EXHIBIT 10.3
 
INDEMNIFICATION SHARE ESCROW AGREEMENT
 
This Indemnification Escrow Agreement (this “Agreement”) is entered into as of
January 28, 2014, by and among Duane Street Corp., a Delaware corporation (the
“Parent”), Tom Brophy, (the “Indemnification Representative”) and Gottbetter &
Partners, LLP (the “Escrow Agent”).
 
WHEREAS, the Parent has entered into a Contribution Agreement (the “Contribution
Agreement”) with Raditaz, LLC, a Connecticut limited liability company (the
“Company”), and the members of the Company (the “Company Members”), pursuant to
which (i) the Company Members will contribute their respective membership
interests in the Company to Parent, (ii) the Company will become a wholly-owned
subsidiary of the Parent, and (iii) the Company Members will receive shares of
common stock of the Parent (the “Contribution Shares”);
 
WHEREAS, the Contribution Agreement provides that 95% (575,622 pre-split shares)
of the Contribution Shares (the “Initial Shares”) to be issued to such Company
Members shall be delivered to such Company Members and 5% (30,296 pre-split
shares) of the Contribution Shares to be issued to such Company Members shall be
delivered to the Escrow Agent to secure the indemnification obligations of the
Company Members as of the Closing Date, as such term is defined in the
Contribution Agreement, to the Parent; and
 
WHEREAS, the Contribution Agreement provides for the execution of this Agreement
and the establishment of an escrow account and the parties hereto desire to
establish the terms and conditions pursuant to which such escrow account will be
established and maintained.
 
NOW, THEREFORE, the parties hereto hereby agree as follows:
 
1. Escrow and Indemnification.
 
(a) Escrow of Shares. Simultaneously with the execution of this Agreement, the
Parent shall cause to be issued and shall deposit with the Escrow Agent
certificates representing an aggregate number of shares of common stock of the
Parent (30,296 pre-split shares), as determined pursuant to Section 1.7(b) of
the Contribution Agreement, issued in the name of the Escrow Agent or its
nominee. The shares deposited with the Escrow Agent pursuant to this Section
1(a) are referred to herein as the “Escrow Shares.” The Escrow Shares shall be
held in trust fund and shall not be subject to any lien, attachment, trustee
process or any other judicial process of any creditor of any party hereto. The
Escrow Agent agrees to hold the Escrow Shares in an escrow account (the “Escrow
Account”), subject to the terms and conditions of this Agreement.
 
(b) Indemnification. The Company Members have agreed in Section 6.1 of the
Contribution Agreement to indemnify and hold harmless the Parent from and
against certain Damages (as defined in Section 6.1 of the Contribution
Agreement). The Escrow Shares shall be (i) security for such indemnity
obligations of the Company Members, subject to the limitations, and in the
manner provided, in this Agreement and the Contribution Agreement and (ii) shall
be the exclusive means for the Parent to collect any Damages with respect to
which the Parent is entitled to indemnification under Article 6 of the
Contribution Agreement.
 
 
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(c) Dividends, Etc. Any securities distributed in respect of or in exchange for
any of the Escrow Shares, whether by way of stock dividends, stock splits or
otherwise, shall be issued in the name of the Escrow Agent or its nominee and
shall be delivered to the Escrow Agent, who shall hold such securities in the
Escrow Account. Such securities shall be considered Escrow Shares for purposes
hereof. Any cash dividends or property (other than securities) distributed in
respect of the Escrow Shares shall promptly be distributed by the Escrow Agent
to the Company Members in accordance with Section 3(c) hereof.
 
(d) Voting of Shares. The Indemnification Representative shall have the right,
in his sole discretion, to direct the Escrow Agent in writing as to the exercise
of any voting rights pertaining to the Escrow Shares and the Escrow Agent shall
comply with any such written instructions. In the absence of such instructions,
the Escrow Agent shall not vote any of the Escrow Shares. The Indemnification
Representative shall have no obligation to solicit consents or proxies from the
Company Members for the purpose of any such vote.
 
(e) Transferability. The respective interests of the Company Members in the
Escrow Shares shall not be assignable or transferable, other than by operation
of law. Notice of any such assignment or transfer by operation of law shall be
given to the Escrow Agent and the Parent, and no such assignment or transfer
shall be valid until such notice is given.
 
2. Intentionally Omitted.
 
3. Distribution of Escrow Shares.
 
(a) The Escrow Agent shall distribute the Escrow Shares only in accordance with
(i) a written instrument delivered to the Escrow Agent that is executed by both
the Parent and the Indemnification Representative that instructs the Escrow
Agent as to the distribution of some or all of the Escrow Shares, (ii) an order
of a court of competent jurisdiction, a copy of which is delivered to the Escrow
Agent by either the Parent or the Indemnification Representative, that instructs
the Escrow Agent as to the distribution of some or all of the Escrow Shares, or
(iii) the provisions of Section 3(b) hereof.
 
(b) Within five business days after January 27, 2016 (the “Termination Date”),
the Escrow Agent shall have the Escrow Shares registered in the names of the
Company Members in direct proportion to their respective ownership interests
therein and shall thereafter distribute to the Company Members all of the Escrow
Shares then held in escrow. Notwithstanding the foregoing, if the Parent has
previously delivered to the Escrow Agent a copy of a Claim Notice (as
hereinafter defined) and the Escrow Agent has not received written notice of the
resolution of the claim covered thereby, or if the Parent has previously
delivered to the Escrow Agent a copy of an Expected Claim Notice (as hereinafter
defined) and the Escrow Agent has not received written notice of the resolution
of the anticipated claim covered thereby, the Escrow Agent shall retain in
escrow after the Termination Date such number of Escrow Shares as have a Value
(as defined in Section 4 below) equal to the Claimed Amount (as hereinafter
defined) covered by such Claim Notice or equal to the estimated amount of
Damages set forth in such Expected Claim Notice, as the case may be. Any Escrow
Shares so retained in escrow shall be distributed only in accordance with the
terms of clauses (i) or (ii) of Section 3(a) hereof. For purposes of this
Agreement, a Claim Notice means a written notification under the Contribution
Agreement given by the Parent to the Company Members which contains (i) a
detailed description and the amount (the “Claimed Amount”) of any Damages
incurred or reasonably expected to be incurred by the Parent, (ii) a statement
that the Parent is entitled to indemnification under Article 6 of the
Contribution Agreement for such Damages and a reasonable detailed explanation of
the basis therefor, and (iii) a demand for payment (in the manner provided in
Section 6.3(b) of the Contribution Agreement) in the amount of such Damages. For
purposes of this Agreement, an Expected Claim Notice means a notice delivered
pursuant to the Contribution Agreement by the Parent to a Company Member, before
expiration of a representation or warranty, to the effect that, as a result of a
legal proceeding instituted by or written claim made by a third party, the
Parent reasonably expects to incur Damages as a result of a breach of such
representation or warranty.
 
 
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(c) Any distribution of all or a portion of the Escrow Shares (or cash or other
property pursuant to Section 2(c)) to a Company Member shall be made by delivery
of stock certificates issued in the name of the Company Member (or cash or other
property), covering such percentage of the Escrow Shares (or cash or other
property) being distributed as is calculated in accordance with the percentages
set forth opposite each such Company Member’s name on Attachment A attached
hereto (which Attachment shall be updated after the date hereof if the Parent
deposits additional Escrow Shares in the Escrow Account on behalf of Company
Members after the Closing Date). Distributions to the Company Members shall be
made by mailing stock certificates to such holders at their respective addresses
shown on Attachment A (or such other address as may be provided in writing to
the Escrow Agent by any such Company Member). No fractional Escrow Shares shall
be distributed to Company Members pursuant to this Agreement. Instead, the
number of shares that each Company Member shall receive shall be rounded up or
down to the nearest whole number (provided that the Indemnification
Representative shall have the authority to effect such rounding in such a manner
that the total number of whole Escrow Shares to be distributed equals the number
of Escrow Shares then held in the Escrow Account).
 
4. Valuation of Escrow Shares. For purposes of this Agreement, the “Value” of
any Escrow Shares shall be $1.00 per share (subject to subsequent adjustment for
stock splits, stock dividends, or similar events affecting the Escrow Shares
following the Contribution), multiplied by the number of such Escrow Shares.
 
5. Fees and Expenses of Escrow Agent. The Parent shall pay the fees of the
Escrow Agent for the services to be rendered by the Escrow Agent hereunder.
 
6. Limitation of Escrow Agent’s Liability.
 
(a) The Escrow Agent shall incur no liability with respect to any action taken
or suffered by it in reliance upon any notice, direction, instruction, consent,
statement or other documents believed by it to be genuine and duly authorized,
nor for other action or inaction except its own willful misconduct or gross
negligence. The Escrow Agent shall not be responsible for the validity or
sufficiency of this Agreement. In all questions arising under the Escrow
Agreement, the Escrow Agent may rely on the advice of counsel, and the Escrow
Agent shall not be liable to anyone for anything done, omitted or suffered in
good faith by the Escrow Agent based on such advice. The Escrow Agent shall not
be required to take any action hereunder involving any expense unless the
payment of such expense is made or provided for in a manner reasonably
satisfactory to it. In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damages.
 
 
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(b) The Parent agrees to indemnify the Escrow Agent for, and hold it harmless
against, any loss, liability or expense incurred without gross negligence or
willful misconduct on the part of Escrow Agent, arising out of or in connection
with its carrying out of its duties hereunder.
 
7. Liability and Authority of Indemnification Representative; Successors and
Assignees.
 
(a) The Indemnification Representative shall not incur any liability to the
Company Members with respect to any action taken or suffered by him in reliance
upon any note, direction, instruction, consent, statement or other document
believed by him to be genuinely and duly authorized, nor for other action or
inaction except his own willful misconduct or gross negligence. The
Indemnification Representative may, in all questions arising under this
Agreement, rely on the advice of counsel and the Indemnification Representative
shall not be liable to the Company Members for anything done, omitted or
suffered in good faith by the Indemnification Representative based on such
advice.
 
(b) In the event of the death or permanent disability of the Indemnification
Representative, or his resignation or termination as the Indemnification
Representative, a successor Indemnification Representative shall be elected by a
majority vote of the Company Members, with each such Company Member (or his, her
or its successors or assigns) to be given a vote equal to the number of votes
represented by the shares of stock of the Company held by such Company Member
immediately prior to the effective time of the Contribution Agreement. Each
successor Indemnification Representative shall have all of the power, authority,
rights and privileges conferred by this Agreement upon the original
Indemnification Representative, and the term “Indemnification Representative” as
used herein shall be deemed to include each successor Indemnification
Representative.
 
(c) The Indemnification Representative shall have full power and authority to
represent the Company Members, and their successors, with respect to all matters
arising under this Agreement and Article VI of the Contribution Agreement and
all actions taken by the Indemnification Representative hereunder or under
Article VI of the Contribution Agreement shall be binding upon the Company
Members, and their successors, as if expressly confirmed and ratified in writing
by each of them. Without limiting the generality of the foregoing, the
Indemnification Representative shall have full power and authority to interpret
all of the terms and provisions of this Agreement, to compromise any claims
asserted hereunder and to authorize any release of the Indemnification Escrow
Shares to be made with respect thereto, on behalf of the Company Members and
their successors.
 
(d) After Closing Date, the majority vote of the Company Members may terminate
the Indemnification Representative and appoint a successor Indemnification
Representative in accordance with the terms of Section 7(b) above.
 
(e) The Escrow Agent may rely on the Indemnification Representative as the
exclusive agent of the Company Members under this Agreement and shall incur no
liability to any party with respect to any action taken or suffered by it in
good faith reliance thereon.
 
 
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8. Amounts Payable by Company Members. The amounts payable by the Company
Members under this Agreement (i.e., the indemnification obligations pursuant to
Section 6(b)) shall be payable solely as follows. The Escrow Agent shall notify
the Company Member of any such amount payable by such Company Member as soon as
it becomes aware that any such amount is payable, with a copy of such notice to
the Parent. Commencing on the sixth business day after the delivery of such
notice, the Escrow Agent shall sell such number of Escrow Shares (up to the
number of Escrow Shares then available in the Escrow Account), subject to
compliance with all applicable securities laws, as is necessary to raise such
amount, and shall be entitled to apply the proceeds of such sale in satisfaction
of such indemnification obligations of the Company Members; provided that if a
Company Member delivers to the Escrow Agent (with a copy to the Parent), within
five business days after delivery of such notice by the Company Member, a
written notice contesting the legitimacy or reasonableness of such amount as
applied specifically to them, then the Escrow Agent shall not sell any Escrow
Shares issued in such Company Member’s name to raise the disputed portion of
such claimed amount except in accordance with the terms of clauses (i) or (ii)
of Section 3(a).
 
9.Termination. This Agreement shall terminate upon the distribution by the
Escrow Agent of all of the Escrow Shares in accordance with this Agreement;
provided that the provisions of Sections 6 shall survive such termination.
 
10. Notices. All notices, instructions and other communications given hereunder
or in connection herewith shall be in writing. Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail, return
receipt requested, postage prepaid, or (ii) via a reputable nationwide overnight
courier service, in each case to the address set forth below. Any such notice,
instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service.
 
If to the Parent:
 
Duane Street Corp.
2217 New London Turnpike
South Glastonbury, CT 06073
Attn: Tom Brophy, President
 
with a copy to (which shall not constitute notice hereunder):
 
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, NY 10017
Attn: Barry I. Grossman, Esq.
 
If to the Company Members:
 
Tom Brophy
℅ Duane Street Corp.
2217 New London Turnpike
South Glastonbury, CT 06073
 
with a copy to:
 
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, NY 10017
Attn: Barry I. Grossman, Esq.
 
 
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If to the Escrow Agent:
 
Gottbetter & Partners, LLP
488 Madison Avenue, 12th Floor
New York, NY 10022
Attn: Adam S. Gottbetter, Esq.
 
Any party may give any notice, instruction or communication in connection with
this Agreement using any other means (including personal delivery, telecopy or
ordinary mail), but no such notice, instruction or communication shall be deemed
to have been delivered unless and until it is actually received by the party to
whom it was sent. Any party may change the address to which notices,
instructions or communications are to be delivered by giving the other parties
to this Agreement notice thereof in the manner set forth in this Section 9.
 
11. Successor Escrow Agent. In the event the Escrow Agent becomes unavailable or
unwilling to continue in its capacity herewith, the Escrow Agent may resign and
be discharged from its duties or obligations hereunder by delivering a
resignation to the parties to this Escrow Agreement, not less than 60 days prior
to the date when such resignation shall take effect. The Parent may appoint a
successor Escrow Agent without the consent of the Indemnification Representative
and may appoint any other successor Escrow Agent with the consent of the
Indemnification Representative, which shall not be unreasonably withheld. If,
within such notice period, the Parent provides to the Escrow Agent written
instructions with respect to the appointment of a successor Escrow Agent and
directions for the transfer of any Escrow Shares then held by the Escrow Agent
to such successor, the Escrow Agent shall act in accordance with such
instructions and promptly transfer such Escrow Shares to such designated
successor. If no successor Escrow Agent is named as provided in this Section 11
prior to the date on which the resignation of the Escrow Agent is to properly
take effect, the Escrow Agent may apply to a court of competent jurisdiction for
appointment of a successor Escrow Agent.
 
12. General.
 
(a) Governing Law; Assigns. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
conflict-of-law principles and shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.
 
(b) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
(c) Entire Agreement. Except for those provisions of the Contribution Agreement
referenced herein, this Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter of this Agreement
and supersedes all prior agreements or understandings, written or oral, between
the parties with respect to the subject matter hereof.
 
 
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(d) Waivers. No waiver by any party hereto of any condition or of any breach of
any provision of this Agreement shall be effective unless in writing. No waiver
by any party of any such condition or breach, in any one instance, shall be
deemed to be a further or continuing waiver of any such condition or breach or a
waiver of any other condition or breach of any other provision contained herein.
 
(e) Amendment. This Agreement may be amended only with the written consent of
the Parent, the Escrow Agent and the Indemnification Representative.
 
(f) Consent to Jurisdiction and Service. The parties hereby absolutely and
irrevocably consent and submit to the jurisdiction of the courts in the State of
New York and of any Federal court located in the State of New York in connection
with any actions or proceedings brought against any party hereto by the Escrow
Agent arising out of or relating to this Escrow Agreement. In any such action or
proceeding, the parties hereby absolutely and irrevocably waive personal service
of any summons, complaint, declaration or other process and hereby absolutely
and irrevocably agree that the service thereof may be made by certified or
registered first-class mail directed to such party, at their respective
addresses in accordance with Section 10 hereof.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
 
 

  PARENT:           DUANE STREET CORP.          
 
By:
/s/ Peretz Yehuda Aisenstark       Name: Peretz Yehuda Aisenstark       Title:
President             INDEMNIFICATION REPRESENTATIVE             /s/ Thomas
Brophy       Name: Thomas Brophy             ESCROW AGENT:           GOTTBETTER
& PARTNERS, LLP           By: /s/ Adam S. Gottbetter       Name: Adam S.
Gottbetter       Title: Managing Partner          

 
 
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