ESCROW AGREEMENT
Exhibit 2
THIS ESCROW AGREEMENT (this “Agreement”) is made as of April 8, 2009, by and among
Spring Creek Acquisition Corp. (the “Company”), the parties signatory hereto (collectively,
the “Seller”), AutoChina Group, Inc. (“AutoChina”) and Loeb & Loeb LLP, a
California limited liability partnership, as escrow agent (the “Escrow Agent”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Option
Agreement (as defined below).
WITNESSETH:
WHEREAS, the Company was organized for the purpose of acquiring, through a stock exchange,
asset acquisition or other similar business combination, or controlling, through contractual
arrangements, an operating business, that has its principal operations in the Greater China region,
which includes Hong Kong, Macau and Taiwan;
WHEREAS, the Company has agreed to acquire (the “Acquisition”) AutoChina pursuant to certain
agreements.
WHEREAS, the Company, the Seller, and AutoChina are entering into a Put and Call Option
Agreement dated as of the date hereof (the “Option Agreement”) pursuant to which the Seller
will grant options to the Company to purchase, and the Company will grant options to the Seller to
buy, an aggregate of 548,800 ordinary shares of the Company (the “Shares”); and
WHEREAS, the Company, the Seller, and AutoChina have requested that the Escrow Agent hold
certain funds as provided in the Option Agreement (the “Escrowed Funds”) to secure the
payment of the Option Price pursuant to the Option Agreement until the Escrow Agent has received
confirmation that either the Put Options or Call Options have been exercised with respect to all
Shares subject to the Option Agreement or is instructed to release the Escrowed Funds to the Seller
as hereinafter provided.
NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and
other good and valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the
Escrow Agent shall hold the Escrowed Funds in a non-interest bearing account.
1.2. Upon the closing of the Acquisition, the Company shall deposit the Escrowed Funds
directly with the Escrow Agent in immediately available funds by federal wire
transfer. The Escrowed Funds shall remain the property of the Company shall not be subject to
any liens or charges by the Seller or the Escrow Agent or judgments or creditors’ claims against
the Seller, until released to the Seller as contemplated by the Option Agreement as hereinafter
provided. Escrow Agent will not use the information provided to it by the Company or the Seller
for any purpose other than to fulfill its obligations as Escrow Agent. The Company acknowledges
and agrees that the Seller may, from time to time, request that the Escrow Agent provide it with
written confirmation of the amount of Escrowed Funds held in escrow by the Escrow Agent. Wire
transfers to the Escrow Agent shall be made to a non-interest bearing account of the Escrow Agent
as follows:
Bank: | Citibank, N.A. | |||
Address: | 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 | |||
ABA No.: | 000000000 | |||
SWIFT: | CITI US 33 | |||
Account: | Loeb & Loeb LLP Escrow Account | |||
Account No.: | 00000000 | |||
Reference: | Spring Creek Acquisition Corp. (211819-10001) |
1.3. The Escrow Agent shall continue to hold the Escrowed Funds, subject to the terms hereof
and without the accrual of any interest thereon, until it receives instructions to release the
Escrowed Funds with respect to some or all of the shares as follows:
(a) Upon receipt of a notice from the Seller that the Call Option has been exercised and such
exercise has been closed in accordance with the Option Agreement, the Escrow Agent shall release
$8.400 of the Escrowed Funds to the Company for each Share covered by the relevant exercise notice;
(b) Upon the Company delivering to the Escrow Agent a Release Notice, in the form attached
hereto as Exhibit A (each, a “Release Notice”), the Escrow Agent shall release the Escrowed
Funds to the Seller in accordance with the Release Notice; or
(c) Within 5 business days of receiving (i) a copy of the written notice from the Seller to
the Company exercising the Put Option, (ii) an affidavit from an officer of the Seller that such
notice was delivered in a timely fashion to the Company, and (iii) a written notice from the
Company’s transfer agent or the Company that the applicable Shares have been tendered to the
transfer agent or the Company, the Escrow Agent shall release $8.400 of the Escrowed Funds to the
Company for each Share covered by the relevant exercise notice. In the event that such amounts are
not distributed to the Seller within 5 business days of the date such materials are received, the
Company shall pay to the Seller, in addition to the amounts owed under this Agreement, an amount
equal to 3% of the amount that remains undistributed pursuant to this Agreement per month, pro
rated on a daily basis.
(d) In the event that any amounts remain in escrow for which no Put Option or Call Option has
been exercised and for which no dispute exists by the end of the two week period commencing on the
six month anniversary of the closing of the Acquisition, then the Escrow Agent shall release any
amounts remaining in escrow to the Company.
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1.4. At any time upon the receipt of a written request executed by each of the Company, the
Seller and AutoChina to the Escrow Agent, the Escrow Agent shall promptly return the Escrowed Funds
to the Company pursuant to written wire instructions to be delivered by the Company to the Escrow
Agent.
1.5. Upon the exercise of the Put Option, a Seller shall deliver a notice of such exercise to
the Escrow Agent.
ARTICLE II
MISCELLANEOUS
2.1. No waiver or any breach of any covenant or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein
contained. No extension of time for performance of any obligation or act shall be deemed an
extension of the time for performance of any other obligation or act.
2.2. All notices or other communications required or permitted hereunder shall be in writing,
and shall be sent to the addresses set forth in the Option Agreement.
2.3. This Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and permitted assigns of the parties hereto.
2.4. This Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes all prior
understandings with respect thereto. This Escrow Agreement may not be modified, changed,
supplemented or terminated, nor may any obligations hereunder be waived, except by written
instrument signed by the parties to be charged or by its agent duly authorized in writing or as
otherwise expressly permitted herein.
2.5. Whenever required by the context of this Escrow Agreement, the singular shall include the
plural and masculine shall include the feminine. This Escrow Agreement shall not be construed as
if it had been prepared by one of the parties, but rather as if both parties had prepared the same.
Unless otherwise indicated, all references to Articles are to this Escrow Agreement.
2.6. The parties hereto expressly agree that this Escrow Agreement shall be governed by,
interpreted under and construed and enforced in accordance with the laws of the State of New York,
without regard to conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. Any action to enforce, arising out of, or relating in
any way to, any provisions of this Escrow Agreement shall only be brought in a state or Federal
court sitting in New York City, Borough of Manhattan.
2.7. The Escrow Agent’s duties hereunder may be altered, amended, modified or revoked only by
a writing signed by the Company, each Seller and the Escrow Agent.
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2.8. The Escrow Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine
and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be
personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith and in the absence of gross negligence, fraud or willful misconduct, and
any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent’s
attorneys-at-law shall be conclusive evidence of such good faith, in the absence of gross
negligence, fraud or willful misconduct.
2.9. The Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting to execute or deliver
the Option Agreement or any documents or papers deposited or called for thereunder in the absence
of gross negligence, fraud or willful misconduct. In no event shall the Escrow Agent be liable,
directly or indirectly, for any damages or expenses arising out of the services provided hereunder,
other than damages which result from the Escrow Agent’s gross
negligence or willful misconduct.
2.10. Escrow Agent may resign upon 30 days advance written notice to the other parties to this
Agreement. If a successor escrow agent is not appointed within the 30-day period following such
notice, Escrow Agent may petition any court of competent jurisdiction to name a successor escrow
agent or interplead the Escrowed Funds with such court, whereupon Escrow Agent’s duties hereunder
shall terminate.
2.11. If the Escrow Agent reasonably requires other or further instruments in connection with
this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
2.12. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the Escrowed Funds held by the Escrow Agent hereunder,
the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion (1) to retain in
the Escrow Agent’s possession without liability to anyone all or any part of said Escrowed Funds
until such disputes shall have been settled either by mutual written agreement of the parties
concerned by a final order, decree or judgment or a court of competent jurisdiction after the time
for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (2) to deliver the Escrowed Funds
and any other property held by the Escrow Agent hereunder to a state or Federal court having
competent subject matter jurisdiction and located in the City of New York, Borough of Manhattan, in
accordance with the applicable procedure therefor.
2.13. Each of the Company, the Seller and AutoChina agrees to indemnify and hold harmless the
Escrow Agent and its partners, employees, agents and representatives from any and all claims,
liabilities, costs or expenses in any way arising from or relating to the duties or performance of
the Escrow Agent hereunder or the transactions contemplated hereby or by the Option Agreement other
than any such claim, liability, cost or expense to the extent the same shall have been determined
by final, unappealable judgment of a court of competent jurisdiction to have resulted from the
gross negligence, fraud or willful misconduct of the Escrow Agent.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE TO ESCROW AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
SPRING CREEK ACQUISITION CORP. |
|||
By: | /s/ Xxxxx Sha | ||
Name: | Xxxxx Sha | ||
Title: | |||
AUTOCHINA GROUP, INC. |
|||
By: | /s/ Yong Xxx Xx | ||
Name: | Yong Xxx Xx | ||
Title: | President | ||
ESCROW AGENT: LOEB & LOEB LLP |
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By: | /s/ Xxxxxxxx X. Xxxxxxxx | ||
Name: | Xxxxxxxx X. Xxxxxxxx | ||
Title: | Partner | ||
[SELLERS’ SIGNATURE PAGE FOLLOWS]
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[SELLER’S SIGNATURE PAGE TO ESCROW AGREEMENT]
VICTORY PARK SPECIAL
SITUATIONS MASTER FUND, LTD. By: Victory Park Capital Advisors, LLC Its: Investment Manager |
||||||
By: | /s/ Xxxxx X. Xxxxxxx
|
|||||
Title: General Counsel | ||||||
VICTORY PARK CREDIT
OPPORTUNITIES MASTER FUND, LTD. By: Victory Park Capital Advisors, LLC Its: Investment Manager |
||||||
By: | /s/ Xxxxx X. Xxxxxxx
|
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Title: General Counsel |
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Exhibit A to
Escrow Agreement
Escrow Agreement
RELEASE NOTICE
The Company, pursuant to the Escrow Agreement dated as of April
_____, 2009 among the Company,
the Seller, AutoChina, the Shareholder and Loeb & Loeb LLP, as Escrow Agent (the “Escrow
Agreement”), hereby instructs the Escrow Agent to release $[ ] per Share with respect to
[ ] Shares (an aggregate of $[ ]) of the Funds to the account and in the amount
specified below:
• | $[ ] to Seller [_____], pursuant to the following wire transfer
instructions: |
||
[WIRE INSTRUCTIONS] |
The remainder of the Escrowed Funds shall be held by the Escrow Agent in accordance with the
terms of the Escrow Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has caused this Release Notice to be duly executed and
delivered as of this
_____
day of , 2009.
SPRING CREEK ACQUISITION CORP.
By: | |||
Name: | |||
Title: |
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Exhibit B to
Escrow Agreement
Escrow Agreement
RELEASE REQUEST
The undersigned Seller(s), pursuant to the Escrow Agreement dated as of April
_____, 2009 among
the Company, the Seller, AutoChina, the Shareholder and Loeb & Loeb LLP, as Escrow Agent (the
“Escrow Agreement”), hereby notifies the Escrow Agent that the Company has failed to close
on the shares pursuant to the attached exercise notice in accordance with the terms of the Option
Agreement, and instructs the Escrow Agent to notify the Company and each of the Seller of this
Release Request. In the event the Company does not object to this Release Request within 10
business days from the date the Escrow Agent provides notice hereof to the Company, the Escrow
Agent is hereby instructed to release $[_____] per Share with respect to [_____] Shares (an
aggregate of $[_____]) of the Escrowed Funds to the account and in the amount specified below:
• | $[_____] to Seller [_____], pursuant to the following wire transfer
instructions: |
||
[WIRE INSTRUCTIONS] |
The remainder of the Escrowed Funds shall be held by the Escrow Agent in accordance with the
terms of the Escrow Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has caused this Release Notice to be duly executed and
delivered as of this
_____
day of
_____, 2009.
[SELLER] |
|||
By: | |||
Name: | |||
Title: | |||
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