STOCK ESCROW AGREEMENT
STOCK
ESCROW AGREEMENT, dated as of ___________ ___, 2006 (“Agreement”) by and among
Shine Media Acquisition Corp., 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 _______ __, 2006
(“Underwriting Agreement”) with Xxxxxxxx Curhan Ford & Co., as
Representative (“Xxxxxxxx”) and the other underwriters named therein
(collectively, the “Underwriters”), pursuant to which, among other matters, the
Underwriters have agreed to purchase 6,000,000 units (“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 two Warrants, each Warrant to purchase one
share of Common Stock, all as more fully described in the Company’s definitive
Prospectus, dated ________ __, 2006 (“Prospectus”) comprising part of the
Company’s Registration Statement on Form S-1 (File No. 333-127093) under the
Securities Act of 1933, as amended (“Registration Statement”), declared
effective on ________ __, 2006 (“Effective Date”); and
WHEREAS,
on April 27, 2006 the Company granted option awards (“Options”) to the Initial
Stockholders, which options are exercisable for a number of shares equal to
25%
of the number of shares obtained by the Underwriters upon exercise of the
over-allotment option, up to a maximum of 225,000 shares (“Option Shares”);
and
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
including Option Shares, if any, as set forth opposite their respective names
in
Schedule
A
attached
hereto (collectively “Escrow Shares”), in escrow as hereinafter provided;
and
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, 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.
With
respect to the Escrow Shares other than the Option Shares, each of the Initial
Stockholders shall deliver on or prior to the Effective Date to the Escrow
Agent
certificates representing his or her respective Escrow Shares that have been
issued as of such date, to be held and disbursed subject to the terms and
conditions of this Agreement. In the event that any Options are exercised,
then
with respect to the Option Shares issued upon such exercise, each of the Initial
Stockholders shall deliver, within three (3) days of the issuance of such
shares, certificates representing his or her Option 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 his
or
her Escrow Shares is or, with respect to the Option Shares, will be legended
to
reflect the deposit of such Escrow Shares under this Agreement. Each Initial
Stockholder and the Company further acknowledges and agrees that in the event
of
the deposit of Option Shares under this Agreement, the Company shall deliver
a
new Schedule A to the Escrow Agent to reflect such deposit.
3. Disbursement
of the Escrow Shares.
The
Escrow Agent shall hold the Escrow Shares until three years from the date of
the
Prospectus (“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 6.6 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, 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 certificate,
executed by the Chairman, Chief Executive Officer or Chief Financial Officer
of
the Company, in form reasonably acceptable to the Escrow Agent, that such
transaction is then being consummated, release the Escrow Shares to the Initial
Stockholders upon consummation of such transaction 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, or
(ii) by virtue of the laws of descent and distribution upon death of any Initial
Stockholder, (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.
2
4.4. Insider
Letters.
Each of
the Initial Stockholders has executed a letter agreement with Xxxxxxxx and
the
Company, dated as indicated on Schedule
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 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, as set forth on Exhibit A 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. The Escrow Agent
shall xxxx the Company on a monthly basis for services
rendered.
3
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 Xxxxxxxx, 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.
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 Company and a majority
of the Initial Stockholders, 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 (each, a “New York court”), 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. Each of Xxxxx X. Xxxx, Xxxxxxx X. Xxxx,
Xxxx Xxxxxxxx, Xxxxxx X. Hersov, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxx and AFG Trust
Assets Ltd. (together, the “Non-U.S. Initial Stockholders”) has appointed
________________ as its authorized agent (the “Authorized Agent”) upon whom
process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in
any
New York Court. Such appointment shall be irrevocable. The Company and the
Non-U.S. Initial Stockholders represent and warrant that the Authorized Agent
has agreed to act as such agent for service of process and agrees to take any
and all action, including the filing of any and all documents and instruments
that may be necessary to continue such appointment in full force and effect
as
aforesaid. Service of process upon the Authorized Agent and Written notice
of
such service to the Company shall be deemed, in every respect, effective service
of process upon the respective Non-U.S. Initial Stockholder.
4
6.2. Third-Party
Beneficiaries.
Each of
the Initial Shareholders hereby acknowledges that Xxxxxxxx is a third-party
beneficiary of this Agreement and this Agreement may not be modified or changed
without the prior written consent of Xxxxxxxx.
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 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:
If
to the
Company, to:
Rockefeller
Center
1230
Avenue of the Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx X. Xxxx, Chief Executive Officer
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: ________________
A
copy of
any notice sent hereunder shall be sent to:
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxxx
X. Xxxxxxxx, Esq.
and:
5
Xxxxxxxx
Curhan Ford & Co.
000
Xxxxxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxx X. Xxxxxx
and:
Xxxxxxx
XxXxxxxxx LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx X.
Xxxxxxx, 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.
-
Signature
page of the Company immediately follows
-
6
WITNESS
the execution of this Agreement as of the date first above written.
| |
|
|
| By: | ||
|
Xxxxx X. Xxxx, Chief Executive Officer |
||
-
Signature
page of Initial Stockholders immediately follows
-
7
WITNESS
the execution of this Agreement as of the date first above written.
| INITIAL STOCKHOLDERS: | |
| Xxxxx X. Xxxx | |
| Xxxxxxx X. Xxxx | |
| Xxxx Xxxxxxxx | |
| Xxxxxxx X. Xxxxx | |
| Xxxxxx X. Hersov | |
| Xxxx Xxxxx | |
| Xxxxxx Xxxxxxxxx | |
| Xxxxxx Xxxxx | |
| Xxxx Xxxxx | |
| Xxxx X. Xxx | |
| Xxxxxxx Xxx | |
| Hoe Xxxxx Xxx |
-
Signature
page of Trustee immediately follows
-
8
WITNESS
the execution of this Agreement as of the date first above written.
|
CONTINENTAL
STOCK
TRANSFER
&
TRUST COMPANY
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
9
SCHEDULE
A
|
Name
and Address of
Initial
Stockholder
|
Number
of
Shares
|
Stock
Certificate
Number
|
Date
of
Insider
Letter
|
|||
|
Xxxxx
X. Xxxx
|
||||||
|
Xxxxxxx
X. Xxxx
|
||||||
|
AFG
Trust Assets Ltd.
|
||||||
|
Xxxx
Xxxxxxxx
|
||||||
|
Xxxxxxx
X. Xxxxx
|
||||||
|
Xxxxxx
X. Hersov
|
||||||
|
Xxxx
Xxxxx
|
||||||
|
Xxxxxx
Xxxxxxxxx
|
||||||
|
Xxxxxx
Xxxxx
|
||||||
|
Xxxx
Xxxxx
|
||||||
|
Xxxx
X. Xxx
|
||||||
|
Xxxxxxx
Xxx
|
||||||
|
Hoe
Xxxxx Xxx
|
10
EXHIBIT
A
Escrow
Agent Fees
[To
be
determined]
11
