EXHIBIT 10.10
ESCROW AGREEMENT
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THIS ESCROW AGREEMENT (the "Agreement")is made as of October 23, 2001, by
and between FLEXXTECH CORPORATION (the "COMPANY"), DUTCHESS PRIVATE EQUITIES
FUND, LP AND XXXXX XXXXXX (cumulatively the "INVESTORS") 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, DUTCHESS PRIVATE EQUITIES FUND, LP will be purchasing a $60,000
secured convertible debenture from the Company and XXXXX XXXXXX will be
purchasing a $180,000 secured convertible debenture from the Company
(cumulatively the "DEBENTURES"), pursuant to the Securities Purchase Agreement
entered into by the COMPANY and the INVESTORS; and
WHEREAS, COMPANY and INVESTORS have requested that the Escrow Agent hold
the $240,000 and certain documents in escrow pursuant to the terms of this
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 $240,000 in escrow until the
Escrow Agent has received the following (the "Escrow Documents"):
a. copy of fully executed Securities Purchase Agreement;
b. copy of fully executed Registration Rights Agreement;
c. original executed Debentures in favor of each Investor;
d. original executed Opinion Letter from Company counsel;
e. copy of fully executed Board Resolution;
f. copy of Purchase Order;
g. copy of fully executed Lock-up Agreement;
h. original fully executed Security Agreement; and
i. original executed UCC-1 Financing Statement(s).
Once the Escrow Agent is in receipt of all the Escrow Documents and the
$240,000, he shall wire the sum of $19,200 to Dutchess Advisors, Ltd. per its
written instructions, $3,000 to Xxxx, Xxxxxxxx & Xxxxxx LLP per its written
instructions, retain $4,000 for legal and escrow fees and wire the net balance
of $213,800 to the Company per its written instructions.
In the event the Escrow Agent does not receive the Shares on or before
October 25, 2001, he shall notify the INVESTORS, who may cancel and terminate
this Agreement by sending written notice to the Escrow Agent, in which case
Escrow Agent shall wire back the $240,000 to INVESTORS without interest.
1.2 Upon Escrow Agent's receipt of funds from INVESTORS 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 Shares being purchased without
restrictive legend.
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 INVESTORS 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 INVESTORS
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 INVESTORS 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 INVESTORS with proof of such
transfer. The Escrow Agent is authorized to disregard any notices, requests,
instructions or demands received by it from COMPANY or INVESTORS after notice of
resignation or removal has been given.
1.5 The Escrow Agent shall be reimbursed by COMPANY and INVESTORS 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 INVESTORS, 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 INVESTORS 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 INVESTORS. The COMPANY acknowledges and represents
that it is not being represented in a legal capacity by Xxxxxx X. XxXxxxx, and
has had the opportunity to consult with its own legal advisors prior to the
signing of this Agreement. The Escrow Agent is not rendering securities advice
to the COMPANY with respect to this proposed transaction.
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 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 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.
2.3 Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
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 Agreement.
2.4 The parties hereto expressly agree that this 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 Agreement shall be brought
through the American Arbitration Association at the designated locale of
Stamford, Connecticut.
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DUTCHESS PRIVATE EQUITIES FUND, L.P.
BY ITS GENERAL PARTNER DUTCHESS
CAPITAL MANAGEMENT, LLC
By:
Name: Xxxxxxx X. Xxxxxxxx, a Managing Member
XXXXX XXXXXX
By:_____________________________________
Name: Xxxxx Xxxxxx
FLEXXTECH CORPORATION
By:_____________________________________
Name: Xxxx Xxxxxxx, its President
XXXXXX X. XXXXXXX, ESCROW AGENT
By:
Name: Xxxxxx X. XxXxxxx, Esq.
