STOCK ESCROW AGREEMENT
STOCK
ESCROW AGREEMENT, dated as of __________ , 2011 (“Agreement”), by and among
UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION., a Delaware
corporation (“Company”), (collectively “Initial Stockholders”) and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow
Agent”).
WHEREAS,
the Company has entered into an underwriting agreement, dated ______________,
2011 (“Underwriting Agreement”), with EarlyBirdCapital, Inc. (“EBC”)
acting as representative of the several underwriters (collectively, the
“Underwriters”), pursuant to which, among other matters, the Underwriters have
agreed to purchase 12,000,000 units (“Units”) of the Company with an option to
purchase up to 1,800,000 additional Units to cover
over-allotments. Each Unit consists of one share of the Company’s
common stock, par value $0.001 per share (“Common Stock”), and one warrant, each
warrant to purchase one share of Common Stock, all as more fully described in
the Company’s Registration Statement on Form S-1 (File No. 333-171359)
(“Registration Statement”) under the Securities Act of 1933, as amended (the
“Securities Act”) , declared effective on ______________, 2011 (“Effective
Date”), following which the Company filed its final prospectus (the
“Prospectus”) under Rule 424 of the Securities Act.
WHEREAS,
the Initial Stockholders have agreed as a condition of the sale of the Units to
deposit their shares of Common Stock of the Company, as set forth opposite their
respective names in Exhibit A attached hereto (collectively “Escrow Shares”), in
escrow as hereinafter provided.
WHEREAS,
each of the Initial Stockholders has executed a letter agreement with the
Underwriters and the Company dated as of the date hereof (the “Insider
Letters”)
WHEREAS,
the Company and the Initial Stockholders desire that the Escrow Agent accept the
Escrow Shares, in escrow, to be held and disbursed as hereinafter
provided.
IT IS
AGREED:
1. Appointment of Escrow
Agent. The Company and the Initial Stockholders hereby appoint
the Escrow Agent to act in accordance with and subject to the terms of this
Agreement and the Escrow Agent hereby accepts such appointment and agrees to act
in accordance with and subject to such terms.
2. Deposit of Escrow
Shares. On or before the Effective Date, each of the Initial
Stockholders shall deliver to the Escrow Agent certificates representing his,
her or its respective Escrow Shares, to be held and disbursed subject to the
terms and conditions of this Agreement. Each Initial Stockholder
acknowledges that the certificate representing his, her or its Escrow Shares is
legended to reflect the deposit of such Escrow Shares under this
Agreement.
3. Disbursement of the Escrow
Shares.
3.1. Failure to Exercise
Over-Allotment Option. If the Underwriters fail to exercise
their over-allotment option to purchase up to an additional 1,800,000 Units of
the Company (as described in the Prospectus) in full, the Initial Stockholders
agree that the Escrow Agent shall return to the Company for cancellation, at no
cost, the number of Escrow Shares held by each Initial Stockholder determined by
multiplying (a) the product of (i) 450,000, multiplied by (ii) a fraction, (x)
the numerator of which is the number of Escrow Shares held by each Initial
Stockholder, and (y) the denominator of which is the total number of Escrow
Shares, by (b) a fraction, (i) the numerator of which is 1,800,000 minus the
number of Units purchased by the Underwriters upon the exercise of their
over-allotment option, and (ii) the denominator of which is
1,800,000.
3.2. Pre-Business
Combination. The Escrow Agent shall hold the Escrow Shares
until one year after the consummation of a Business Combination (as defined in
the Registration Statement), on which date it shall, upon written instructions
from each Initial Stockholder, disburse 75% of the Initial Stockholder’s Escrow
Shares (and any applicable stock power) to such Initial Stockholder, the
remaining 25% of the Initial Stockholder’s Escrow Shares to remain in escrow
until such time as a redemption under Section 6.1 of that certain warrant
agreement entered into between the Company and the Escrow Agent concurrently
with this Agreement (the “Warrant Agreement”) occurs, if at all. If
such a redemption does not occur prior to the expiration of the warrants
governed by the Warrant Agreement, the remaining 25% of the Initial
Stockholder’s Escrow Shares shall be returned to the Company for cancellation.
The
earlier of the date on which a redemption under Section 6.1 of the Warrant
Agreement occurs and the expiration of the warrants governed by the Warrant
Agreement is referred to herein as the “Escrow Period”
3.3. Post-Business
Combination. If, after the Company consummates a Business Combination (as
such term is defined in the Underwriting Agreement), it (or the surviving
entity) subsequently consummates a liquidation, merger, stock exchange or other
similar transaction which results in all of the stockholders of such entity
having the right to exchange their shares of Common Stock for cash, securities
or other property, then the Escrow Agent will, upon receipt of a certificate,
executed by the Chairman of the Board or other authorized officer of the
Company, in form reasonably acceptable to the Escrow Agent, that such
transaction is then being consummated or such conditions have been achieved, as
applicable, release the Escrow Shares to the Initial
Stockholders. The Escrow Agent shall have no further duties hereunder
after the disbursement in accordance with this Section 3.
4. Rights of Initial
Stockholders in Escrow Shares.
4.1. Voting Rights as a
Stockholder. Subject to the terms of the Insider Letter and
except as herein provided, the Initial Stockholders shall retain all of their
rights as stockholders of the Company during the Escrow Period, including the
right to vote such shares, other
than with respect to any Escrow Shares which shall have been returned to the
Company for cancellation.
4.2. Dividends and Other
Distributions in Respect of the Escrow Shares. During the
Escrow Period, all dividends or distributions payable in cash with respect to
the Escrow Shares shall be paid to the Initial Stockholders, but all dividends
or distributions payable in stock or other non-cash property (“Non-Cash
Dividends”) shall be delivered to the Escrow Agent to hold in accordance with
the terms hereof. As used herein, the term “Escrow Shares” shall be
deemed to include the Non-Cash Dividends distributed thereon, if
any.
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4.3. Restrictions on
Transfer. During the Escrow Period, no sale, transfer or other
disposition may be made of any or all of the Escrow Shares except as (A) pledges
to secure the obligations incurred in connection with purchases of the Escrow
Shares, (B) private sales of the Escrow Shares placed in the escrow account made
at or prior to the consummation of a business combination at prices no greater
than the price at which the shares were originally purchased or (C) transfers to
(i) the Company’s officers and directors, (ii) an entity’s members upon its
liquidation, (iii) a member of an Initial Stockholder’s immediate family or to a
trust, by bona fide gift, the beneficiary of which is an Initial Stockholder or
a member of an Initial Stockholder’s immediate family for estate planning
purposes, (iv) by virtue of the laws of descent and distribution upon death, (v)
pursuant to a qualified domestic relations order or (vi) to the Company for
cancellation in connection with the consummation of a business combination;
provided, however, that such transfers except for transfers under (B) or (C)(vi)
may be implemented only upon the respective transferee’s written agreement to be
bound by the terms and conditions of this Agreement, following which such
transferee shall be an Initial Stockholder for the purposes of this
Agreement.
5. Concerning the Escrow
Agent.
5.1. Good Faith
Reliance. The Escrow Agent shall not be liable for any action
taken or omitted by it in good faith and in the exercise of its own best
judgment, and may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any notice or demand,
or any waiver, modification, termination or rescission of this Agreement unless
evidenced by a writing delivered to the Escrow Agent signed by the proper party
or parties and, if the duties or rights of the Escrow Agent are affected, unless
it shall have given its prior written consent thereto.
5.2. Indemnification. The
Escrow Agent shall be indemnified and held harmless by the Company from and
against any documented, out-of-pocket 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 held by it hereunder, other than
expenses or losses arising from the bad faith, 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 it may deposit the Escrow Shares with the clerk of any
appropriate court or it may retain the Escrow Shares 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 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.
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5.3. Compensation. The
Escrow Agent shall be entitled to reasonable compensation from the Company for
all services rendered by it hereunder, as described in Exhibit B
hereto. The Escrow Agent shall be entitled to reimbursement from the
Company for all expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all counsel, advisors’ and
agents’ fees and disbursements and all taxes or other governmental
charges.
5.4. Further
Assurances. From time to time on and after the date hereof,
the Company and the Initial Stockholders shall deliver or cause to be delivered
to the Escrow Agent such further documents and instruments and shall do or cause
to be done such further acts as the Escrow Agent shall reasonably request to
carry out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected in acting
hereunder.
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
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 with any court it reasonably deems
appropriate.
5.6. Discharge of Escrow
Agent. The Escrow Agent shall resign and be discharged from
its duties as escrow agent hereunder if so requested in writing at any time by
the other parties hereto, jointly, provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor escrow
agent as provided in Section 5.5.
5.7. Liability. Notwithstanding
anything herein to the contrary, the Escrow Agent shall not be relieved from
liability hereunder for its own gross negligence or its own willful
misconduct.
5.8.
Waiver.
The Escrow Agent hereby waives any and all right, title, interest or claim of
any kind (each, a “Claim”) in or to any distribution from the Trust Account (as
defined in the Investment Management Trust Agreement dated as of the date hereof
by and between the Company and the Escrow Agent, as trustee thereunder) and
hereby agrees not to seek recourse, reimbursement, payment or satisfaction for
any Claim against the Trust Account for any reason whatsoever.
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6. Miscellaneous.
6.1. Governing
Law. This Agreement shall for all purposes be deemed to be
made under and shall be construed in accordance with the laws of the State of
New York. The Company hereby agrees that any action, proceeding or
claim against it arising out of or relating in any way to this Agreement shall
be brought and enforced in the courts of the State of New York or the U.S.
District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The Company
hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenience forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 6.6 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim.
6.2. Third Party
Beneficiaries. Each of the Initial Stockholders hereby
acknowledges that the Underwriters are third party beneficiaries of this
Agreement and this Agreement may not be modified or changed without the prior
written consent of EBC.
6.3. Entire
Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to the charged. It may be
executed in several original or facsimile counterparts, each one of which shall
constitute an original, and together shall constitute but one
instrument
6.4. Headings. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation thereof.
6.5. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties hereto and their legal representatives,
successors and assigns.
6.6. Notices. Any
notice or other communication required or which may be given hereunder shall be
in writing and either be delivered personally or be mailed, certified or
registered mail, or by private national courier service, return receipt
requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, two days after the date of mailing, as
follows:
If to the
Company, to:
c/o UBPS
Services, LLC
Radnor
Financial Center
000 Xxxxx
Xxxxxx-Xxxxxxx Xxxx, Xxxxx X-000
Xxxxxx,
Xxxxxxxxxxxx 00000
Attn:
Xxxxx X. Xxxx
If to a
Stockholder, to the address set forth in Exhibit A.
and if to
the Escrow Agent, to:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Chairman
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A copy of
any notice sent hereunder shall be sent to:
Dechert
LLP
0000 X
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attn: Xxxxxx
X. Xxxxxxxxx
and:
EarlyBirdCapital,
Inc.
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxxx Xxxxxx
The
parties may change the persons and addresses to which the notices or other
communications are to be sent by giving written notice to any such change in the
manner provided herein for giving notice.
6.7. Liquidation of the
Company. The Company shall give the Escrow Agent written
notification of the liquidation and dissolution of the Company in the event that
the Company fails to consummate a Business Combination within the time period(s)
specified in the Prospectus.
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WITNESS
the execution of this Agreement as of the date first above written.
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UNIVERSAL
BUSINESS PAYMENT
SOLUTIONS
ACQUISITION CORPORATION
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By:
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Name:
Xxxxx X. Xxxx
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Title:
Chief Executive Officer
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INITIAL
STOCKHOLDERS:
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By:
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| CONTINENTAL STOCK TRANSFER & | ||
| TRUST COMPANY | ||
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By:
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Name:
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Title:
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EXHIBIT
A
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Name and Address of
Initial Stockholder
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Number
of Shares
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Stock
Certificate Number
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Date of
Letter Agreement
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EXHIBIT
B
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