Joint Escrow Instructions

EXHIBIT 10.3


JOINT ESCROW INSTRUCTIONS


Dated as of the date of the Securities Purchase Agreement to Which These Joint Escrow Instructions Are Attached


Krieger & Prager, Esqs. 319 Fifth Avenue New York, New York 10016


Attention: Samuel M. Krieger, Esq.


Dear Mr. Krieger:


As escrow agent for both Kideo Productions, Inc., a Delaware corporation (the "Company"), and the Purchaser (the "Purchaser") of Series A 6% Convertible Participating Preferred Stock of the Company (the "Series A Preferred Stock"), who is named in the Securities Purchase Agreement between the Company and the Purchaser to which a copy of these Joint Escrow Instructions is attached as Annex II (the "Agreement"), you (hereafter, the "Escrow Agent") are hereby authorized and directed to hold the documents and funds (together with any interest thereon, the "Escrow Funds") delivered to the Escrow Agent pursuant to the terms of the Agreement in accordance with the following instructions:


1. The Escrow Agent shall, as promptly as feasible, notify the Company of receipt of the purchase price from the Purchaser, and notify the Purchaser (or such agent as the Purchaser may designate in writing) of receipt of the Series A Preferred Stock being purchased for such purchase price. Within not more than two (2) days of receipt of written notice from the Company and the Purchaser that the respective conditions precedent to the purchase and sale have been satisfied (which notice shall not be unreasonably withheld), the Escrow Agent shall, after reduction by the amounts referred to in the next succeeding sentence of this paragraph, release the Escrow Funds to or upon the order of the Company, and shall release the Series A Preferred Stock to the Purchaser. After receipt of such notice, a portion of the Escrow Funds shall be released by the Escrow Agent as follows: an amount equal to 5% of the purchase price of the Series A Preferred Stock shall be released to Gerard Klauer Mattison & Co, Inc., and $7,500 for tranche I and $3,000 for each additional tranche of the Escrow Funds to the Escrow Agent. If a certificate representing such Series A Preferred Stock is not deposited with the Escrow Agent within ten (10) days after receipt by the Company of notice of receipt by the Escrow Agent of the funds from the Purchaser, Escrow Agent shall notify the Purchaser and Purchaser shall be entitled to cancel the


subscription and demand repayment of the funds. If such funds are not deposited with the Escrow Agent within ten (10) days after receipt by the Purchaser of notice of receipt by the Escrow Agent of such stock certificate from the Company, Escrow Agent shall notify the Company and the Company shall be entitled to cancel the subscription and demand return of such stock certificate. If the Company or the Purchaser notifies the Escrow Agent that on the Closing Date (as defined in the Agreement) the conditions precedent to the obligations of the Company or the Purchaser, as the case may be, under the Agreement were not satisfied or waived, then the Escrow Agent shall return the Escrow Funds to the Purchaser and shall return the such stock certificate to the Company. Prior to return of the Escrow Funds to the Purchaser, the Purchaser shall furnish such tax reporting or other information as shall be appropriate for the Escrow Agent to comply with applicable United States laws. The Escrow Agent shall deposit all funds received hereunder in the ...