Exhibit 2.3
FUNDS ESCROW AGREEMENT
(Common Stock)
This Agreement is dated as of the 12th day of May, 1999 among Fantasy
Sportsnet, Inc. (the "Company"), the parties identified on Schedule A hereto,
("Subscriber" or "Subscribers"), and Grushko & Xxxxxxx (the "Escrow Agent"):
W I T N E S S E T H:
WHEREAS, the Company and Subscriber have entered into Subscription
Agreements ("Subscription Agreement") calling for the sale by the Company of the
Company's Common Stock ("Company Shares") to the Subscribers for the aggregate
purchase price of $750,000 in the denominations set forth on Schedule A hereto
against payment of the aggregate purchase price; and
WHEREAS, the parties hereto require the Company to deliver the Company
Shares and other documents against payment therefor, with the foregoing
documents and payment to be delivered to the Escrow Agent to be held in escrow
and released by the Escrow Agent in accordance with the terms and conditions of
this Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;
NOW THEREFORE, the parties agree as follows:
ARTICLE I
INTERPRETATION
1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Agreement" means this Agreement and all amendments made hereto by
written agreement among the parties;
(b) "Company Shares" means Common Stock of the Company to be issued to the
Subscribers in the amounts designated on Schedule A hereto.
(c) "Escrowed Payment" means the sum of up to $750,000 to be held in escrow
by the Escrow Agent on behalf of the Company and Subscribers.
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(d) "Subscription Agreement" means the Subscription Agreement with the
exhibits and schedules thereto entered or to be entered into by the Company and
Subscribers in reference to the Company Shares and Warrants.
(e) Collectively, the Company Shares, and Subscription Agreements signed on
behalf of the Company are referred to as "Company Documents."
(f) Collectively, the Escrowed Payment and Subscription Agreements signed
on behalf of the Subscribers are referred to as "Subscriber Documents."
1.2. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the Company Documents and Subscriber
Documents and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement.
1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly stated
herein, no delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege hereunder.
1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
1.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
principles of conflict of laws.
1.7. Jurisdiction and Consents to Service of Process. The Company and the
Subscriber each hereby irrevocably consent to the exclusive jurisdiction of the
courts of the State of New York and
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of any Federal Court located in the State of New York, each as may have
competent jurisdiction, in connection with any action, suit or other proceeding
arising out of or relating to this Agreement or any action taken or omitted
hereunder, waive trial by jury, and waive personal service of any summons,
complaint or other process and agree that the service thereof may be made by
certified or registered mail directed to such person at such person's address
for purpose of notice hereunder.
1.8. Fees. The Company shall pay the Escrow Agent the fee described in
Section 6 of the Subscription Agreement. This fee shall be paid by proportionate
deduction from the Escrowed Payment deliverable to the Company, but only if a
portion of the Escrowed Payment is to be released to the Company pursuant to
this Agreement.
ARTICLE II
DELIVERIES TO THE ESCROW AGENT
2.1. Delivery of Company Documents to Escrow Agent. On or about the date
hereof, the Company shall deliver to the Escrow Agent the Company Documents.
2.2 Delivery of Subscriber Documents to Escrow Agent. On or about the date
hereof, the Subscriber shall deliver to the Escrow Agent the Subscriber
Documents and the Escrowed Payment pursuant to the following wire transfer
instructions:
Citibank, N.A.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000, XXX
ABA Number: 0210-00089
For Credit to: Grushko & Xxxxxxx
XXXX Trust Account
Account Number: 037-00000000
2.3. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.
2.4. Escrow Agent to Deliver Company Documents and Subscriber Documents.
The Escrow Agent shall hold and release the Company Documents and Subscriber
Documents only in accordance with the terms and conditions of this Agreement.
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ARTICLE III
RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS
3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:
(a) Upon receipt by the Escrow Agent of the Company Documents and the
corresponding Subscriber Documents, the Escrow Agent will release the Company
Documents to the Subscribers and the corresponding Subscriber Documents will be
released to the Company. The Company will provide written facsimile or original
instructions to the Escrow Agent as to the disposition of all funds releasable
to the Company.
(b) In the event the Escrow Agent does not receive Company Documents and
the corresponding Subscriber Documents prior to June 1, 1999, then the Escrow
Agent will return the Company Documents to the Company, and return the
Subscriber Documents to the Subscribers.
(c) Upon receipt by the Escrow Agent of joint written instructions ("Joint
Instructions") signed by the Company and the Subscriber, it shall deliver the
Company Documents and Subscriber Documents in accordance with the terms of the
Joint Instructions.
(d) Upon receipt by the Escrow Agent of a final and non-appealable
judgment, order, decree or award of a court of competent jurisdiction (a "Court
Order"), the Escrow Agent shall deliver the Company Documents and Subscriber
Documents in accordance with the Court Order. Any Court Order shall be
accompanied by an opinion of counsel for the party presenting the Court Order to
the Escrow Agent (which opinion must be reasonably satisfactory to the Escrow
Agent) to the effect that the court issuing the Court Order has competent
jurisdiction and that the Court Order is final and non-appealable.
3.2. Acknowledgement of Company and Subscriber; Disputes. The Company and
the Subscriber acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscriber reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber Documents. Any
dispute with respect to the release of the Company Documents and Subscriber
Documents shall be resolved pursuant to Section 4.2 or by agreement between the
Company and Subscriber.
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ARTICLE IV
CONCERNING THE ESCROW AGENT
4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent's
duties and responsibilities shall be subject to the following terms and
conditions:
(a) The Subscriber and Company acknowledge and agree that the Escrow Agent
(i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscriber or Company is entitled to receipt of
the Company Documents and Subscriber Documents pursuant to, any other agreement
or otherwise; (ii) shall be obligated only for the performance of such duties as
are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
may rely on and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by the Escrow Agent in good faith to be
genuine and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of any fact
stated therein or the propriety or validity or the service thereof; (iv) may
assume that any person purporting to give notice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so; (v) shall not be under any duty to give the property held
by Escrow Agent hereunder any greater degree of care than Escrow Agent gives its
own similar property; and (vi) may consult counsel satisfactory to Escrow Agent,
the opinion of such counsel to be full and complete authorization and protection
in respect of any action taken, suffered or omitted by Escrow Agent hereunder in
good faith and in accordance with the opinion of such counsel.
(b) The Subscriber and Company acknowledge that the Escrow Agent is acting
solely as a stakeholder at their request and that the Escrow Agent shall not be
liable for any action taken by Escrow Agent in good faith and believed by Escrow
Agent to be authorized or within the rights or powers conferred upon Escrow
Agent by this Agreement. The Subscriber and Company, jointly and severally,
agree to indemnify and hold harmless the Escrow Agent and any of Escrow Agent's
partners, employees, agents and representatives for any action taken or omitted
to be taken by Escrow Agent or any of them hereunder, including the fees of
outside counsel and other costs and expenses of defending itself against any
claim or liability under this Agreement, except in the case of gross negligence
or willful misconduct on Escrow Agent's part committed in its capacity as Escrow
Agent under this Agreement. The Escrow Agent shall owe a duty only to the
Subscriber and Company under this Agreement and to no other person.
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(c) In the event the Company does not receive its portion of the Escrowed
Payment, then the Subscriber and Company jointly and severally agree to
reimburse the Escrow Agent for its reasonable out-of-pocket expenses (including
counsel fees) incurred in connection with the performance of its duties and
responsibilities hereunder.
(d) The Escrow Agent may at any time resign as Escrow Agent hereunder by
giving five (5) days prior written notice of resignation to the Subscriber and
the Company. Prior to the effective date of the resignation as specified in such
notice, the Subscriber and Company will issue to the Escrow Agent a Joint
Instruction authorizing delivery of the Company Documents and Subscriber
Documents to a substitute Escrow Agent selected by the Subscriber and Company.
If no successor Escrow Agent is named by the Subscriber and Company, the Escrow
Agent may apply to a court of competent jurisdiction in the State of New York
for appointment of a successor Escrow Agent, and to deposit the Company Shares
and Escrowed Payment with the clerk of any such court.
(e) The Escrow Agent does not have and will not have any interest in the
Company Documents and Subscriber Documents, but is serving only as escrow
Subscriber, having only possession thereof. The Escrow Agent shall not be liable
for any loss resulting from the making or retention of any investment in
accordance with this Escrow Agreement.
(f) This Agreement sets forth exclusively the duties of the Escrow Agent
with respect to any and all matters pertinent thereto and no implied duties or
obligations shall be read into this Agreement.
(g) The Escrow Agent shall be permitted to act as counsel for the
Subscriber or Company, as the case may be, in any dispute as to the disposition
of the Company Documents and Subscriber Documents, in any other dispute between
the Subscriber and Company, whether or not the Escrow Agent is then holding the
Company Documents and Subscriber Documents and continues to act as the Escrow
Agent hereunder.
(h) The provisions of this Section 4.1 shall survive the resignation of the
Escrow Agent or the termination of this Agreement.
4.2. Dispute Resolution: Judgments. Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:
(a) If any dispute shall arise with respect to the delivery, ownership,
right of possession or disposition of the Company Documents and Subscriber
Documents, or if the Escrow Agent shall in good faith be uncertain as to its
duties or rights
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hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the Company
Documents and Subscriber Documents pending receipt of a Joint Instruction from
the Subscriber and Company, or (ii) deposit the Company Documents and Subscriber
Documents with any court of competent jurisdiction in the State of New York, in
which event the Escrow Agent shall give written notice thereof to the Subscriber
and the Company and shall thereupon be relieved and discharged from all further
obligations pursuant to this Agreement. The Escrow Agent may, but shall be under
no duty to, institute or defend any legal proceedings which relate to the
Company Documents and Subscriber Documents. The Escrow Agent shall have the
right to retain counsel if it becomes involved in any disagreement, dispute or
litigation on account of this Agreement or otherwise determines that it is
necessary to consult counsel.
(b) The Escrow Agent is hereby expressly authorized to comply with and obey
any Court Order. In case the Escrow Agent obeys or complies with a Court Order,
the Escrow Agent shall not be liable to the Subscriber and Company or to any
other person, firm, corporation or entity by reason of such compliance.
ARTICLE V
GENERAL MATTERS
5.1. Termination. This escrow shall terminate upon the release of all of
the Company Documents and Subscriber Documents or at any time upon the agreement
in writing of the Subscriber and Company.
5.2. Notices. All notices, request, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been received one (1) day after being sent by telecopy (with copy delivered by
regular mail):
(a) If to the Company, to:
Fantasy Sportsnet, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0-x
Xxxxxx Xxxxxxx, Xxx Xxxx 00000
(000) 000-0000 (Telecopier)
(b) If to the Subscriber, to: the addresses and telecopier numbers listed on
Schedule A hereto.
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(c) If to the Escrow Agent, to:
Grushko & Xxxxxxx
Attorneys at Law
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telecopier)
or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.
5.3 Interest. Interest will not be payable to the Subscriber or Company in
connection with the Escrowed Payment.
5.4. Assignment; Binding Agreement. Neither this Agreement nor any right or
obligation hereunder shall be assignable by any party without the prior written
consent of the other parties hereto. This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.
5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
5.6. Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile transmission.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.
FANTASY SPORTSNET, INC.
"Company"
By:
---------------------------------
ARCADIA MUTUAL FUND, INC.
"Subscriber"
By:
---------------------------------
BERKELEY GROUP, LTD.
"Subscriber"
By:
---------------------------------
WINDSOR GROUP, LTD.
"Subscriber"
By:
---------------------------------
ESCROW AGENT:
By:
---------------------------------
GRUSHKO & XXXXXXX
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5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.
FANTASY SPORTSNET, INC.
"Company"
By:
---------------------------------
AUSTOST ANSTALT XXXXXX
"Subscriber"
By:
---------------------------------
BALMORE FUNDS, S.A.
"Subscriber"
By:
---------------------------------
NESHER, INC.
"Subscriber"
By:
---------------------------------
TALBIYA B. INVESTMENTS LTD.
"Subscriber"
By:
---------------------------------
XXXXX ENTERPRISES, LTD.
"Subscriber"
By:
---------------------------------
ESCROW AGENT:
By:
---------------------------------
GRUSHKO & XXXXXXX
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SCHEDULE A TO FUNDS ESCROW AGREEMENT
================================================================================
SUBSCRIBERS COMPANY SHARES ESCROWED PAYMENT
--------------------------------------------------------------------------------
ARCADIA MUTUAL FUND, INC 666,664 $ 166,666.00
00 Xxxxxxxxx Xxxxxx
Xxx XX-00000
Xxxxxx, Xxxxxxx
Fax: 000-000-0000
--------------------------------------------------------------------------------
BERKELEY GROUP, LTD 666,668 $ 166,667.00
X.X. Xxx X-0000
Xxxxx X000
Xxxxxx, Xxxxxxx
Fax: 000-000-0000
--------------------------------------------------------------------------------
WINDSOR GROUP, LTD 666,668 $ 166,667.00
0000 Xxx Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxx
X0X 0X0, Xxxxxx
Fax: 000-000-0000
--------------------------------------------------------------------------------
AUSTOST ANSTALT XXXXXX 300,000 $ 75,000.00
7440 Fuerstentum
Xxxxxxxxxxx Xxxxxxxxxxx 000
Fax: 000-000-000000000
--------------------------------------------------------------------------------
BALMORE FUNDS S.A 300,000 $ 75,000.00
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx
Fax: 000-000-000-0000
--------------------------------------------------------------------------------
NESHER, INC 200,000 $ 50,000.00
x/x Xxxxxxx Xxxxx
00 Xxxx Xxxx
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 000-000-00000000
--------------------------------------------------------------------------------
TALBIYA B. INVESTMENTS LTD 100,000 $ 25,000.00
c/o Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
--------------------------------------------------------------------------------
XXXXX ENTERPRISES, LTD 100,000 $ 25,000.00
00X Xxxxxxxx Xxxx
Xxxxxx, XX0 0XX, Xxxxxxx
Fax: 000-000-000000000
--------------------------------------------------------------------------------
TOTALS 3,000,000 $ 750,000.00
================================================================================
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