SECURITIES ESCROW AGREEMENT
Exhibit
10.3
SECURITIES
ESCROW AGREEMENT, dated as of October 4, 2007 (the “Agreement”) by and among FMG
Acquisition Corp., a Delaware corporation (the “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 (the “Escrow Agent”).
WHEREAS,
the Company has entered into an Underwriting Agreement, dated October 4, 2007
(“Underwriting Agreement”) with Pali Capital, Inc. (“Pali”) acting as
representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to
purchase 4,500,000 units (not including the underwriters’ over-allotment
option) (“Units”) of the Company. Each Unit consists of one share of the
Company’s common stock, par value $.0001 per share (the “Common Stock”), and one
warrant (“Warrant”), each Warrant to purchase one share of Common Stock, all as
more fully described in the Company’s definitive Prospectus, dated October 4,
2007 (“Prospectus”) comprising part of the Company’s Registration Statement on
Form S-1 (File No. 333-143466) under the Securities Act of 1933, as amended
(the
“Registration Statement”), declared effective on October 4, 2007 (the “Effective
Date”);
WHEREAS,
the Initial Stockholders have agreed, as a condition of the Underwriters’
obligation to purchase the Units pursuant to the Underwriting Agreement and
to
offer them to the public, to deposit all of their shares of Common Stock, as
set
forth opposite their respective names in Exhibit A attached hereto (collectively
the “Escrow Shares”), in escrow as hereinafter provided;
WHEREAS,
the Company has entered into a Subscription Agreement with one of the Initial
Stockholders (the “Initial Warrantholder”, and together with the Initial
Stockholders, the “Initial Holders”), dated May 22, 2007 (the “Subscription
Agreement”), pursuant to which the Initial Warrantholder has agreed to purchase
1,250,000 warrants (the “Private Warrants”) in a private placement
transaction;
WHEREAS,
the Initial Warrantholder has agreed as a condition of the sale of the Private
Warrants to deposit the Private Warrants (together with the Escrow Shares,
the
“Escrow Securities”), with the Escrow Agent as hereinafter provided;
and
WHEREAS,
the Company and the Initial Holders desire that the Escrow Agent accept the
Escrow Securities, in escrow, to be held and disbursed as hereinafter
provided.
IT
IS
AGREED:
1. Appointment
of Escrow Agent.
The
Company and the Initial Holders 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 Securities.
On or
before the Effective Date, each of the Initial Holders shall deliver to the
Escrow Agent certificates representing his, her or its respective Escrow
Securities, to be held and disbursed subject to the terms and conditions of
this
Agreement. Each Initial Holder acknowledges and agrees that the certificates
representing his or her Escrow Securities will bear a legend to reflect the
deposit of such Escrow Securities under this Agreement.
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3. Disbursement
of the Escrow Securities.
3.1 The
Escrow Agent shall hold the Escrow Shares and the Private Warrants until the
termination of their respective Escrow Period (as defined below). In the case
of
the Escrow Shares, the “Escrow Period” shall be the period beginning on the date
the certificates representing the Shares are deposited with the Escrow Agent
and
ending on the date that is twelve (12) months following the consummation of
the
initial Business Combination (as such term is defined in the Registration
Statement). In the case of the Private Warrants, the “Escrow Period” shall be
the period beginning on the date the certificates representing the Private
Warrants are deposited with the Escrow Agent and ending on the 90th day after
the date of the consummation of the initial Business Combination. On the
termination date of the applicable Escrow Period, the Escrow Agent shall, upon
written instructions from the Company or Company counsel, disburse each of
the
Initial Holders’ Escrow Securities to such Initial Holder; 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 Securities; 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 receipt of a notice, executed by
the
Chairman, Chief Executive Officer or Chief Financial Officer of the Company,
in
form reasonably acceptable to the Escrow Agent, certifying that such transaction
is then being consummated, release the Escrow Securities to the Initial Holders
so that they can similarly participate. The Escrow Agent shall have no further
duties hereunder after the disbursement or destruction of the Escrow Securities
in accordance with this Section 3.
4. Rights
of Initial Holders in Escrow Securities.
4.1 Voting
Rights as a Stockholder.
Subject
to the terms of the Insider Letters 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 Securities.
During
the Escrow Period, all dividends payable in cash with respect to the Escrow
Securities 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 Securities” 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 Securities except (i) by gift to a member of Initial Holders’
immediate family or to a trust or other entity, the beneficiary of which is
an
Initial Holder or a member of an Initial Holder’s immediate family, (ii) by
virtue of the laws of descent and distribution upon death of any Initial Holder,
(iii) pursuant to a qualified domestic relations order, (iv) to an entity that
is an Initial Holder, (v) to any person or entity controlling, controlled by,
or
under common control with, an Initial Holder or (vi) with respect to an Initial
Holder who is an individual, to an entity controlled by such Initial Holder;
provided, however, that such permitted 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
Holder transferring the Escrow Securities. During the Escrow Period, the Initial
Holders shall not pledge or grant a security interest in the Escrow Securities
or grant a security interest in their rights under this
Agreement.
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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 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 Securities 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 Securities or it may deposit the Escrow Securities with the clerk
of
any appropriate court or it may retain the Escrow Securities 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
Securities 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, as set forth on Exhibit B hereto.
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 Holders
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.
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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 and approved by Pali, the Escrow
Securities 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 Securities with any court it 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.
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 Holders hereby acknowledges that the Underwriters, including,
without limitation, Pali, are third party beneficiaries of this Agreement and
this Agreement may not be modified or changed without the prior written consent
of Pali.
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.
6.5 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 by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or,
if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two business days after the date of
mailing, as follows:
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If
to the
Company, to:
Xxxx
Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx Xxxxx, Chief Executive Officer and President
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:
Xxxxx X. Di Paolo
Fax
No.:
(000) 000-0000
A
copy of
any notice sent hereunder shall be sent to:
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxxxxxx Xxxxxxx, Esq.
and:
Pali
Capital, Inc.
000
Xxxxx
Xxxxxx, 0xx
xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
R.
Xxxxxxx Xxxxxx, Managing Director
Ellenoff,
Xxxxxxxx & Schole LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxxxxxx, 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.
6.8 Waiver.
Notwithstanding anything herein to the contrary, the Escrow Agent hereby waives
any and all right, title, interest or claim of any kind (“Claim”) in or to any
distribution of the Trust Account, 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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6.9 Counterparts.
This
Agreement may be executed in several counterparts each one of which shall
constitute an original and may be delivered by facsimile transmission and
together shall constitute one instrument.
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of page intentionally left blank]
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WITNESS
the execution of this Agreement as of the date first above written.
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By:
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/s/
Xxxxxx Xxxxx
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Xxxxxx
Xxxxx, Chief Executive Officer and President
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CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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Title:
Vice President
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FMG
INVESTORS LLC
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By:
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/s/
Xxxxx X. Xxxxx. Jr.
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Xxxxx
X. Xxxxx, Xx.
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Managing
Member
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Address:Four
Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
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/s/
Xxxx Xxxxx
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Xxxx
Xxxxx
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
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/s/
Xxxxxx X. Argent
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Xxxxxx
X. Xxxxxxx
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/s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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EXHIBIT
A
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Investor
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Investors
Address
and
Facsimile Number
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FMG
Investors LLC
Number
of Shares: 1,099,266
Number
of Warrants: 1,250,000
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Xxxx
Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxxx, Xx.
Facsimile
Number: (000)
000-0000
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Xxxx
Xxxxx
Number
of Shares: 21,035
Number
of Warrants: 0
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c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, CEO and President
Facsimile
Number: (000)
000-0000
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Xxxxx
X. Xxxxxxxx
Number
of Shares: 21,035
Number
of Warrants: 0
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c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, CEO and President
Facsimile
Number: (000)
000-0000
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Xxxxxx
X. Xxxxxxx
Number
of Shares: 21,035
Number
of Warrants: 0
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c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, CEO and President Facsimile
Number: (000)
000-0000
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Xxxxx
X. Xxxxxx
Number
of Shares: 21,035
Number
of Warrants: 0
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c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, CEO and President
Facsimile
Number: (000)
000-0000
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EXHIBIT B
Escrow
Agent Fees
$1,800
annually for acting agent escrow fee.
Initial
acceptance fee and first year agent fee to be paid at closing.
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