Exhibit 10.21
FUNDS ESCROW AGREEMENT
This Agreement is dated as of the 25th day of August, 2005 among each of the
parties listed on Schedule A hereto (each a "Company", and collectively the
"Companies"), Laurus Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP
(the "Escrow Agent"):
W I T N E S S E T H:
WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Companies and
the Purchaser have entered into a Security Agreement (the "Security Agreement")
for the issuance by the Companies to the Purchaser of a secured convertible
minimum borrowing note (the "Minimum Borrowing Note") and a secured revolving
note (the "Revolving Note"), (b) IWT Tesoro Corporation ("IWT") has issued to
the Purchaser a common stock purchase warrant (the "MBN/Revolving Note Warrant")
in connection with the issuance of the Minimum Borrowing Note and the Revolving
Note, and (c) IWT and the Purchaser have entered into a Registration Rights
Agreement covering the registration of the IWT's common stock underlying the
Minimum Borrowing Note and the MBN/Revolving Note Warrant (the "MBN/Revolving
Note Registration Rights Agreement");
WHEREAS, the Companies and the Purchaser wish the Purchaser to deliver to the
Escrow Agent copies of the Documents (as hereafter defined) and the Escrowed
Payment (as hereafter defined) to be held and released by the Escrow Agent in
accordance with the terms and conditions of this Agreement; 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.
WHENEVER USED IN THIS AGREEMENT,
THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH BELOW.
(A)
"AGREEMENT" MEANS THIS AGREEMENT, AS
AMENDED, MODIFIED AND/OR SUPPLEMENTED FROM TIME TO TIME BY WRITTEN AGREEMENT
AMONG THE PARTIES HERETO.
(B)
"CLOSING PAYMENT" MEANS THE CLOSING PAYMENT
TO BE PAID TO LAURUS CAPITAL MANAGEMENT, L.L.C., THE FUND MANAGER, AS SET FORTH
ON SCHEDULE B HERETO.
(C)
"DISBURSEMENT LETTER" MEANS THAT CERTAIN
LETTER DELIVERED TO THE ESCROW AGENT BY EACH OF THE PURCHASER AND THE COMPANIES
SETTING FORTH WIRE INSTRUCTIONS AND AMOUNTS TO BE FUNDED AT THE CLOSING.
(D)
"DOCUMENTS" MEANS COPIES OF [THE
DISBURSEMENT LETTER,] THE SECURITY AGREEMENT, THE MINIMUM BORROWING NOTE, THE
REVOLVING NOTE, THE MBN/REVOLVING NOTE WARRANT, THE MBN/REVOLVING NOTE
REGISTRATION RIGHTS AGREEMENT, THE MASTER SECURITY AGREEMENT AND THE SUBSIDIARY
GUARANTY.
(E)
"ESCROWED PAYMENT" MEANS
$
.
(F)
"MASTER SECURITY AGREEMENT" MEANS THE
MASTER SECURITY AGREEMENT, DATED AS OF THE DATE HEREOF, AMONG THE COMPANIES, IWT
TESORO INTERNATIONAL LTD., IWT TESORO TRANSPORT, INC., THE TILE CLUB, INC.,
IMPORT FLOORING GROUP, INC. AND THE PURCHASER.
(G)
"SUBSIDIARY GUARANTY" MEANS THE SUBSIDIARY
GUARANTY, DATED AS OF THE DATE HEREOF, MADE BY IWT TESORO INTERNATIONAL LTD.,
IWT TESORO TRANSPORT, INC., THE TILE CLUB, INC. AND IMPORT FLOORING GROUP, INC.
IN FAVOR OF THE PURCHASER.
1.2.
ENTIRE AGREEMENT.
THIS AGREEMENT CONSTITUTES
THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS
CONTAINED HEREIN AND SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS,
NEGOTIATIONS AND DISCUSSIONS