SECURITIES ESCROW AGREEMENT
Exhibit
10.2
This
SECURITIES
ESCROW AGREEMENT,
dated
as of [
], 2008 (the “Agreement”)
by and
among China Growth Alliance Ltd., a company formed under the laws of the Cayman
Islands (the “Company”),
the
undersigned parties listed as “Initial Stockholders” on the signature page
hereto (each, an “Initial
Stockholder”)
and
American Stock Transfer & Trust Company, a New York corporation (the
“Escrow
Agent”).
WHEREAS,
the
Company has entered into an Underwriting Agreement, dated
[
], 2008 (the “Underwriting
Agreement”)
with
Xxxxxx, Xxxxx Xxxxx, Incorporated (“FBW”)
acting
as lead managing underwriter of the several underwriters (collectively, the
“Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to
purchase 7,000,000 units (not including the underwriters’ over-allotment
option) (“Units”)
of the
Company;
WHEREAS,
each
Unit consists of: (i) one sub-unit, the contents of which are not separable
(the
“Sub-Unit”),
with
each Sub-Unit being comprised of one ordinary share of the Company, par value
$.0005 per share (the “Ordinary
Shares”)
and
one Class B warrant of the Company (the “Class
B Warrants”);
and
(ii) one Class A warrant of the Company (the “Class
A Warrants”
and
together with the Class B Warrants, the “Warrants”),
with
each Class A Warrant allowing the holder thereof to purchase one Ordinary Share,
and with every two Class B Warrants to automatically convert into one (1)
separable Class A Warrant upon the Company’s consummation of a merger, capital
stock exchange, asset or stock acquisition of, contractual control arrangement
or similar business combination with, one or more operating businesses or assets
(a “Business
Combination”),
all
as more fully described in the Company’s Prospectus, dated
[
], 2008 (“Prospectus”)
comprising part of the Company’s Registration Statement on Form F-1 (File No.
333-[
]) under the Securities Act of 1933, as amended (the “Registration
Statement”),
declared effective on
[
], 2008 (the “Effective
Date”);
WHEREAS,
each
Initial Stockholder has 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 Ordinary Shares, as set forth opposite
their respective names in Exhibit
A
attached
hereto (collectively the “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.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
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 Initial Stockholder shall deliver to the Escrow
Agent certificates representing such Initial Stockholder’s Escrow Shares, to be
held and disbursed subject to the terms and conditions of this Agreement. Each
Initial Stockholder acknowledges and agrees that the certificates representing
its Escrow Shares will bear a legend to reflect the deposit of such Escrow
Shares under this Agreement.
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3. Disbursement
of the Escrow Shares.
3.1 The
Escrow Agent shall hold the Escrow Shares until the termination of their
respective Escrow Period (as defined below). 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 the earlier
of:
(i) twelve (12) months following the consummation of the initial Business
Combination or (ii) three (3) years from the Effective Date; or (iii) the
consummation of a liquidation, share reconstruction and amalgamation, stock
exchange or other similar transaction which results in all of the Company’s
shareholders having the right to exchange their Ordinary Shares for cash,
securities or other property subsequent to the Company’s consummation a Business
Combination. Upon the termination of the Escrow Period, the Escrow Agent shall,
upon written instructions from the Initial Stockholders, disburse the Escrow
Shares to the Initial Stockholders; 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; and,
provided further,
that
if, after the Company consummates a Business Combination 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 Ordinary Shares for cash, securities or
other
property, then the Escrow Agent will, upon receipt of a notice, executed by
a
senior executive officer of the Company, in form reasonably acceptable to the
Escrow Agent, certifying that such transaction is then being consummated,
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 Letters described in Section 4.4 hereof and except
as herein provided, the Initial Stockholders shall retain all of their rights
as
a stockholder 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
Stockholders’ 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 individual Initial Stockholder, (iii) pursuant to a qualified
domestic relations order, (iv) to an entity that is an Initial Stockholder,
(v)
to any person or entity controlling, controlled by, or under common control
with, an Initial Stockholder or (vi) with respect to an Initial Stockholder
who
is an individual, to an entity controlled by such Initial Stockholder;
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 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.
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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 reasonable 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, as set forth on Exhibit B
hereto.
The Escrow Agent shall also be entitled to reimbursement from the Company for
all reasonable expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all reasonable counsel fees
and
disbursements.
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 and approved by FBW, 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.
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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.
The
Initial Stockholders hereby acknowledges that the Underwriters, including,
without limitation, FBW, are third party beneficiaries of this Agreement and
this Agreement may not be modified or changed without the prior written consent
of FBW.
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, consent or request to be given in connection with any of the terms
or
provisions of this Agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or by facsimile transmission:
If
to the
Company, to:
Xxxx
000,
4/F Aetna Tower
000
Xxxxx
Xxxx
Xxxxxxxx,
000000, Xxxxx
Attn:
Xxx
Xxxx
Fax
No.:
[
]
If
to a
Stockholder, to his address set forth in Exhibit
A.
4
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and
if to the Escrow Agent, to:
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American
Stock Transfer & Trust Company
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0000-00xx
Xxxxxx
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Xxxxxxxx,
Xxx Xxxx 00000
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Attn:
[ ]
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Fax
No.:
[ ]
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A
copy of any notice sent hereunder shall be sent to:
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Xxxxxxx
Savage LLP
|
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000
Xxxxxxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attn:
Xxxxxx X. Xxxxxx, Esq.
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Fax
No.: (000) 000-0000
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and:
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Xxxxxx,
Xxxxx Xxxxx Incorporated
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000
Xxxxx Xxxxxx
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Xxxxxxxxx,
XX 00000
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Attn:
Xxxxxxx Xxxxx
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and:
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Ellenoff,
Xxxxxxxx & Schole LLP
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000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attn:
Xxxxxxx X. Xxxxxxxx, Esq.
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Fax
No.: (000) 000-0000
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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.
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 or other
electronic transmission and together shall constitute one
instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF,
this
Securities Escrow Agreement has been duly executed by the parties hereto as
of
the day and year first above written.
| CHINA GROWTH ALLIANCE LTD. | ||
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Name:
Xxx Xxxx
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Title:
Chairman and Co-Chief Executive Officer
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AMERICAN
STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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INITIAL
STOCKHOLDERS:
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FAIR
VALUE CAPITAL LIMITED
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By:
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Name:
Xxx Xxxx
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Title:
Chairman and Co-Chief Executive
Officer
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Guangzhong
Qiu
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Yuanfei
Ma
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Xxxxxx
Xxxx
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Xxxxxx
X. Silver
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H.
Xxxxx Xxxxxxx
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6
EXHIBIT
A
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Investor
|
Investors Address
and Facsimile Number
|
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7
EXHIBIT
B
Escrow
Agent Fees
$[
] annually
for acting agent escrow fee.
Initial
acceptance fee and first year agent fee to be paid at closing.
8
