Document:

duane_ex103.htm

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

c/o 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	 
	 	 	 	 

 

 

 8duane_ex104.htm

EXHIBIT 10.4

 

LOCK-UP AGREEMENT

 

This LOCK-UP AGREEMENT (this “Agreement”) is made as of January 28, 2014, by and between the undersigned person or entity (the “Restricted Holder”) and Duane Street Corp., a Delaware corporation (the “Company”).  Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Contribution Agreement (as defined herein).

 

WHEREAS, pursuant to the transactions contemplated under that certain Contribution Agreement, dated as of January 28, 2014 (the “Contribution Agreement”), by and between the Company, Raditaz, LLC (“Raditaz”), a privately held Connecticut limited liability company, and the members of Raditaz, with the result of such Contribution being that Raditaz will become a wholly-owned subsidiary of the Company, with all of the members of Raditaz exchanging their LLC Membership Interests in Raditaz for shares of common stock of the Company (the “Common Stock”), all pursuant to the terms of the Contribution Agreement (the “Contribution”);

 

WHEREAS, the Restricted Holder will be an officer, director and/or key employee of the Company immediately after the closing of the Contribution and/or the Restricted Holder will be a beneficial owner of ten percent (10%) or more of the outstanding shares of Common Stock of the Company immediately after the closing of the Contribution;

 

WHEREAS, the Contribution Agreement provides that, among other things, all the shares of Common Stock owned by the Restricted Holder promptly after the closing of the Contribution (the “Restricted Securities”) shall be subject to certain restrictions on Disposition (as defined herein) during the period of twenty-four (24) months immediately following the closing date of the Contribution (the “Restricted Period”), all as more fully set forth herein.

 

NOW, THEREFORE, as an inducement to and in consideration of the Company’s agreement to enter into the Contribution Agreement and proceed with the Contribution, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1.            Lock Up Period.

 

(a)           During the Restricted Period, the Restricted Holder will not, directly or indirectly:  (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, make any short sale, lend or otherwise dispose of or transfer any Restricted Securities or any securities convertible into or exercisable or exchangeable for Restricted Securities, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any Restricted Securities (with the actions described in clause (i) or (ii) above being hereinafter referred to as a “Disposition”). The foregoing restrictions are expressly agreed to preclude the Restricted Holder from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of any of the Restricted Securities of the Restricted Holder during the Restricted Period, even if such securities would be disposed of by someone other than the Restricted Holder.

 

  

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(b)           In addition, during the period of twenty-four (24) months immediately following the closing date of the Contribution, the Restricted Holder will not, directly or indirectly, effect or agree to effect any short sale (as defined in Rule 200 under Regulation SHO of the Securities Exchange Act of 1934 (the “Exchange Act”)), whether or not against the box, establish any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, borrow or pre-borrow any shares of Common Stock, or grant any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, is convertible into or exercisable for or derives any significant part of its value from the Common Stock or otherwise seek to hedge the Restricted Holder’s position in the Common Stock.

 

(c)           Notwithstanding anything contained herein to the contrary, the Restricted Holder shall be permitted to engage in any Disposition (i) where the other party to such Disposition is another Restricted Holder, (ii) where such Disposition is in connection with estate planning purposes, including, without limitation to an inter-vivos trust, (iii) upon the written approval of the lead underwriter in any underwritten public offering of Company securities, (iv) where such Disposition is to an affiliate of such Restricted Holder (including entities wholly owned by such Restricted Holder or one or more trusts where such Restricted Holder is the grantor of such trust(s)) as long as such affiliate executes a copy of this Agreement, (v) where the Restricted Holder is an entity and such Disposition is to that entity’s shareholders, members, or other persons or entities that comprise the Restricted Holder’s ownership structure; or (vi) where the Restricted Holder is an employee of the Company, upon a change of control following which the Restricted Holder’s employment with the Company is terminated. For purposes of the foregoing, a change of control shall mean:

 

(1)           Any sale, lease, exchange or other transfer (in one or a series of related transactions) of all or substantially all of the assets of the Company to a non-affiliate;

 

(2)           Any “person”, (excluding Tom Brophy and affiliated “persons”) as such term is used in Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes, directly or indirectly, the “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of securities of the Company that represent more than 50% of the combined voting power of the Company’s then outstanding voting securities (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of Section 1(c)(vi), the following acquisitions shall not constitute a Change in Control:  (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, (IV) any acquisition by any corporation pursuant to a transaction that complies with Sections 1(c)(vi)(3)(A) and 1(c)(vi)(3)(B), (V) any acquisition involving beneficial ownership of less than a majority of the then-outstanding Common Shares (the “Outstanding Company Common Shares”) or the Outstanding Company Voting Securities that is determined by the Board, based on review of public disclosure by the acquiring Person with respect to its passive investment intent, not to have a purpose or effect of changing or influencing the control of the Company; provided, however, that for purposes of this clause (V), any such acquisition in connection with (x) an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents or (y) any “Business Combination” (as defined below) shall be presumed to be for the purpose or with the effect of changing or influencing the control of the Company;

 

(3)           The Board or the shareholders of the Company approve and consummate a merger, amalgamation or consolidation (a “Business Combination”) of the Company with any other corporation, unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Shares and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and (B) the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries);

 

  

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(d)           Notwithstanding anything contained herein to the contrary, the restrictions contained in this Agreement shall not apply to any shares of Common Stock acquired by Restricted Holder in the Private Placement Offering or in the open market.

 

2.            Legends; Stop Transfer Instructions.

 

(a)           In addition to any legends to reflect applicable transfer restrictions under federal or state securities laws, each stock certificate representing Restricted Securities shall be stamped or otherwise imprinted with the following legend:

 

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK-UP AGREEMENT, DATED AS OF JANUARY 28, 2014, BETWEEN THE HOLDER HEREOF AND THE ISSUER AND MAY ONLY BE SOLD OR TRANSFERRED IN ACCORDANCE WITH THE TERMS THEREOF.”

 

(b)           The Restricted Holder hereby agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Restricted Securities or securities convertible into or exchangeable for Restricted Securities held by the Restricted Holder except in compliance with this Agreement.

 

3.           Miscellaneous.

 

(a)           Specific Performance.  The Restricted Holder agrees that in the event of any breach or threatened breach by the Restricted Holder of any covenant, obligation or other provision contained in this Agreement, then the Company shall be entitled (in addition to any other remedy that may be available to the Company) to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach.  The Restricted Holder further agrees that neither the Company nor any other person or entity shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3, and the Restricted Holder irrevocably waives any right that he, she, or it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

(b)           Other Agreements.  Nothing in this Agreement shall limit any of the rights or remedies of the Company under the Contribution Agreement, or any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under any other agreement between the Restricted Holder and the Company or any certificate or instrument executed by the Restricted Holder in favor of the Company; and nothing in the Contribution Agreement or in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under this Agreement.

 

(c)           Notices.  All notices, requests, demands, claims, and other communications hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

 

  

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If to the Company:

 

Duane Street Corp.

2217 New London Turnpike

South Glastonbury, CT  06073

Attn:  Tom Brophy, President

	  	
Copy to (which copy shall not constitute notice hereunder):

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas, 11th Fl

New York, NY 10017

Attn:  Barry I. Grossman, Esq.

 

Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended.  Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

(d)           Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

 

(e)           Applicable Law; Jurisdiction.  THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.  In any action between or among any of the parties arising out of this Agreement, (i) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts having jurisdiction over New York County, New York; (ii) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court having jurisdiction over New York County, New York; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepared, to the address at which such party is to receive notice in accordance with this Agreement.

 

(f)           Waiver; Termination.  No failure on the part of the Company to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of the Company in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.  The Company shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of the Company; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.  If the Contribution Agreement is terminated, this Agreement shall thereupon terminate.

 

(g)           Captions.  The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

 

  

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(h)           Further Assurances.  The Restricted Holder hereby represents and warrants that the Restricted Holder has the legal capacity to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the Restricted Holder, enforceable in accordance with its terms.  The Restricted Holder shall execute and/or cause to be delivered to the Company such instruments and other documents and shall take such other actions as the Company may reasonably request to effectuate the intent and purposes of this Agreement.

 

(i)           Entire Agreement.  This Agreement and the Contribution Agreement collectively set forth the entire understanding of the Company and the Restricted Holder relating to the subject matter hereof and supersedes all other prior agreements and understandings between the Company and the Restricted Holder relating to the subject matter hereof.

 

(j)           Non-Exclusivity.  The rights and remedies of the Company hereunder are not exclusive of or limited by any other rights or remedies which the Company may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative).

 

(k)           Amendments.  This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Company and the Restricted Holder.

 

(l)           Assignment.  This Agreement and all obligations of the Restricted Holder hereunder are personal to the Restricted Holder and may not be transferred or delegated by the Restricted Holder at any time.  The Company may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity without obtaining the consent or approval of the Restricted Holder.

 

(m)          Binding Nature.  Subject to Section 3(l) above, this Agreement will inure to the benefit of the Company and its successors and assigns and will be binding upon the Restricted Holder and the Restricted Holder’s representatives, executors, administrators, estate, heirs, successors and assigns.

 

(n)           Survival.  Each of the representations, warranties, covenants and obligations contained in this Agreement shall survive the consummation of the Contribution.

 

(o)           Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be deemed an original and both of which shall constitute one and the same instrument.

 

[signature page follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first set forth above.

 

	 	DUANE STREET CORP.	 
	 	 	 	 
	 	 	 	 
	 	By:	Peretz Yehudah Aisenstark	 
	 	Its:	President	 
	 	 	 	 
	 	
RESTRICTED HOLDER:

	 
	 	 	 	 
	 	
[                                ]

	 
	 	By:	 	 
	 	Its:	 	 

 

	 	Address:	 	 
	 	 	 

 

 

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