<PAGE>
                                                                    EXHIBIT 10.7


                          SUBSCRIPTION ESCROW AGREEMENT

         Subscription Escrow Agreement (the "Escrow Agreement") dated as of the
effective date (the "Effective Date") set forth on schedule 1 attached hereto
("Schedule 1") by and between the corporation identified on Schedule 1 (the
"Issuer") and JPMorgan Trust Company, N.A. as escrow agent hereunder (the
"Escrow Agent").

WHEREAS, the Issuer has filed a registration statement on Form S-1 under the
Securities Act of 1933, as amended, with the Securities and Exchange Commission,
File No. 333-107769 (the "Registration Statement"), relating to the subscription
for and sale of shares of common stock ("Units"), par value $0.001 per share, in
the Issuer, with a minimum aggregate investment required of 1,200,000 Units (the
"Minimum Subscription Amount") and a maximum aggregate investment of 2,000,000
Units (the "Maximum Subscription Amount"), at a price of $10.00 per Unit;

WHEREAS, the Issuer proposes to establish an escrow fund to be held by the
Escrow Agent until the sale of Units terminates;

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:

1. APPOINTMENT. The Issuer hereby appoints the Escrow Agent as its escrow agent
for the purposes set forth herein, and the Escrow Agent hereby accepts such
appointment under the terms and conditions set forth herein.

2. ESTABLISHMENT OF ESCROW ACCOUNT. On or before the date of the commencement of
the Offering ("Commencement Date"), the Issuer shall establish an account with
the Escrow Agent, which account shall have the Escrow Account Name set forth on
schedule I attached hereto ("Escrow Fund"). The Issuer agrees to notify Escrow
Agent in writing of the Commencement Date of the offering, which notification
may be made via first class mail, overnight delivery, or facsimile at the
address or facsimile number provided on schedule I. The Issuer will instruct
subscribers to make the Subscription Funds, by check or money order, payable to
the Escrow Fund. Any check received that is not made payable to the Escrow Fund
shall be returned to the person or entity submitting same.

3. RECEIPT AND DEPOSIT OF SUBSCRIPTION FUNDS. The Issuer will instruct
subscribers to send a check or money order for the Subscription Funds directly
to the Escrow Agent via first class mail or overnight delivery. Wire transfers
and cash payments will not be accepted. The Subscription Funds shall be
accompanied by a written stock order form, in the form attached hereto as
Exhibit A ("Stock Order Form"), which form shall set forth, among other things,
the name, and address and taxpayer ID number or social security number of the
subscriber, the number of Units of the Issuer subscribed for, and the amount
paid therefor. The Escrow Agent will deposit such funds into the Escrow Fund.
The Escrow Agent will establish and maintain a computer file containing a list
of all subscriptions, including the subscriber's name and taxpayer ID number or
social security number, and number of Units for each subscription ("Subscription
List"). It shall not be the responsibility of the Escrow Agent to verify that
the amount of Subscription Funds accompanying a Stock Order Form corresponds to
the amount due for the number of Units subscribed for on such Stock Order Form.
The Escrow Agent shall make the Subscription List available for review by the
Issuer on a daily basis via electronic means. The Escrow Agent shall forward the
original Stock Order Forms to the Issuer on a weekly basis via first class mail
or overnight delivery at the address provided on schedule I.

4. INVESTMENT OF ESCROW FUND. During the term of this Escrow Agreement, the
Escrow Fund shall be invested and reinvested by the Escrow Agent in the
investment indicated on Schedule 1 or such other investments as shall be
directed in writing by the Issuer and as shall be acceptable to the Escrow
Agent. All investment orders involving U.S. Treasury obligations, commercial
paper and other direct investments will be executed through JPMorgan Fleming
Asset Management (JPMFAM), in the investment management division of JPMorgan
Chase. Subject to principles of best execution, transactions are effected on
behalf of the Escrow Fund through broker-dealers selected by JPMFAM. In this
regard, JPMFAM seeks to attain the best overall result for the Escrow Fund,
taking into consideration quality of service and reliability. An agency fee will
be assessed in connection with each transaction. Periodic statements will be
provided to Issuer reflecting transactions executed on behalf of the Escrow
Fund. The Issuer, upon written request, will receive a statement of transaction
details upon completion of any securities transaction in the Escrow Fund without
any additional cost. The Escrow Agent shall have the right to


This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.



<PAGE>



liquidate any investments held in order to provide funds necessary to make
required payments under this Escrow Agreement. The Escrow Agent shall have no
liability for any loss sustained as a result of any investment in an investment
indicated on Schedule 1 or any investment made pursuant to the instructions of
the parties hereto or as a result of any liquidation of any investment prior to
its maturity or for the failure of the parties to give the Escrow Agent
instructions to invest or reinvest the Escrow Fund. The proceeds of any
investment of the Escrow Fund shall accrue to the benefit of the Issuer and
shall be disbursed in accordance with the terms of paragraph 5 below.

5. DISPOSITION AND TERMINATION.


         (i) Escrow Period and Term of Agreement. The escrow period ("Escrow
Period") shall begin on the Commencement Date and shall terminate upon the
earlier to occur of the following: (a) such time as the Escrow Agent shall have
disbursed the funds in the Escrow Fund to the Issuer pursuant to section (iv) of
this paragraph 5; or (b) 5:00 p.m., Illinois time, on the 150th day following
the Commencement Date ("Termination Date"), whereupon Subscription Funds shall
be disbursed as set forth in section (iv) of this paragraph 5.


         (ii) Escrow Fund Ownership. The Issuer understands and agrees that
during the Escrow Period, the Issuer shall not be entitled to any funds on
deposit in the Escrow Fund (except as released to the Issuer pursuant to section
(iv) of this paragraph 5), and no such funds shall become the property of the
Issuer or any other entity nor shall such funds be subject to the debts of the
Issuer or any other entity (except as released to the Issuer pursuant to section
iv of this paragraph 5). The term of this Agreement shall end upon the earliest
to occur of 5(i)(a) or 5(i)(b) above. The termination of this Agreement is
required to be confirmed by the Issuer in writing, provided that the failure to
do so shall not affect the termination of this Agreement.

         (iii) Notification to Issuer of Escrow Fund Balance. Once the Escrow
Agent is in receipt of collected Subscription Funds totaling at least the
Minimum Subscription Amount, the Escrow Agent shall notify the Issuer of same in
writing. Once the Escrow Agent is in receipt of collected Subscription Funds
totaling at least the Maximum Subscription Amount, the Escrow Agent shall again
notify the Issuer of same in writing.


         (iv) Closing of the Offering. The Issuer may close the offering at any
time within 150 days of the Commencement Date. The Issuer agrees to notify the
Escrow Agent in writing of the closing date of the offering (the "Offering
Closing Date") and the amount of subscriptions received. Upon receipt by the
Escrow Agent of such written notification from Issuer, the following procedure
will take place.


         a.       If the Issuer has received subscriptions for at least the
                  Minimum Subscription Amount by the Offering Closing Date but
                  has not received subscriptions exceeding the Maximum
                  Subscription Amount, the Escrow Fund, along with all accrued
                  interest thereon, will be promptly paid to or credited to the
                  account of, or otherwise transferred to the Issuer pursuant to
                  instructions from the Issuer.

         b.       If the Issuer has received subscriptions in an amount
                  exceeding the Maximum Subscription Amount, the Maximum
                  Subscription Amount will be promptly paid to or credited to
                  the account of, or otherwise transferred to the Issuer
                  pursuant to instructions from the Issuer. Additionally, the
                  Issuer shall calculate the allocation of Units according to
                  the rules outlined in the Prospectus and shall provide written
                  instructions to the Escrow Agent for the refund of
                  Subscription Funds in excess of the Maximum Subscription
                  Amount within 10 days of the closing of the offering. Accrued
                  interest on the Escrow Fund shall be paid to the Issuer
                  pursuant to the Issuer's instructions. No interest shall be
                  paid to subscribers.

         c.       If the Issuer has not received subscriptions for at least the
                  Minimum Subscription Amount, the Escrow Agent shall distribute
                  to each subscriber the appropriate Subscriber Investment
                  Amount pursuant to written instructions of the Issuer within
                  10 days of the closing of the offering. No interest shall be
                  paid to subscribers. Fees owed to the Escrow Agent pursuant to
                  this Agreement may be deducted by Escrow Agent from interest,
                  and the remaining balance shall be paid to the Issuer.

6. ESCROW AGENT. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no duties shall be implied. The Escrow Agent
shall have no liability under and no duty to inquire as to the


This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.


<PAGE>



provisions of any agreement other than this Escrow Agreement. The Escrow Agent
may rely upon and shall not be liable for acting or refraining from acting upon
any written notice, instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper
party or parties. The Escrow Agent shall be under no duty to inquire into or
investigate the validity, accuracy or content of any such document. The Escrow
Agent shall have no duty to solicit any payments which may be due it or the
Escrow Fund. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith except to the extent that a court of competent
jurisdiction determines that the Escrow Agent's gross negligence or willful
misconduct was the primary cause of any loss to the Issuer. The Escrow Agent may
execute any of its powers and perform any of its duties hereunder directly or
through agents or attorneys (and shall be liable only for the careful selection
of any such agent or attorney) and may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow Agent shall
not be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or other
skilled persons. In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions, claims or demands from
any party hereto which, in its opinion, conflict with any of the provisions of
this Escrow Agreement, it shall be entitled to refrain from taking any action
and its sole obligation shall be to keep safely all property held in escrow
until it shall be directed otherwise in writing by all of the other parties
hereto or by a final order or judgment of a court of competent jurisdiction.
Anything in this Escrow Agreement to the contrary notwithstanding, in no event
shall the Escrow Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.

7. SUCCESSION. The Escrow Agent may resign and be discharged from its duties or
obligations hereunder by giving 10 days advance notice in writing of such
resignation to the other parties hereto specifying a date when such resignation
shall take effect. The Escrow Agent shall have the right to withhold an amount
equal to any amount due and owing to the Escrow Agent, plus any costs and
expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow
Agent in connection with the termination of the Escrow Agreement. Any
corporation or association into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any corporation or
association to which all or substantially all the escrow business of the Escrow
Agent's corporate trust line of business may be transferred, shall be the Escrow
Agent under this Escrow Agreement without further act.

8. FEES. The Issuer agrees to (i) pay the Escrow Agent upon execution of this
Agreement and from time to time thereafter reasonable compensation for the
services to be rendered hereunder, which unless otherwise agreed in writing
shall be as described in Schedule 1 attached hereto, and (ii) pay or reimburse
the Escrow Agent upon request for all expenses, disbursements and advances,
including reasonable attorney's fees and expenses, incurred or made by it in
connection with the preparation, execution, performance, delivery modification
and termination of this Agreement.


9. INDEMNITY. The Issuer shall indemnify, defend and save harmless the Escrow
Agent and its directors, officers, agents and employees (the "indemnitees") from
all loss, liability or expense (including the fees and expenses of in house or
outside counsel) arising out of or in connection with (i) the Escrow Agent's
execution and performance of this Escrow Agreement, except in the case of any
indemnitee to the extent that such loss, liability or expense is due to the
gross negligence or willful misconduct of such indemnitee, or (ii) its following
any instructions or other directions from the Issuer, except to the extent that
its following any such instruction or direction is expressly forbidden by the
terms hereof. The parties hereto acknowledge that the foregoing indemnities
shall survive the resignation or removal of the Escrow Agent or the termination
of this Escrow Agreement. The parties hereby grant the Escrow Agent a lien on,
right of set-off against and security interest in the Escrow Fund for the
payment of any claim for indemnification, compensation, expenses and amounts due
hereunder.

10. TINS. The Issuer represents that its correct TIN assigned by the Internal
Revenue Service ("IRS") or any other taxing authority is set forth in Schedule
1. Upon execution of this Agreement, the Issuer shall provide the Escrow Agent
with a fully executed W-8 or W-9 ITS form, which shall include the Issuer's TIN.
All interest or other income earned under the Escrow Agreement shall be
allocated and/or paid as directed in a joint written direction of the Issuer and
reported by the recipient to the Internal Revenue Service or any other taxing
authority. Notwithstanding such written directions, Escrow Agent shall report
and, as required withhold any taxes as it


This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.



<PAGE>



determines may be required by any law or regulation in effect at the time of the
distribution. In the absence of timely direction, all proceeds of the Escrow
Fund shall be retained in the Escrow Fund and reinvested from time to time by
the Escrow Agent as provided in Section 3. In the event that any earnings remain
undistributed at the end of any calendar year, Escrow Agent shall report to the
Internal Revenue Service or such other authority such earnings as it deems
appropriate or as required by any applicable law or regulation or, to the extent
consistent therewith, as directed in writing by the Issuer. In addition, Escrow
Agent shall withhold any taxes it deems appropriate and shall remit such taxes
to the appropriate authorities.

11. NOTICES. All communications hereunder shall be in writing and shall be
deemed to be duly given and received:

         (i) upon delivery if delivered personally or upon confirmed transmittal
         if by facsimile;

         (ii) on the next Business Day (as hereinafter defined) if sent by
         overnight courier; or

         (iii) four (4) Business Days after mailing if mailed by prepaid
         registered mail, return receipt requested, to the appropriate notice
         address set forth on Schedule 1 or at such other address as any party
         hereto may have furnished to the other parties in writing by registered
         mail, return receipt requested.

Notwithstanding the above, in the case of communications delivered to the Escrow
Agent pursuant to (ii) and (iii) of this Section 10, such communications shall
be deemed to have been given on the date received by the Escrow Agent. In the
event that the Escrow Agent, in its sole discretion, shall determine that an
emergency exists, the Escrow Agent may use such other means of communication as
the Escrow Agent deems appropriate. "Business Day" shall mean any day other than
a Saturday, Sunday or any other day on which the Escrow Agent located at the
notice address set forth on Schedule 1 is authorized or required by law or
executive order to remain closed.

12. SECURITY PROCEDURES. In the event funds transfer instructions are given
(other than in writing at the time of execution of this Escrow Agreement, as
indicated in Schedule 1 attached hereto), whether in writing, by telecopier or
otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons designated on
schedule 2 hereto ("Schedule 2"), and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated. The
persons and telephone numbers for call-backs may be changed only in a writing
actually received and acknowledged by the Escrow Agent. If the Escrow Agent is
unable to contact any of the authorized representatives identified in Schedule
2, the Escrow Agent is hereby authorized to seek confirmation of such
instructions by telephone call-back to any one or more of your executive
officers, ("Executive Officers"), which shall include the titles of Chief
Financial Officer and Treasurer, as the Escrow Agent may select. Such "Executive
Officer" shall deliver to the Escrow Agent a fully executed Incumbency
Certificate, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be any such officer. The Escrow Agent and the beneficiary's bank
in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by the Purchaser or the Seller to identify (i) the
beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank. The
Escrow Agent may apply any of the escrowed funds for any payment order it
executes using any such identifying number, even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary's bank or an intermediary bank designated. The
parties to this Escrow Agreement acknowledge that these security procedures are
commercially reasonable.

13. MISCELLANEOUS. The provisions of this Escrow Agreement may be waived,
altered, amended or supplemented, in whole or in part, only by a writing signed
by all of the parties hereto. Neither this Escrow Agreement nor any right or
interest hereunder may be assigned in whole or in part by any party, except as
provided in Section 6, without the prior consent of the other parties. This
Escrow Agreement shall be governed by and construed under the laws of the State
of New York. Each party hereto irrevocably waives any objection on the grounds
of venue, forum non-conveniens or any similar grounds and irrevocably consents
to service of process by mail or in any other manner permitted by applicable law
and consents to the jurisdiction of the courts located in the State of New York.
The parties further hereby waive any right to a trial by jury with respect to
any lawsuit or judicial proceeding arising or relating to this Escrow Agreement.
No party to this Escrow Agreement is liable to any other party for losses due
to, or if it is unable to perform its obligations under the terms of this Escrow
Agreement because of, acts of God, fire, floods, strikes, equipment or
transmission failure, or other causes reasonably beyond its control. This Escrow
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.



<PAGE>



IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
the date set forth in Schedule 1.


                                JPMORGAN TRUST COMPANY, N.A.
                                AS ESCROW AGENT

                                By:  /s/ Jo Anne Osborne
                                   -------------------------------



                                ISSUER

                                By:  /s/ Martin P. Gilmore
                                   -------------------------------
                                   Martin P. Gilmore, President



This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.



<PAGE>



                                   SCHEDULE 1


EFFECTIVE DATE:

NAME OF ISSUER:  LightFirst Inc.
ISSUER NOTICE ADDRESS: P. O. Box 59481, Schaumburg, IL 60159
ISSUER OVERNIGHT DELIVERY ADDRESS: 25 Northwest Point, Suite 700,
                                   Elk Grove Village, IL 60007

ISSUER FACSIMILE NUMBER: (847) 640-1818
ISSUER TIN: 36-443-7640
WIRING INSTRUCTIONS:

ESCROW ACCOUNT NAME:       JPMorgan Chase Trust

MINIMUM SUBSCRIPTION AMOUNT: $12,000,000
MAXIMUM SUBSCRIPTION AMOUNT: $20,000,000


INVESTMENT:                         [specify]

         [x]      JPMorgan Chase Bank Money Market Account;

         [ ]      A trust account with JPMorgan Chase Bank;

         [ ]      A money market mutual fund, including without limitation the
                  JPMorgan Funds or any other mutual fund for which the Escrow
                  Agent or any affiliate of the Escrow Agent serves as
                  investment manager, administrator, shareholder servicing agent
                  and/or custodian or subcustodian, notwithstanding that (i) the
                  Escrow Agent or an affiliate of the Escrow Agent receives fees
                  from such funds for services rendered, (ii) the Escrow Agent
                  charges and collects fees for services rendered pursuant to
                  this Escrow Agreement, which fees are separate from the fees
                  received from such funds, and (iii) services performed for
                  such funds and pursuant to this Escrow Agreement may at times
                  duplicate those provided to such funds by the Escrow Agent or
                  its affiliates. Fund

         [ ]      Such other investments as Issuer and Escrow Agent may from
                  time to time mutually agree upon in a writing executed and
                  delivered by the Issuer accepted by the Escrow Agent.


This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.


<PAGE>



ESCROW AGENT NOTICE ADDRESS:        JoAnne Osborn
                                    Vice President
                                    JPMorgan Trust Company, N.A.
                                    Institutional Trust Services
                                    One Oxford Centre
                                    301 Grant Street, St. 1100
                                    Pittsburgh, PA 15219
                                    Phone No.:412-291-2027
                                    Fax No.: 412-291-2070



ESCROW AGENT'S COMPENSATION:




This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.



<PAGE>




                                   SCHEDULE 2



                     TELEPHONE NUMBER(s) FOR CALL-BACKS AND
           PERSON(s) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS

If to Issuer:

<Table>
<Caption>
         Name                                                 Telephone Number
         ----                                                 ----------------
<S>                                                           <C>
1.   Martin P. Gilmore                                        (847) 640-8880

2.   Angele R. Kuenster                                       (847) 640-8880
</Table>




This document contains information that is confidential and the property of
JPMorgan Chase Bank. It may not be copied, published or used, in whole or in
part, for any purpose other than as expressly authorized by JPMorgan Chase Bank.
(C) JPMorgan Chase Bank 2001. All Rights Reserved.