EXHIBIT 10.7
March 27, 2006
North Shore Capital Advisors Corp.
00 Xxxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Re: Escrow Agreement
Gentlemen:
This Escrow Agreement is entered into by and among North Shore Capital
Advisors Corp. in its individual capacity ("NSCA"), and in its capacity as
escrow agent (the "Escrow Agent"), Krovim LLC, a Delaware limited liability
company ("Krovim"), Xxxxxx Xxxxx ("Xxxxx"), Xxxxxxxx Xxxxxxxxxx ("Xxxxxxxxxx"),
Xxxxxx Xxxx ("Xxxx"), Xxxxxx Xxxx ("Xxxx"), and Xxxxxx Xxxxxx ("Xxxxxx," and,
together with Krovim, Cohen, Davidowitz, Xxxx and Xxxx, the "Founders") and the
stockholders listed on Exhibit B hereto (the "Stockholders"); and
WHEREAS, the Founders collectively own 218,200 shares of NSCA common stock
("Founders' Stock"), in the amounts set forth on Exhibit A hereto;
WHEREAS, the Founders and the Stockholders own warrants to purchase NSCA
common stock in amounts set forth on Exhibit B hereto (collectively the
"Warrants"); and
WHEREAS, the Founders have agreed to deliver to the Escrow Agent the
Founders' Stock and the Warrants owed by each of them and the Stockholders have
agreed to deliver to the Escrow Agent the Warrants owned by each of them
pursuant to the terms of this Escrow Agreement.
1. Holding of the Founders' Interests. The Escrow Agent agrees to hold in
escrow the Founders' Stock and the Warrants on and subject to the terms of this
Escrow Agreement. NSCA, the Founders and the Stockholders (each, a "Party," and
together, the "Parties") acknowledge that the Escrow Agent's only obligations,
in its capacity as escrow agent, are those expressly set forth in this Escrow
Agreement.
2. Disposition of Founders' Stock and the Warrants, Upon Instructions.
(a) The Founders' Stock shall be held in escrow until the earlier of (i)
February 10, 2008, and (ii) the date on which the closing price of a share of
NSCA common stock equals or exceeds $1.00 for at least ten (10) consecutive
trading days on the OTC Bulletin Board, the Nasdaq Stock Market or the American
or New York Stock Exchange. The Founders agree that the Founders' Stock may not
be sold while such Founders' Stock remains in escrow, however, the Founders may
exercise their respective voting privileges in connection with the Founders'
Stock. Any securities issued with respect to the Founders Stock as a result of a
stock dividend, split or distribution or other recapitalization shall be held by
the Escrow Agent subject to the terms of this Agreement.
(b) The Warrants shall be held in escrow until the date on which the
closing price of a share of NSCA common stock equals or exceeds $1.00 for at
least ten (10) consecutive trading days on the OTC Bulletin, Board the Nasdaq
Stock Market or the American or New York Stock Exchange. The Founders and the
Stockholders agree that the Warrants may not be sold or exercised while such
Warrants remain in escrow, however, the Stockholders and the Founders may
exercise their respective voting privileges in connection with the Warrants. Any
securities issued with respect to the Warrants as a result of a stock dividend,
split or distribution or other recapitalization shall be held by the Escrow
Agent subject to the terms of this Agreement.
(c) Upon receipt by the Escrow Agent of written instructions (the
"Instructions") from and signed by any of the Founders directing the Escrow
Agent to release all or any portion of the Founders' Stock or Instructions from
any of the Founders or Stockholders with respect to all or any portion of the
Warrants, the Escrow Agent shall, within one (1) business day of the Escrow
Agent's receipt of the Instructions, release the Founders' Stock to such Founder
or Warrants to such Founder or Stockholder in accordance with the Instructions
unless NSCA reasonably concludes that the terms of the release of such Founders'
Stock or Warrants from escrow as set forth in subsection (a) or subsection (b),
as the case may be, of this paragraph have not been met. In the event that NSCA
shall give notice to the Escrow Agent to release the Founders' Stock and/or
Warrants from escrow, the Escrow Agent may immediately release such Founders'
Stock and/or the Warrants to all of the Founders and the Stockholders.
3. No Obligation to Distribute the Founders' Stock or the Warrants if
Escrow Agent Receives a Conflict Notice or Escrow Agent Believes There is a
Conflict. In the event that NSCA objects to the release of the Founders' Stock
and/or the Warrants from escrow or in the event that the Escrow Agent shall be
uncertain as to its obligations with respect to the Founders' Stock and/or the
Warrants, or shall receive instructions, claims or demands from the Parties
which, in the Escrow Agent's opinion, are in conflict with each other or with
any of the provisions of this Escrow Agreement, the Escrow Agent shall refrain
from taking any action other than to retain the Founders' Stock and/or the
Warrants until the Escrow Agent shall have received joint written instructions
from the Parties as to the disposition of the Founders' Stock and/or the
Warrants or until the Escrow Agent is directed by a final judgment of a court of
competent jurisdiction final beyond right of review. In addition, in such
circumstances, the Escrow Agent may deposit the Founders' Stock and/or the
Warrants into any court of competent jurisdiction, there to abide by a decision
of the court. In this connection, each of the parties consents to the exclusive
jurisdiction of the federal and state courts located in the City, County and
State of New York.
4. Termination of this Escrow Agreement. This Escrow Agreement shall
terminate upon a distribution of all of the Founders' Stock and the Warrants
pursuant to Paragraph 2 or 3 of this Escrow Agreement.
5. Reimbursement; Indemnification of Escrow Agent; Fee for Services. The
Parties shall, jointly and severally, indemnify and hold harmless the Escrow
Agent against any and all losses, claims, liabilities, costs, payments and
expenses, including reasonable legal fees, which may be imposed upon or incurred
by the Escrow Agent hereunder or as a result of its services as escrow agent,
unless such expenses result from the gross negligence or willful misconduct of
the Escrow Agent. In the event that the Escrow Agent brings an action or
proceeding or defends or responds to any action or proceeding brought or
threatened to be brought against it or in the event the Escrow Agent responds to
any claim made against it with respect to this Escrow Agreement, the services
rendered by the Escrow Agent pursuant to this Escrow Agreement or the Founders'
Stock and/or the Warrants, the Parties shall jointly and severally reimburse or
advance, as the Escrow Agent shall request, the Escrow Agent for all legal fees
and expenses, incurred in connection with such action or proceeding. The terms
"action or proceeding" shall be broadly defined to include any action or
proceeding, whether in law, equity, bankruptcy or otherwise, or any claim,
arbitration or investigation, whether formal or informal, judgments,
deficiencies, settlements, liabilities and similar matters.
6. Rights of Escrow Agent. The Escrow Agent shall have no duties or
responsibilities except those expressly set forth in this Escrow Agreement. The
Escrow Agent shall have no liability under, or duty to inquire into the terms
and provisions of any agreement between the parties. No person, firm or
corporation will be recognized by the Escrow Agent as a successor or assignee of
either Party until there shall be presented to the Escrow Agent evidence
satisfactory to it of such succession or assignment. The Escrow Agent may rely
upon any instrument in writing believed in good faith by it to be genuine and
sufficient and properly presented and shall not be liable or responsible for any
action taken or omitted in accordance with the provisions thereof. The Escrow
Agent shall not be liable or responsible for any act it may do or omit to do in
connection with the performance of its duties as Escrow Agent or for any mistake
of fact or law or any error or judgment, except for its gross negligence or
willful misconduct. The Escrow Agent may consult with counsel and shall be fully
protected with respect to any action taken or omitted by it in good faith on
advice of counsel. The Escrow Agent is authorized to comply with and obey laws,
orders, judgments, decrees and regulations of any governmental authority, court,
tribunal or arbitrator. If the Escrow Agent complies with such law, order,
judgment, decree or regulations, the Escrow Agent shall not be liable to any of
the Parties or to any other person even if such law, order, judgment, decree or
regulation is subsequently reversed, modified, annulled, set aside, vacated,
found to have been entered without jurisdiction, or found to be in violation of
or beyond the scope of a constitution or a law.
7. Resignation; Successor Escrow Agent. The Escrow Agent may at any time
resign hereunder by giving written notice of its resignation to the Parties, at
their addresses set forth below, at least twenty (20) business days prior to the
date specified for such resignation to take effect. If the Escrow Agent shall
resign, and upon the effective date of the resignation of the Escrow Agent, all
property then held by the Escrow Agent pursuant to this Escrow Agreement shall
be delivered by the Escrow Agent to such person as may be designated in writing
by the joint instructions of the Parties, whereupon all such Escrow Agent's
obligations hereunder shall cease and terminate. If no such person shall have
been designated by such date, all of the Escrow Agent's obligations hereunder
shall, nevertheless, cease and terminate. The Escrow Agent's sole responsibility
thereafter shall be to hold the Founders' Stock and the Warrants and deliver the
same to a person jointly designated by the Parties or, if the Parties shall have
failed to designate a successor escrow agent, the Escrow Agent may deposit the
Founders' Stock and/or the Warrants into a court of competent jurisdiction as
provided in Paragraph 3 of this Escrow Agreement.
8. Notices. Any notice, request, demand and other communication hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
facsimile or e-mail (if receipt is confirmed by the recipient) or sent by
messenger or overnight courier service which provides evidence of delivery or by
certified or registered mail, return receipt requested, postage prepaid, and
shall be deemed given when delivered, if to NSCA or the Escrow Agent, at 00
Xxxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx, 00000, fax (000) 000-0000, Attention
Xxxxxx Xxxxx, if to any of the Founders or Stockholders, at the address or fax
number on the signature page of this Escrow Agreement. If any Party refuses to
accept delivery (other than notice given by telecopier or e-mail), notice shall
be deemed to have been given on the date of attempted delivery. Any Party may,
by like notice, change the person, address or telecopier number to which notice
should be sent.
9. Governing Law. This Escrow Agreement shall in all respects be construed
and interpreted in accordance with, and the rights of the parties shall be
governed by, the laws of the State of New York applicable to contracts executed
and to be performed wholly within such State. Each party hereby (a) consents to
the exclusive jurisdiction of the United States district court for the Southern
District of New York and the Supreme Court of the State of New York in the
County of New York in any action relating to or arising out of this Escrow
Agreement, (b) agrees that any process in any action commenced in such court
under this Escrow Agreement may be served upon either (i) by certified or
registered mail, return receipt requested, or by messenger or courier service
which obtains evidence of delivery, with the same full force and effect as if
personally served upon him in New York City or (ii) by any other method of
service permitted by law and (c) waives any claim that the jurisdiction of any
such tribunal is not a convenient forum for any such action and any defense or
lack of in personam jurisdiction with respect thereto.
10. Paragraph Headings. Paragraph headings contained in this Escrow
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Escrow Agreement.
11. Binding on Successors and Assigns; No Beneficiaries. This Escrow
Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective heirs, executors, personal representatives, successors and
assigns; provided, that any assignment of this Escrow Agreement or their rights
hereunder by any party hereto without the written consent of the other Parties
shall be void. Nothing in this Escrow Agreement is intended to confer upon any
other person any rights or remedies under or by reason of this Escrow Agreement.
12. Counterparts. This Escrow Agreement may be executed and delivered in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Amendment, Waiver. No modification, waiver or discharge of any
provisions of this Escrow Agreement shall bind any party unless it is in
writing, specifically refers to this Escrow Agreement and is signed by or on
behalf of the party to be bound or affected thereby.
[Additional Signatures on following pages]
Very truly yours,
NORTH SHORE CAPITAL ADVISORS CORP.
/s/ Xxxxxx Xxxxx
By:_______________________________________
Xxxxxx Xxxxx
President
/s/ Xxxxxx Xxxxx
_________________________________________
XXXXXX XXXXX, individually
Address of Founder: KROVIM LLC
X.X. Xxx 000 By: Nesher, LLC
Xxxxxxxx, Xxx Xxxx 00000 /s/ Xxx Xxxxxxxx
Telephone No. (000) 000-0000 By:_______________________________________
Telecopier No.: (000) 000-0000 Xxx Xxxxxxxx, Manager
/s/ Xxxxxxxx Xxxxxxxxxx
Address of Founder: ____________________________________
00 Xxxx Xxxxxx, 0xx Xxxxx XXXXXXXX XXXXXXXXXX, individually
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxx Xxxx
Address of Founder: ____________________________________
0000 Xxxxx Xxxxxx, #0X XXXXXX XXXX, individually
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxx Xxxx
Address of Founder: ____________________________________
One Leeds Drive XXXXXX XXXX, individually
Port Xxxxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxx Xxxxxx
Address of Founder: ____________________________________
000 Xxxx 00xx Xxxxxx, #XX XXXXXX XXXXXX, individually
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxx Xxxxxx
Address of Founder: ____________________________________
0000 Xxxxx Xxxxxxx, #0X XXXX XXXXXX, individually
Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxx Xxxxx
Address of Founder: ____________________________________
0000 00xx Xxxxxx XXXXXX XXXXX, individually
Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxx
Address of Founder: ____________________________________
00 Xxxxxxx Xxxxx XXXXX XXXXX, individually
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
/s/ Xxxxx Xxxxxxxx
Address of Founder: ____________________________________
000 Xxxx 00xx Xxxxxx, #0X XXXXX XXXXXXXX, individually
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxx Xxxx
Address of Founder: ____________________________________
00 Xxxxxx Xxxxxx XXXX XXXX, individually
Xxxxxx Xxxxxx, Xxx Xxxx 00000
/s/ Xxxxxxx Xxxxxxx
Address of Founder: ____________________________________
000 Xxxxxxx Xxxxxx XXXXXXX XXXXXXX, individually
Freeport, Xxx Xxxx 00000
/s/ Xxxxxx Xxxxxx
Address of Founder: ____________________________________
000 Xxxxx Xxxxx XXXXXX XXXXXX, individually
Xxx Xxxxx, Xxx Xxxx 00000
/s/ Xxxx Xxxxxx
Address of Founder: ____________________________________
000 Xxxx 00xx Xxxxxx, #XX XXXX XXXXXX, individually
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxx
Address of Founder: ____________________________________
000 Xxxxxx Xxxxxx XXXXX XXXX, individually
Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxxxxxxx
Address of Founder: ___________________________________
00 Xxxxxxxxxxx Xxxx XXXXX XXXXXXXXXXXX, individually
Xxx Xxxxxx, Xxx Xxxxxx 00000
AGREED TO AND ACCEPTED:
NORTH SHORE CAPITAL ADVISORS CORP.,
as Escrow Agent
/s/ Xxxxxx Xxxxx
By: ____________________________________
Xxxxxx Xxxxx
