AMENDMENT NO. 1 TO STOCK ESCROW AGREEMENT
AMENDMENT
NO. 1 TO
This
AMENDMENT NO. 1 TO STOCK ESCROW AGREEMENT (this “Amendment No. 1”) is
entered into as of _________ __, 2010 by and among GSME ACQUISITION
PARTNERS I (the “Company”), MCK CAPITAL CO., LIMITED, XXX X. XXXXX and XXXXXXXX
X. XXXXX (collectively the “Initial Shareholders”), XXXXX & COMPANY
SECURITIES, LLC (“Xxxxx & Company”) and CONTINENTAL STOCK TRANSFER &
TRUST COMPANY (the “Escrow Agent”). Capitalized terms not otherwise
defined herein shall have the meaning given to such terms in the Escrow
Agreement (as defined below).
WHEREAS,
the Company, the Initial Shareholders and the Escrow Agent entered into that
certain Stock Escrow Agreement dated as of November 19, 2009 (the “Escrow
Agreement”) providing for the Escrow Agent to hold the Escrow Shares in escrow
and disburse them as provided for in the Escrow Agreement;
WHEREAS,
the Company has entered into an Amended and Restated Agreement and Plan of
Reorganization, as amended (the “Merger Agreement”), with GSME Acquisition
Partners I Sub Limited, Plastec International Holdings Limited (“Plastec”), Sun
Yip Industrial Company Limited (BVI), Tiger Power Industries Limited (BVI),
Expert Rank Limited (BVI), Fine Colour Limited (BVI), Cathay Plastic Limited
(BVI), Greatest Sino Holdings Limited (BVI), Colourful Asia International
Limited (BVI) and Top Universe Management Limited (BVI) pursuant to which
Plastec will become a wholly-owned subsidiary of the Company;
WHEREAS,
the Initial Shareholders have agreed to place additional restrictions on the
release of the Escrow Shares from escrow in connection with the consummation of
the transactions contemplated by the Merger Agreement;
WHEREAS,
the Initial Shareholders hold an aggregate of 3,600,000 warrants of GSME and
have agreed to deposit [______]1 warrants of GSME
(“Insider Warrants”) in escrow as hereinafter provided and as set forth opposite
their respective names in Schedule 1 attached
hereto;
WHEREAS,
the parties wish to amend certain terms and provisions of the Escrow Agreement
in order to effectuate the foregoing; and
1 The number of insider warrants to be held in escrow will be equal to
the product of (a) 3,600,000 multiplied by a fraction, the numerator of which is
the number of insider warrants held by each Initial Shareholder, and the
denominator of which is the total number of insider warrants, multiplied by (b)
a fraction, the numerator of which is the Target Amount (defined below), and the
denominator of which is $30,000,000.
WHEREAS,
pursuant to Section 6.2 of the Escrow Agreement, such agreement may not be
modified or changed without the consent of Xxxxx & Company.
NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1.
Section 2 is hereby
deleted in its entirety and replaced with the following:
“2.
Deposit of Escrow Shares and
Insider Warrants. Each of the Initial Shareholders has delivered to
the Escrow Agent certificates representing his respective Escrow Shares and
Insider Warrants, to be held and disbursed subject to the terms and conditions
of this Agreement.”
2.
Section 3 is
hereby deleted in its entirety and replaced with the following:
“3.
Disbursement of the Escrow
Shares and Insider Warrants.
3.1 The
Escrow Agent shall hold the Escrow Shares as follows (collectively, the “Escrow
Period”): (i) with respect to 20% of the Escrow Shares, until the consummation
of the Company’s Business Combination (as such term is defined in the
Registration Statement), (ii) with respect to 20% of the Escrow Shares, until
the closing price of the Ordinary Shares exceeds $12.00 for any 20 trading days
within a 30-trading day period following the consummation of a Business
Combination, (iii) with respect to 20% of the Escrow Shares, until the closing
price of the Ordinary Shares exceeds $14.00 for any 20 trading days within a
30-trading day period following the consummation of a Business Combination, (iv)
with respect to 20% of the Escrow Shares, until the closing price of the
Ordinary Shares exceeds $16.00 for any 20 trading days within a 30-trading day
period following the consummation of a Business Combination and (v) with respect
to 20% of the Escrow Shares, until the closing price of the Ordinary Shares
exceeds $20.00 for any 20 trading days within a 30-trading day period following
the consummation of a Business Combination.
3.2 The
Initial Shareholders also agree that if the Company’s trust fund established in
connection with the Company’s initial public offering (“Trust Fund”) contains
less than $30,000,000 after taking into account all payments to the Company’s
shareholders who elect to have their shares converted to cash in accordance with
the provisions of the Company’s charter documents and any disbursements made
pursuant to Section 6.18 of the Merger Agreement (collectively, the “Permitted
Payments”), as applied to each Initial Shareholder, a number of Escrow Shares
held for the benefit of such Initial Shareholder determined by multiplying (a)
the product of 1,200,000, multiplied by a fraction, the numerator of which is
the number of Escrow Shares held by such Initial Shareholder, and the
denominator of which is the total number of Escrow Shares held by all of the
Initial Shareholders, by (b) a fraction, the numerator of which is the
difference between $30,000,000 and the amount held in the Trust Fund at the
closing of the Business Combination after taking into account all Permitted
Payments (the “Target Amount”), and the denominator of which is $30,000,000,
will be subject to the following additional restrictions which shall apply
notwithstanding the price target requirements referred to in Section 3.1 above
being satisfied (the Escrow Shares that are subject to such additional
restrictions are hereinafter referred to as “Financing
Shares”):
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(a) If
the Company does not raise any portion of the Target Amount on or before
December __, 2011 [12 months
from the date hereof] (the “Required Financing Date”) in any equity
financing approved in accordance with Section 6.27 of the Merger Agreement
(which, for the avoidance of doubt, shall exclude any proceeds from exercises of
the Company’s outstanding warrants) (an “Equity Financing”), all of the
Financing Shares will be repurchased and cancelled by the Company, at an
aggregate cost to the Company of no more than $0.01, at the close of business on
the Required Financing Date, even if the price targets referred to in Section
3.1 have been satisfied.
(b) If
the Company raises the full Target Amount in an Equity Financing on or before
the Required Financing Date, all of the Financing Shares will be free of the
additional restriction set forth in Section 3.2(a) and will continue to be held
in escrow until the applicable requirements of Section 3.1 above have been met
(or if already met, released to the Initial Shareholders ratably in accordance
with Section 3.5 below, but in no event earlier than the date the Equity
Financing mentioned above is consummated).
(c) If,
in any Equity Financing on or before the Required Financing Date, the
Company raises only a portion of the Target Amount, a number of Financing Shares
determined by multiplying (i) the total number of Financing Shares placed in
escrow on the date hereof by (ii) a fraction, the numerator of which is the
dollar amount of the Target Amount raised in such Equity Financing and the
denominator of which is the Target Amount, will be free of the additional
restriction set forth in Section 3.2(a) and will continue to be held in escrow
until the applicable requirements of Section 3.1 above have been met (or if
already met, released to the Initial Shareholders ratably in accordance with
Section 3.5 below, but in no event earlier than the date such Equity Financing
is consummated) and any Financing Shares that remain as of the close of business
on the Required Financing Date will be repurchased and cancelled by the Company
as provided in Section 3.2(a) above.
(d) Any
Financing Shares required to be repurchased and cancelled pursuant to this
Section 3.2 shall be satisfied in descending order first by the shares referred
to in Section 3.1(v) above, failing which then Section 3.1(iv) above, failing
which then Section 3.1(iii) above, failing which then Section 3.1(ii) above and
failing which finally Section 3.1(i) above.
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3.3 The
Initial Shareholders agree that the Insider Warrants held in escrow pursuant to
this Agreement will be subject to the following restrictions:
(a) If
the Company does not raise any portion of the Target Amount in an Equity
Financing on or before the Required Financing Date, all of the Insider Warrants
will be repurchased and cancelled by the Company, at an aggregate cost to the
Company of no more than $0.01, at the close of business on the Required
Financing Date.
(b) If
the Company raises the full Target Amount in an Equity Financing on or before
the Required Financing Date, all of the Insider Warrants will be free of the
restriction set forth in Section 3.3(a) and will be released to the Initial
Shareholders ratably in accordance with Section 3.5 below, but in no event
earlier than the date the Equity Financing mentioned above is
consummated.
(c) If,
in any Equity Financing on or before the Required Financing Date, the
Company raises only a portion of the Target Amount, a number of Insider Warrants
determined by multiplying (i) the total number of Insider Warrants placed in
escrow on the date hereof by (ii) a fraction, the numerator of which is the
dollar amount of the Target Amount raised in such Equity Financing and the
denominator of which is the Target Amount, will be free of the restriction set
forth in Section 3.3(a) and will be released to the Initial Shareholders
ratably in accordance with Section 3.5 below, but in no event earlier than the
date such Equity Financing is consummated) and any Insider Warrants that
remain as of the close of business on the Required Financing Date will be
repurchased and cancelled by the Company as provided in Section 3.3(a)
above.
3.4 If,
after the Company consummates its Business Combination, the Company (or the
surviving entity) subsequently consummates a liquidation, merger, stock exchange
or other similar transaction which results in all of the shareholders of such
entity having the right to exchange their Ordinary Shares for cash, securities
or other property, then the Escrow Agent will, upon receipt of a notice executed
by the Chairman of the Board, President or other authorized officer of the
Company, in form reasonably acceptable to the Escrow Agent, certifying that such
transaction is then being consummated, release the Escrow Shares and Insider
Warrants to the Initial Shareholders.
3.5 On
each date that Escrow Shares or Insider Warrants, as applicable, are to be
released, upon written instructions from the Company and each Initial
Shareholder, the Escrow Agent shall disburse such amount of each Initial
Shareholder’s Escrow Shares (and any applicable stock power) and Insider
Warrants, as applicable, to such Initial Shareholder.
3.6 The
Escrow Agent shall have no further duties hereunder after the disbursement or
destruction of the Escrow Shares and Insider Warrants in accordance with this
Section 3.”
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3.
Section 5.2 is
hereby deleted in its entirety and replaced with the following:
“5.2 Indemnification.
The Escrow Agent shall be indemnified and held harmless by the Company from and
against any expenses, including counsel fees and disbursements, or loss suffered
by the Escrow Agent in connection with any action, suit or other proceeding
involving any claim which in any way, directly or indirectly, arises out of or
relates to this Agreement, the services of the Escrow Agent hereunder, or the
Escrow Shares and Insider Warrants held by it hereunder, other than expenses or
losses arising from the gross negligence or willful misconduct of the Escrow
Agent. Promptly after the receipt by the Escrow Agent of notice of any
demand or claim or the commencement of any action, suit or proceeding, the
Escrow Agent shall notify the other parties hereto in writing. In the
event of the receipt of such notice, the Escrow Agent, in its sole discretion,
may commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the Escrow Shares or Insider Warrants or
it may deposit the Escrow Shares or Insider Warrants with the clerk of any
appropriate court or it may retain the Escrow Shares or Insider Warrants pending
receipt of a final, non appealable order of a court having jurisdiction over all
of the parties hereto directing to whom and under what circumstances the Escrow
Shares or Insider Warrants are to be disbursed and delivered. The
provisions of this Section 5.2 shall survive in the event the Escrow Agent
resigns or is discharged pursuant to Sections 5.5 or 5.6 below.”
4.
Section 5.5 is hereby deleted in its
entirety and replaced with the following:
“5.5 Resignation.
The Escrow Agent may resign at any time and be discharged from its duties as
escrow agent hereunder by its giving the other parties hereto written notice and
such resignation shall become effective as hereinafter provided. Such
resignation shall become effective at such time that the Escrow Agent shall turn
over to a successor escrow agent appointed by the Company, the Escrow Shares
and/or Insider Warrants held hereunder. If no new escrow agent is so
appointed within the 60 day period following the giving of such notice of
resignation, the Escrow Agent may deposit the Escrow Shares and/or Insider
Warrants with any court it reasonably deems appropriate.”
5.
Section 6.7 is
hereby deleted in its entirety.
6.
Except as specifically provided in this Amendment No. 1, no
provision of the Escrow Agreement is modified, changed, waived, discharged or
otherwise terminated and the Escrow Agreement shall continue to be in full force
and effect. This Amendment No. 1 constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof. This Amendment No.
1 may be executed and delivered (including by facsimile) in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
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Intentionally]
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IN WITNESS WHEREOF, this Amendment No.
1 has been duly executed and delivered by the duly authorized officers of the
parties as of the date first written above.
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By:
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Name:
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Title:
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INITIAL
SHAREHOLDERS:
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MCK
Capital Co., Limited
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By:
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Xxxx
Xxxx Gao
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Xxx
X. Xxxxx
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Xxxxxxxx
X. Xxxxx
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CONTINENTAL
STOCK TRANSFER
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&
TRUST COMPANY
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By:
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Name:
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Title:
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XXXXX
& COMPANY SECURITIES, LLC
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By:
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Name:
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Title:
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