EXHIBIT 10.10
FORM OF
STOCK ESCROW AGREEMENT
STOCK ESCROW AGREEMENT, dated as of ___________ ___, 2005
("Agreement") by and among Media & Entertainment Holdings, Inc., a Delaware
corporation ("Company"), the undersigned parties listed as Initial Stockholders
on the signature page hereto (collectively, the "Initial Stockholders") and
Continental Stock Transfer & Trust Company, a New York corporation ("Escrow
Agent").
WHEREAS, the Company has entered into an Underwriting Agreement,
dated _______ __, 2005 ("Underwriting Agreement") with Jesup & Xxxxxx Securities
Corporation ("Jesup & Xxxxxx") acting as representative of the several
underwriters (collectively, the "Underwriters"), pursuant to which, among other
matters, the Underwriters have agreed to purchase 15,000,000 units ("Units") of
the Company. Each Unit consists of one share of the Company's Common Stock, par
value $.0001 per share, and two Warrants, each Warrant to purchase one share of
Common Stock, all as more fully described in the Company's definitive
Prospectus, dated ________ __, 2005 ("Prospectus") comprising part of the
Company's Registration Statement on Form S-1 (File No. 333-________) under the
Securities Act of 1933, as amended ("Registration Statement"), declared
effective on ________ __, 2005 ("Effective Date").
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, 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 or her 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 or her Escrow Shares is
legended to reflect the deposit of such Escrow Shares under this Agreement.
3. DISBURSEMENT OF THE ESCROW SHARES. The Escrow Agent shall hold the
Escrow Shares until the first anniversary of the completion by the Company of a
business combination ("Escrow Period"), on which date it shall, upon written
instructions from each Initial Stockholder, disburse each of the Initial
Stockholder's Escrow Shares to such Initial
Stockholder; provided, however, that if the Escrow Agent is notified by the
Company pursuant to Section 6.7 hereof that the Company is being liquidated at
any time during the Escrow Period, then the Escrow Agent shall promptly destroy
the certificates representing the Escrow Shares; provided further, that if,
after the Company consummates a Business Combination (as such term is defined in
the Registration Statement), it (or the surviving entity) subsequently
consummates a liquidation, merger, stock exchange or other similar transaction
which results in all of its 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 consummation of such transaction, release the
Escrow Shares to the Initial Stockholders so that they can similarly
participate. The Escrow Agent shall have no further duties hereunder after the
disbursement or destruction of the Escrow Shares 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 described in Section 4.4 hereof and except as herein provided,
the Initial Stockholders shall retain all of their rights as stockholders of the
Company during the Escrow Period, including, without limitation, the right to
vote such shares.
4.2. DIVIDENDS AND OTHER DISTRIBUTIONS IN RESPECT OF THE ESCROW
SHARES. During the Escrow Period, all dividends payable in cash with respect to
the Escrow Shares shall be paid to the Initial Stockholders, but all dividends
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.
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 (i) by gift to a member of Initial Stockholder's immediate family
or to a trust or other entity, the beneficiary of which is an Initial
Stockholder or a member of an Initial Stockholder's immediate family, (ii) by
virtue of the laws of descent and distribution upon death of any Initial
Stockholder, or (iii) pursuant to a qualified domestic relations order;
provided, however, that such permissive transfers may be implemented only upon
the respective transferee's written agreement to be bound by the terms and
conditions of this Agreement and of the Insider Letter signed by the Initial
Stockholder transferring the Escrow Shares. During the Escrow Period, the
Initial Stockholders shall not pledge or grant a security interest in the Escrow
Shares or grant a security interest in their rights under this Agreement.
4.4. INSIDER LETTERS. Each of the Initial Stockholders has
executed a letter agreement with Jesup & Xxxxxx and the Company, dated as
indicated on Exhibit A hereto, and which is filed as an exhibit to the
Registration Statement ("Insider Letter"), respecting the rights and obligations
of such Initial Stockholder in certain events, including but not limited to the
liquidation of the Company.
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
2
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 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 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.
5.3. COMPENSATION. The Escrow Agent shall be entitled to
reasonable compensation from the Company for all services rendered by it
hereunder. The Escrow Agent shall also 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
deems appropriate.
3
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.
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. Each of the parties 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 United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
Each of the parties hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum.
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 Jesup & Xxxxxx.
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.
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:
Media & Entertainment Holdings, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Chief Executive Officer
4
If to a Stockholder, to his 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
A copy of any notice sent hereunder shall be sent to:
Xxxxxxxxx Traurig LLP
MetLife Building
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Annex, Esq.
and:
Jesup & Xxxxxx Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxxx
and:
Xxxxxx Xxxx & Priest LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
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 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.
5
WITNESS the execution of this Agreement as of the date first above
written.
MEDIA & ENTERTAINMENT HOLDINGS, INC.
By:
--------------------------------------------
Xxxxxxx X. Xxxxxxx, Chief Executive Officer
INITIAL STOCKHOLDERS:
------------------------
Xxxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxx, Xx.
------------------------
Xxxxx Xxxxxx
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
6
EXHIBIT A
Name and Address of Number Stock Date of
INITIAL STOCKHOLDER of Shares Certificate Number Insider Letter
-------------------
Xxxxxxx X. Xxxxxxx 937,500 1 August 25, 2005
Xxxxxx X. Xxxxxxxxx 937,500 2 August 25, 2005
Xxxxxx X. Xxxxxxx, Xx. 937,500 3 August 25, 2005
Xxxxx Xxxxxx 937,500 4 August 25, 2005
7
