EXHIBIT
10.3


 


FUNDS
ESCROW AGREEMENT


This Agreement is dated
as of the 12th day of July, 2007
among Shea Development Corp., a Nevada corporation (the “Company”), the
Investors listed on Schedule A (the “Investors”) and Dunnington, Bartholow
& Miller LLP
(the “Escrow Agent”):


W  I  T  N  E
S  S  E  T  H:


WHEREAS, the Company and Investors are
proposing to enter into a Series B Preferred Stock Purchase Agreement calling
for the sale by the Company to the Investors of Series B Preferred Stock and
Warrants for an aggregate purchase price of up to $7,000,000; and


WHEREAS, the Investors and the Company
have agreed that the Investors will deliver to the Escrow Agent simultaneously
with the execution of this Agreement the Investor’s Subscription Amount listed
on Schedule A to be held by the Escrow Agent pending receipt of a joint letter
of instructions from the Company and the Investors contributing at least a
majority of the Subscription Amounts; and


WHEREAS, the Escrow Agent is willing to
serve as escrow agent pursuant to the terms and conditions of this Agreement;


NOW THEREFORE, the parties agree as
follows:


ARTICLE I


INTERPRETATION


1.1.          Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Series B Preferred Stock Purchase Agreement
shall have the meanings given to such terms in the Series B Preferred Stock
Purchase Agreement.  Whenever used in
this Agreement, the following terms shall have the following respective
meanings:


·              “Agreement” means this Agreement
and all amendments made hereto and thereto by written agreement between the
parties;


·              “Series
B Preferred Stock Purchase Agreement” means the Series B Preferred Stock
Purchase Agreement (and the exhibits thereto) to be entered into by the Company
and Investors.


·              “Closing”
means the closing of the Series B Preferred Stock Purchase Agreement and the
transfer of all Investor Subscription amounts to the Company.


1.2.          Waivers
and Amendments.  This Agreement may be
amended, modified, superseded, cancelled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument signed by all
parties, or, in the case of a waiver, by the party waiving compliance.  Except as expressly stated herein, no delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any right, power or privilege hereunder preclude any other or future
exercise of any other right, power or privilege hereunder.



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1.3.          Headings.  The division of this Agreement into articles,
sections, subsections and paragraphs and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.


1.4.          Law
Governing this Agreement.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to conflicts of laws principles that would result in
the application of the substantive laws of another jurisdiction.  Any action brought by any party against another
party concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located
in the state of New York.  The parties
agree to submit to the jurisdiction of such courts and waive trial by
jury.  The prevailing party (which shall
be the party which receives an award most closely resembling the remedy or
action sought) shall be entitled to recover from the other party its reasonable
attorney’s fees and costs.  In the event
that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.


1.5.          Specific
Enforcement, Consent to Jurisdiction. 
The Company and Investors acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that
the parties shall be entitled to an injuction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.  Subject to Section 1.4 hereof, each of the
Company and Investors hereby waive, and agree not to assert in any such suit,
action or proceeding, any claim that it or he is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is
improper.  Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by
law.


ARTICLE II


DELIVERIES TO THE ESCROW AGENT


2.1.          Investors
Delivery.  Simultaneously with
execution of this Agreement, Investors will deliver to the Escrow Agent the Subscription
Amount set forth after each Investor’s name on the Schedule of Investors
attached hereto as Schedule A (the “Escrowed Funds”).  The Escrowed Funds will be delivered pursuant
to the following wire transfer instructions (the “Escrow Account”):


Dunnington,
Bartholow & Miller LLP


477
Madison Avenue, 12th Floor


New
York, NY  10022


Bank:  JPMorgan Chase


ABA Number: 021000021


For Credit to: Dunnington, Bartholow & Miller LLP - IOLA


Account
Number: 777 114895


2.2.          Intention
to Create Escrow Over the Escrowed Funds.


(a)           The
Investors and Company intend that the 
Escrowed Funds shall be held in escrow by the Escrow Agent pursuant to
this Agreement for the benefit of the Investors and Company as set forth
herein.



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(b)           If the Escrow Agent has not received
a duly signed confirmation of Closing from the Company by August 15, 2007, the
Escrow Agent shall return each Investor’s subscription amount pursuant to wire
instructions provided by each Investor.


2.3.          Escrow
Agent’s Delivery of Escrowed Funds.


(a)           The
Escrow Agent shall hold and release the Escrowed Funds only pursuant to written
instructions received in accordance with the terms and conditions of this
Agreement.


(b)           Upon
confirmation from the Company that the Closing has occurred pursuant to the
Series B Preferred Stock Purchase Agreement, the Escrow Agent shall make the
initial release of the Escrowed Funds to the Company, only pursuant to written
instructions received from the Company and 
Investors contributing at least a majority of the Subscription Amounts.


(c)           Notwithstanding
the foregoing, $1,000,000 of the Escrowed Funds shall remain in escrow until
the Company confirms in writing to the Escrow Agent that the three (3) Target
Acquisitions contemplated by the Series B Preferred Stock Purchase Agreement
have closed.   At the time of closing of the last of the
three (3) Target Acquisitions, and pursuant to the written instructions of the
Company and Investors contributing at least a majority of the Subscription
Amounts delivered to the Escrow Agent, the Escrow Agent shall release to the
Company such $1,000,000.


(d)           If all of the Target Acquisitions are
not completed by September 30, 2007, then the Escrow Agent shall return such
$1,000,000 to the Investors, as set forth in the Bridgepointe Master Funds Ltd.
Funds Escrow Agreemnent dated as of July 11, 2007 in Section 2.2(d).


ARTICLE III


CONCERNING THE ESCROW
AGENT


3.1.          Duties
and Responsibilities of the Escrow Agent. 
The Escrow Agent’s duties and responsibilities shall be subject to the
following terms and conditions:


(a)           The
Investors and Company acknowledge and agree that the Escrow Agent (i) shall be
obligated only for the performance of such duties as are specifically assumed
by the Escrow Agent pursuant to this Agreement; (ii) may rely on and shall be
protected in acting or refraining from acting upon any written notice,
instruction, instrument, statement, request or document furnished to it
hereunder and believed by the Escrow Agent in good faith to be genuine and to
have been signed or presented by the proper person or party, without being
required to determine the authenticity or correctness of any fact stated
therein or the propriety or validity or the service thereof; (iii) may assume
that any person believed by the Escrow Agent in good faith to be authorized to
give notice or make any statement or execute any document in connection with
the provisions hereof is so authorized; and (iv) may consult counsel
satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.


(b)           The Investors and Company acknowledge
that the Escrow Agent is acting solely as a stakeholder at their request and that
the Escrow Agent shall not be liable for any action taken by Escrow Agent in
good faith and reasonably believed by Escrow Agent to be authorized or within
the rights or powers conferred upon Escrow Agent by this Agreement.  The Investors and Company, jointly and
severally, agree to indemnify and hold harmless the Escrow Agent and any of
Escrow Agent’s partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder,
including the fees of outside counsel and other costs and expenses of



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defending itself
against any claim or liability under this Agreement, except in the case of
gross negligence or willful misconduct on Escrow Agent’s part committed in its
capacity as Escrow Agent under this Agreement. 
The Escrow Agent shall owe a duty only to the Investors and Company
under this Agreement and to no other person.


(c)           The
Investors and Company jointly and severally agree to reimburse the Escrow Agent
for outside counsel fees, to the extent authorized hereunder and incurred in
connection with the performance of its duties and responsibilities hereunder.


(d)           The Escrow Agent may
at any time resign as Escrow Agent hereunder by giving five (5) days prior
written notice of resignation to the Investors and the Company.  Prior to the effective date of the
resignation as specified in such notice, the Investors and Company will issue
to the Escrow Agent a Joint Instruction authorizing delivery of the Escrowed
Funds to a substitute Escrow Agent selected by the Investors and Company.  If no successor Escrow Agent is named by the Investors
and Company, the Escrow Agent may apply to a court of competent jurisdiction in
the State of New York for appointment of a successor Escrow Agent, and to
deposit the Escrowed Funds with the clerk of any such court.


(e)           The
Escrow Agent does not have and will not have any interest in the Escrowed Funds,
but is serving only as Escrow Agent, having only possession thereof.  The Escrow Agent shall not be liable for any
loss resulting from the making or retention of any investment in accordance
with this Escrow Agreement.


(f)            This
Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations
shall be read into this Agreement.


(g)           The
Escrow Agent shall be permitted to act as counsel for the Company in any
dispute as to the disposition of the Escrowed Funds, in any other dispute
between the Investors and Company, whether or not the Escrow Agent is then
holding the Escrowed Funds and continues to act as the Escrow Agent hereunder.


(h)           The
provisions of this Section 3.1 shall survive the resignation of the Escrow
Agent or the termination of this Agreement.


3.2.          Dispute
Resolution: Judgments.  Resolution of disputes arising under this
Agreement shall be subject to the following terms and conditions:


(a)           If
any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Escrowed Funds, or if the Escrow Agent shall
in good faith be uncertain as to its duties or rights hereunder, the Escrow
Agent shall be authorized, without liability to anyone, to (i) refrain from
taking any action other than to continue to hold the Escrowed Funds pending
receipt of a Joint Instruction from the Investors and Company, or (ii) deposit
the Escrowed Funds with any court of competent jurisdiction in the State of New
York, in which event the Escrow Agent shall give written notice thereof to the Investors
and the Company and shall thereupon be relieved and discharged from all further
obligations pursuant to this Agreement. 
The Escrow Agent may, but shall be under no duty to, institute or defend
any legal proceedings which relate to the Escrowed Funds.  The Escrow Agent shall have the right to
retain counsel if it becomes involved in any disagreement, dispute or
litigation on account of this Agreement or otherwise determines that it is
necessary to consult counsel.


(b)           The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order.  In case the Escrow Agent obeys or
complies with a Court Order, the Escrow Agent shall



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not be liable to the Investors and
Company or to any other person, firm, corporation or entity by reason of such
compliance.


ARTICLE IV


GENERAL MATTERS


4.1.          Termination.  This escrow shall terminate upon the release
of all of the Escrowed Funds or at any time upon the agreement in writing of
the Investors and Company.


4.2.          Notices.   All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. 
Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses for such communications shall
be:


(a)           If to the Company, to:


Attn:
Francis E. Wilde, Chairman and CEO


Shea
Development Corp.


1351
Dividend Drive, Suite G


Marietta,
GA 30067


Phone:  
770-919-2209

Fax:       678-391-7515


With copy to:


Robert
T. Lincoln, Esq.


Dunnington,
Bartholow & Miller LLP


477
Madison Avenue, 12th Floor


New
York, NY  10022


Phone:  
212-682-8811

Fax:       212-661-7769


(b)           If
to the Investors, to:


To
the addresses of the Investors on


Schedule
A, Schedule of Investors


attached hereto



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(c)           If to the Escrow Agent, to:


Dunnington, Bartholow &
Miller LLP


477 Madison Avenue, 12th Floor


New York, NY  10022


Phone:  
212-682-8811

Fax:     212-661-7769


or
to such other address as any of them shall give to the others by notice made
pursuant to this Section 4.2.


4.3.          Interest.  The Escrowed Funds shall not be held in an
interest bearing account nor will interest be payable in connection therewith.


4.4.          Assignment;
Binding Agreement.  Neither this
Agreement nor any right or obligation hereunder shall be assignable by any
party without the prior written consent of the other parties hereto.  This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.


4.5.          Invalidity.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights and privileges
of the parties hereto shall be enforceable to the fullest extent permitted by
law.


4.6.          Counterparts/Execution.  This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile
transmission and delivered by facsimile transmission.


4.7.          Agreement.  Each of the undersigned states that he has
read the foregoing Escrow Agreement and understands and agrees to it.


IN WITNESS
WHEREOF, the undersigned have executed this Funds Escrow Agreement as of the
date first written above.


 


	
  

  	
  SHEA DEVELOPMENT CORP.

  
	
   

  	
  the “Company”

  
	
   

  	
   

  
	
   

  	
  

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INVESTOR

  	
   

  



 



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  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dunnington, Bartholow & Miller LLP

  	
   

  
					



 



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SCHEDULE
A


SCHEDULE OF INVESTORS


	
  Investor

  	
   

  	
  Address and

  Facsimile Number

  	
   

  	
  Investor’s

  Subscription Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RENAISSANCE US GROWTH INVESTMENT

  TRUST PLC

  	
   

  	
  c/o
  Managing Member

  8080 North Central Expressway,

  Suite 210 LB59

  Dallas, TX 75206-1857

  Facsimile

  	
   

  	
  $500,000 ($150,000 of

  this amount shall be

  paid by the conversion

  of a Convertible

  Promissory Note)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PATARA CAPITAL,
  L.P.

  	
   

  	
  5050
  Quorum Drive

  Suite 312

  Dallas, TX 75254

  	
   

  	
  $750,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JOSLYNDA CAPITAL
  LLC

  	
   

  	
  410
  Park Avenue, 6th fl.

  New York, NY 10022

  	
   

  	
  $250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUIDEPOST
  CAPITAL PARTNERS, L.P.

  	
   

  	
  10
  Glenville Street

  Greenwich, CT 06831

  	
   

  	
  $250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MORRIS SMITH

  	
   

  	
  c/o
  Gabriel Capital

  450 Park Avenue

  32nd Floor

  New York, NY 10022

  	
   

  	
  $250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STANLEY SHOPKORN

  	
   

  	
  136
  E. 79th St.

  New York, NY 10021

  	
   

  	
  $550,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STANLEY &
  TRACY SHOPKORN (JTWROS)

  	
   

  	
  136
  E. 79th St.

  New York, NY 10021

  	
   

  	
  $50,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
   

  	
   

  	
  $2,600,000

  	
   

  



 



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