RESTRICTED ACCOUNT AGREEMENT

Exhibit 10.10

RESTRICTED ACCOUNT AGREEMENT

This Restricted Account Agreement (as amended, restated or supplemented from time to

time, this “Agreement”) is entered into this 28^thday of September, 2007, by and among NORTH

FORK BANK, a New York banking corporation with offices at 000 Xxxxxxxxxxx Xxxx,

Xxxxxxxx, Xxx Xxxx 00000 (together with its successors and assigns, the “Bank”), ELEC

COMMUNICATIONS CORP., a New York corporation with offices at 00 Xxxxx Xxxxxxxx

Xxxxx 000, Xxxxx Xxxxxx, Xxx Xxxx 00000 (together with its successors and assigns, the

“Company”), and LV ADMINISTRATIVE SERVICES, INC., a Delaware corporation (together

with its successors and assigns, the “Agent”).

WHEREAS, the Company, the Agent, Calliope Capital Corporation (“Calliope”), Valens

Offshore SPV II, Corp. (“Valens”) and certain other purchasers (together with Calliope and

Valens, collectively, the “Purchasers”) are party to a Securities Purchase Agreement (as

amended, modified or supplemented from time to time, the “Purchase Agreement”) pursuant to

which the Purchasers have provided financing to the Company. Unless otherwise defined herein,

capitalized terms used herein shall have the meaning provided such terms in the Purchase

Agreement;

WHEREAS, the Company and the Agent have retained the Bank to provide certain

services with respect to the Restricted Account (as defined below); and

WHERERAS, the Company and the Creditor Parties have agreed that an amount of cash

equal to $2,664468.28 shall be deposited by the Agent on behalf of the Company by wire

transfer of immediately available funds into the Restricted Account, which cash shall be held by

the Bank for the benefit of the Creditor Parties, as security for the Company’s obligations under

the Purchase Agreement and the Related Agreements. For the purposes of this Agreement, the

“Restricted Account” shall mean that certain deposit account (as defined in Section 9-102 of the

Uniform Commercial Code as in effect in the State of New York on the date hereof) described

on Exhibit B hereto, which Restricted Account shall be maintained at the Bank and shall be in

the sole dominion and control of the Agent;

NOW THEREFORE, in consideration of the mutual promises contained herein and for

other good and valuable consideration the sufficiency of which is hereby acknowledged, the

parties hereto agree as follows:

1. The Bank is hereby authorized to accept for deposit into the Restricted Account

the sum of $2,664468.28. The Bank hereby agrees to hold any and all monies, and other

amounts from time to time on deposit and/or held in the Restricted Account for the benefit of the

Creditor Parties and shall not release any monies held in the Restricted Account until such time

as the Bank shall have received a notice from the Agent substantially in the form attached hereto

as Exhibit A (a “Release Notice”). Following the receipt of a Release Notice from the Agent, the

Bank agrees to promptly disburse the amount of cash referred to in such Release Notice to such

account as the Agent shall determine in its sole discretion. The Bank hereby agrees that it will

only comply with written instructions originated by the Agent directing disposition of funds in

the Restricted Account. The Company hereby irrevocably authorizes the Bank to comply with

any and all instructions given to the Bank by the Agent with respect to the Restricted Account

without further consent by the Company. The Bank, the Company and the Agent agree that the

Restricted Account is in the Agent’s sole dominion and control, for the benefit of the Creditor

Parties.

2. Each of the Company, the Agent and the Bank hereby agrees that the Restricted

Account shall not be closed, and the account name and account number in respect thereof shall

not be changed, in any case, without the consent of the Agent, except as specifically provided for

in Section 9 below.

3. The Bank hereby subordinates any claims and security interests it may have

against, or with respect to, the Restricted Account (including any amounts from time to time on

deposit therein) to the security interests of Agent therein, and agrees that no amounts shall be

charged by it to, or withheld or set-off or otherwise recouped by it from, the Restricted Account

or any amounts from time to time on deposit therein; provided that, in connection with all service

charges and any other charges which the Bank is entitled to receive in connection with the

servicing and maintaining of the Restricted Account (such charges, collectively, the “Charges”),

each of the Company, the Agent and the Bank hereby agrees that the Bank will collect such

Charges in the following manner: (i) first, the Bank will charge other deposit accounts

maintained by the Company with the Bank, (ii) second, in the event that there are insufficient

collected funds in such other deposit accounts to pay such Charges, the Bank will promptly

notify the Company and the Agent with respect to same and, within seven (7) business days of

the Company’s receipt of such notice, the Company shall pay to the Bank the full amount of such

Charges then due, and (iii) third, if the Company fails to pay to the Bank such Charges then due

within the time period set forth in the preceding clause (ii), the Bank will promptly provide a

written notice to the Agent of such occurrence and, in such case, the Bank is hereby authorized,

following a period of five (5) business days after the receipt of such written notice by the Agent,

to deduct such Charges then due from the Restricted Account, unless, during such five (5)

business day period, the Agent pays the amount of any such Charges then due to the Bank from

its own account. Except for the payment of the Charges as set forth in the immediately

preceding proviso, the Bank agrees that it shall not offset, deduct or claim against the Restricted

Account unless and until the Agent has notified the Bank in writing that all of the Company’s

obligations under the Purchase Agreement and the Related Agreements have been performed.

4. The Company and the Bank agree that the maintenance by the Bank of the

Restricted Account shall be as agent for the Creditor Parties. The Bank shall be responsible for

the performance of only such duties as are set forth herein. The Bank’s duties hereunder,

however, are merely ministerial, and the Bank shall have no liability or obligation to the

Company or any Creditor Party or to any other person for any act or omission of the Bank in

connection with the performance of the Bank’s duties in servicing and/or maintaining the

Restricted Account, except for acts of gross negligence or willful misconduct by Bank. IN NO

EVENT, HOWEVER, SHALL THE BANK HAVE ANY RESPONSIBILITY FOR

CONSEQUENTIAL, INDIRECT, SPECIAL OR EXEMPLARY DAMAGES OR LOST

PROFITS, WHETHER OR NOT IT HAS NOTICE THEREOF, AND REGARDLESS OF THE

BASIS, THEORY OR NATURE OF THE ACTION UPON WHICH THE CLAIM IS

ASSERTED, NOR SHALL IT HAVE ANY RESPONSIBILITY OR LIABILITY FOR THE

VALIDITY OR ENFORCEABILITY OF ANY SECURITY INTEREST OR OTHER

INTEREST OF THE AGENT OR THE COMPANY IN THE RESTRICTED ACCOUNT. In

furtherance of and without limiting the foregoing, the Company and the Agent agree that the

Bank shall not be liable for any damage or loss to them for any delay or failure of performance

arising out of the acts or omissions of any third parties, including, but not limited to, various

communication services, courier services, the Federal Reserve system, any other bank or any

third party who may be affected by funds transactions, fire, mechanical, computer or electrical

failures or other unforeseen contingencies, strikes or any similar or dissimilar cause beyond the

reasonable control of the Bank. This paragraph shall survive the termination of this Agreement.

5. Except where the Bank has been grossly negligent or has acted in bad faith, each

of the Agent and the Company and their respective successors and assigns will release the Bank

from and shall indemnify and hold the Bank harmless from and against any and all losses,

claims, damages, liabilities, costs and expenses (including, without limitation, reasonable

counsel fees, whether arising in an action or proceeding among the parties hereto or otherwise,

without regard to the merit or lack of merit thereof) to which the Bank may become subject, or

which it may suffer or incur, arising out of or based upon this Agreement or the actions

contemplated hereby. This paragraph shall survive termination of this Agreement.

6. The Bank shall be fully protected in acting on any order or direction by the Agent

respecting the items received by the Bank or the monies or other items in the Restricted Account

without making any independent inquiry whatsoever as to the Agent’s rights or authority to give

such order or direction or as to the application of any payments made pursuant thereto.

7. Nothing in this Agreement shall be deemed to prohibit the Bank from complying

with its customary procedures in the event that it is served with any legal process with respect to

the Restricted Account.

8. The rights and powers granted in this Agreement to the Agent have been granted

in order to protect and further perfect its security interests in the Restricted Account (including

any amounts from time to time on deposit therein) and are powers coupled with an interest and

will be affected neither by any purported revocation by the Company of this Agreement or the

rights granted to the Agent hereunder or by the bankruptcy, insolvency, conservatorship or

receivership of the Company or the Bank or by the lapse of time.

9. This Agreement may not be amended or waived except by an instrument in

writing signed by each of the parties hereto. This Agreement may be terminated by the Bank

upon giving the Company and the Agent thirty (30) days prior written notice. The Agent shall

designate a successor bank on or prior to the effective date of such termination and the Bank

shall deliver the balance in the Restricted Account to such successor bank. Any notice required

to be given hereunder may be given, and shall be deemed given when delivered, via telefax, U.S.

mail return receipt requested or nationally recognized overnight courier to each of the parties at

the address set forth above. This Agreement may be executed in any number of counterparts,

each of which shall be an original and all of which, when taken together, shall constitute one

agreement. Delivery of an executed signature page of this Agreement by facsimile transmission

shall be effective as delivery of a manually executed counterpart hereof or thereof, as the case

may be. This Agreement shall be governed by, and construed in accordance with, the laws of the

State of New York, without regard to its conflict of laws principles. This Agreement sets forth

the entire agreement between the parties hereto as to the matters set forth herein and supersede

all prior communications, written or oral, with respect to the matters herein. EACH OF THE

PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT

TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR

CONTEMPLATED BY THIS AGREEMENT. THE BANK, THE COMPANY AND THE

AGENT EACH HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE

FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE COUNTY OF NEW

YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR

ANY MATTERS CONTEMPLATED HEREBY OR THEREBY.

* * * *

Agreed and accepted this 28^th day of September, 2007.

NORTH FORK BANK

By: /s/ North Fork Bank_________ ____

Name:

Title:

LV ADMINISTRATIVE SERVICES, INC.,

as Agent

By: /s/ Xxx Regan___________________

Name: Xxx Xxxxx

Title: Senior Managing Director

ELEC COMMUNICATIONS CORP.

By: /s/ Xxxx X. Xxxx

Name: Xxxx X. Xxxx

Title: Chief Executive Officer

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RESTRICTED ACCOUNT AGREEMENT

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