EXHIBIT 10.3
BLUE SKY LOCK-UP LETTER AGREEMENT
St. Xxxxxxxx Stockholder
________________________
________________________
Dear Stockholder:
We would like to inform you that Paragon Acquisition Company, Inc,
("Paragon"), a company in which The St. Xxxxxxxx Seaway Corporation ("St.
Xxxxxxxx") owns 514,191 shares, has filed a registration statement with the
Securities and Exchange Commission (the "Commission") registering the
distribution (the "Distribution") of one share of Paragon $.01 par value Common
Stock (the "Shares") and one right to subscribe for two (2) additional Shares of
Paragon (the "Subscription Rights") to St. Xxxxxxxx stockholders for each share
of St. Xxxxxxxx stock owned on _____, 1996 (the "Record Date"). The Distribution
to St. Xxxxxxxx Stockholders is being made by St. Xxxxxxxx for the purpose of
providing to St. Xxxxxxxx Stockholders an equity interest in Paragon without
such Stockholder being required to contribute any cash or other capital in
exchange for such equity interest. St. Xxxxxxxx Stockholders will not be
required to make any payments for the Shares or Subscription Rights. In
addition, the Distribution of Paragon Shares and Subscription Rights will not
effect any of your rights as a Stockholder in St. Xxxxxxxx. The Distribution is
more fully described in the enclosed prospectus contained in the registration
statement.
Paragon is a "blank check" company which does not yet have a specific
operating business; its business purpose is to go out and acquire an operating
business. Because Paragon is a "blank check" company, the securities division of
__________ (the "State") will not approve the registration or an exemption from
registration of the Distribution to St. Xxxxxxxx Stockholders located in the
State. Consequently, although you are a holder of ______ shares of St. Xxxxxxxx
as of the Record Date, St. Xxxxxxxx is not permitted to distribute to you
Paragon Shares and Subscription Rights.
Pursuant to this letter however, St. Xxxxxxxx will hold the Shares and
Subscription Rights to which you would have been entitled in a separate account
maintained by Continental Stock Transfer & Trust Company (the "Escrow Agent")
and Paragon agrees to undertake reasonable efforts to obtain an exemption from
registration of the distribution of those Shares to you. While the Shares are
held in the escrow account in St. Lawrence's name, you will not be entitled to
vote or direct the voting of the Shares, receive dividends or any other
distributions
related to the Shares or exercise any other rights incident to ownership of the
Shares. St. Xxxxxxxx shall have the sole voting power and the right to receive
any dividends or distributions associated with the Shares while the Shares are
registered in St. Lawrence's name. St. Xxxxxxxx agrees not to sell, pledge,
hypothecate or otherwise dispose of the Shares for a period of two (2) years
from the date the Shares are placed into the escrow account. St. Xxxxxxxx will
not exercise any Subscription Rights that are held by it subject to this Letter
Agreement, and such Subscription Rights will expire if they do not become
distributable to you prior to the consummation of a Business Combination, as
described in the enclosed Prospectus.
In the event St. Xxxxxxxx receives notification from Paragon that
registration or an exemption has been obtained for the distribution of the
Shares to you, then St. Xxxxxxxx shall instruct the Escrow Agent to prepare and
replace the Shares held by St. Xxxxxxxx subject to this Letter Agreement with
Paragon Shares recorded in your name and those Shares shall either: (i) be
placed into the "Rule 419 Escrow Account" established by Paragon with
Continental Stock Transfer & Trust Co. in accordance with the terms and
conditions described in the enclosed Prospectus, or (ii) in the event all of the
conditions for release of the Shares from the Rule 419 Escrow Account have been
satisfied, then the Shares shall be released from the Escrow Account and
delivered directly to you.
In the event Paragon cannot obtain registration or an exemption from
registration of the distribution of the Shares to you within 2 years from the
date the Shares are placed into the escrow account, then St. Xxxxxxxx shall have
the right, in its sole discretion and subject to the restrictions contained in
the Prospectus, and applicable federal and state securities laws, to sell or
otherwise dispose of the Shares. St. Xxxxxxxx agrees to remit any proceeds
received from the sale or disposition of such securities to you.
Should you have any questions regarding this letter or the terms of the
Distribution described in the enclosed summary, please feel free to contact M
.______________ at Continental Stock Transfer & Trust Company at (000) 000-0000,
ext. ___or Xxxxxxxxx X. Xxxxxxx at Xxxx Xxxxxx & Xxxxx LLP, counsel to Paragon
at (000) 000-0000.
The St. Xxxxxxxx Seaway
Corporation
By:__________________________
Name:________________________
Title:_______________________
Acknowledged and agreed to by:
Paragon Acquisition
Company, Inc
By:___________________________
Name:_________________________
Title:________________________
