEREFORE, the parties hereto agree as follows:
1. The Bank agrees to act as escrow agent in accordance with the terms
hereof, and as such, to establish an appropriate segregated account (the "Escrow
Account") entitled: Worldwide Entertainment & Sports Corp. Escrow Account and to
receive for deposit therein all of the Subscription Payments.
2. All funds received from Subscribers will be delivered by the Company
to the Bank, together with the name and address of each such Subscriber and the
amounts paid by him. Checks submitted as Subscription Payments will be made
payable to the Bank, as escrow agent, and broker/dealers will transmit such
checks directly to the Bank by the next business day after receipt
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by such broker/dealers. The Bank will, upon final collection of the proceeds of
such items, credit the proceeds to the Escrow Account to be held by it under the
terms of this Escrow Agreement. Funds held in escrow by the Bank will be
invested only in investments permissible under Rule 15c2-4 of the Exchange Act
of 1934, as amended. Any item returned unpaid to the Bank on its first
presentation for payment, unless returned for payment stopped, shall be
presented again for payment and if not then paid shall be returned to the
Company.
3. The Company shall deliver to the Bank a certificate setting forth the
date when the Offering shall expire; i.e., the Expiration Date and if the
Offering be extended a certificate setting forth the Extended Expiration Date.
4. If at any time on or before the Expiration Date or Extended
Expiration Date the Company has received and accepted subscriptions for at least
$4,500,000, the Company shall so notify the Bank in writing. Upon presentation
of a certificate signed by the Company stating that the Company has received and
accepted subscriptions for at least $4,500,000, the Bank shall release to the
Company all funds in the Escrow Account.
5. If subscriptions aggregating $4,500,000 have been received as recited
in paragraph 4 and thereafter subscriptions aggregating up to an additional
$2,000,000 have been received and accepted on or before the Expiration Date or
Extended Expiration Date, the Company shall so notify the Bank in writing. Upon
presentation of a certificate signed by the Company, stating that the
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Company has received and accepted subscriptions of up to an additional
$2,000,000, the Bank shall release to the Company all additional funds in the
Escrow Account.
6. If at the Expiration Date or Extended Expiration Date, the Company
shall not have received and accepted subscriptions for at least $4,500,000, the
Company shall so notify the Bank. The Bank shall as soon as possible thereafter
cause to be distributed to each Subscriber his Subscription Payment, at the
mailing address provided by the Company. Such distribution shall be in the form
of a bank cashier's check payable to each Subscriber.
7. The Bank undertakes to perform only such duties as are expressly set
forth herein.
8. The Bank may rely and shall be protected in acting upon any written
notice, instruction or request furnished to it hereunder and believed by it to
be genuine and believed by it to have been signed or presented by the proper
party or parties.
9. The Bank shall not be liable for any action taken by it in good faith
and believed by it to be authorized or within the rights or powers conferred
upon it by this Agreement, and may consult with counsel of its own choice and
shall have full and complete authorization and protection for any action taken
or suffered by it hereunder in good faith and in accordance with the opinion of
such counsel. The Bank is not bound by the terms of any other agreement between
the parties even if it has knowledge thereof.
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10. The Company hereby agrees to pay and will pay or reimburse the Bank
upon request for all expenses, disbursements and advances, including reasonable
attorney's fees, incurred or made by the Bank in connection with carrying out
its duties hereunder, not to exceed $2,500.
11. The Company hereby agrees to indemnify the Bank for, and to hold it
harmless against any loss, liability or expense incurred without gross
negligence or willful malfeasance on the part of the Bank, arising out of or in
connection with its entering into this Agreement and carrying out its duties
hereunder, including the costs of defending itself against any claim of
liability in the premises; provided, however, that the provisions of this
paragraph shall not apply in the event of any claim, liability, loss, action,
suit or proceeding resulting from the breach by the BANK of any provisions of
this Escrow Agreement or from its gross negligence or willful malfeasance.
12. Should the Bank inform the Company that any check or instrument
entered for collection by it hereunder is uncollectible after payment of the
funds represented by such check or instrument has been made pursuant to the
terms hereof, the Bank shall deliver the returned check or instrument to the
Company.
13. All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if sent by registered or certified mail, return
receipt requested, as follows:
ESCROW AGENT: Liberty Bank of New York
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx,
Senior Vice President
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COMPANY: Worldwide Entertainment & Sports Corp.
00 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx,
President
or at such other address as may be furnished to the other party in writing by
registered or certified mail, return receipt requested.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on
the day and year first above written.
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
By:___________________________________
Xxxx Xxxxxxx, President
By:___________________________________
Xxx Xxxxxxx, Chief Financial Officer
LIBERTY BANK OF NEW YORK
By:___________________________________
Xxxxxx X. Xxxxx, Senior Vice President
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