EXHIBIT 10.4
ESCROW AGREEMENT
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THIS AGREEMENT is made as of February 14, 2003, by and between FTS APPAREL,
INC. (the "COMPANY"), DUTCHESS PRIVATE EQUITIES FUND, LP (the "INVESTOR") and
XXXXXX X. XXXXXXX, ESQ., with an office at 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxx, XX 00000 (the "ESCROW AGENT").
W I T N E S S E T H:
WHEREAS, INVESTOR will be purchasing $200,000 of the Company's debentures
convertible into Common Stock (the "Debentures"), from COMPANY as set forth in
the Subscription Agreement entered into by the COMPANY and INVESTOR; and
WHEREAS, COMPANY and INVESTOR have requested that the Escrow Agent hold the
$200,000 in escrow pursuant to the terms of this Escrow Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
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TERMS OF THE ESCROW
1.1 The parties hereby agree to have Xxxxxx X. XxXxxxx, Esq. act as Escrow
Agent whereby the Escrow Agent shall hold the $200,000 in escrow until the
Escrow Agent has received the Debentures from the COMPANY and faxed copies of
executed signature pages from the Company and Investor, whereupon Escrow Agent
shall release funds to the Company in the amount of $200,000, less a $5,000 fee
to Escrow Agent, and a $10,000 to Xxxx X. Xxxxxxx, P.C. and $70,000 to Simply
Cellular, Inc., all of which amounts shall be wired out of escrow by the Escrow
Agent upon closing. In the event the Escrow Agent does not receive the
Debentures at his office on or before February 18, 2003, he shall notify the
INVESTOR, who may cancel and terminate this Agreement by sending written notice
to the Escrow Agent, in which case Escrow Agent shall wire back the $200,000 to
INVESTOR, without interest.
1.2 Upon Escrow Agent's receipt of funds from INVESTOR into the attorney
escrow account the Escrow Agent shall notify COMPANY of the amount received.
1.3 COMPANY, prior to or upon receipt of said notice from the Escrow
Agent, shall deliver to Escrow Agent the Debentures being purchased.
1.4 This Agreement may be altered or amended only with the written consent
of all of the parties hereto. Should COMPANY attempt to change this Agreement
in a manner which, in the Escrow Agent's discretion, shall be undesirable, the
Escrow Agent may resign as Escrow Agent by notifying COMPANY and INVESTOR in
writing. In the case of the Escrow Agent's resignation or removal pursuant to
the foregoing, his only duty, until receipt of notice from COMPANY and INVESTOR
that a successor escrow agent has been appointed, shall be to hold and preserve
the Shares and funds that are in his possession. Upon receipt by the Escrow
Agent of said notice from COMPANY and INVESTOR of the appointment of a successor
escrow agent, the name of a successor escrow account and a direction to
transfer the Shares and funds, the Escrow Agent shall promptly thereafter
transfer all of the Shares and funds that he is still holding in escrow, to said
successor escrow agent. Immediately after said transfer of the Shares and
funds, the Escrow Agent shall furnish COMPANY and INVESTOR with proof of such
transfer. The Escrow Agent is authorized to disregard any notices, requests,
instructions or demands received by it from COMPANY or INVESTOR after notice of
resignation or removal has been given.
1.5 The Escrow Agent shall be reimbursed by COMPANY and INVESTOR for any
reasonable expenses incurred in the event there is a conflict between the
parties and the Escrow Agent shall deem it necessary to retain counsel. The
Escrow Agent shall not be liable for any action taken or omitted by him in good
faith and in no event shall the Escrow Agent be liable or responsible except for
the Escrow Agent's own gross negligence or willful misconduct. The Escrow Agent
has made no representations or warranties in connection with this transaction
and has not been involved in the negotiation of the terms of the transaction
between COMPANY and INVESTOR, or any matters relative thereto. The Escrow Agent
has no liability hereunder to either party other than to hold the Shares and
funds received by the INVESTOR and to deliver them under the terms hereof. Each
party hereto agrees to indemnify and hold harmless the Escrow Agent from and
with respect to any suits, claims, actions or liabilities arising in any way out
of this transaction including the obligation to defend any legal action brought
which in any way arises out of or is related to this Agreement or the investment
being made by INVESTOR. COMPANY and INVESTOR each acknowledge and represent
that they are not being represented in a legal capacity by Xxxxxx X. XxXxxxx,
and they have had the opportunity to consult with their own legal advisors prior
to the signing of this agreement. The Escrow Agent is not rendering securities
advice to COMPANY or INVESTOR with respect to this proposed transaction; nor is
the Escrow Agent opining on the compliance of the proposed transaction under
applicable securities laws.
ARTICLE 2
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MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension
of time for performance of any obligation or act shall be deemed any extension
of the time for performance of any other obligation or act.
2.2 This Agreement shall be binding upon and shall inure to the benefit of
the permitted successors and assigns of the parties hereto.
2.3 This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.
2.4 Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine.
This Escrow Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if all the parties had prepared the same. Unless
otherwise indicated, all references to Articles are to this Escrow Agreement.
2.5 The parties hereto expressly agree that this Escrow Agreement
shall be governed by, interpreted under, and construed and enforced in
accordance of the laws of the State of Connecticut. Any action to enforce,
arising out of, or relating in any way to, any provisions of this Escrow
Agreement shall be brought through the American Arbitration Association at the
designated locale of Stamford, Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 14th day of February, 2003.
DUTCHESS PRIVATE EQUITIES FUND, L.P.
BY ITS GENERAL PARTNER DUTCHESS
CAPITAL MANAGEMENT, LLC
/s/ Xxxxxxx Xxxxxxxx
By:__________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
FTS APPAREL , INC.
/s/ Xxxxx Xxxxxxxxx
By:__________________________________
, its CEO
XXXXXX X. XXXXXXX, ESCROW AGENT
By: /s/ Xxxxxx X. XxXxxxx
Xxxxxx X. XxXxxxx, Esq.
