SECURITIES ESCROW AGREEMENT
SECURITIES
ESCROW AGREEMENT, dated as of [ ], 2008 (the “Agreement”)
by and
among Corporate Acquirers, Inc., a Delaware corporation (the “Company”),
G.
Xxxxxxx Xxxxxx, an individual with an address at 000 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Xxxxxx”),
Xxxxxxx X. Xxxxxx, an individual with an address at 000 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Xxxxxx”),
Xxxxxxx X. Xxxxxx, an individual with an address at 000 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Xxxxxx”),
Xxxxx
X. Xxxxxx, an individual with an address at 000 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Xxxxxx”),
Xxxxxxx Xxxxx, an individual with an address at 000 Xxxx 00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Xxxxx”)
and
Corporate Acquirers, LLC, a Delaware limited liability company (“Corporate
Acquirers, LLC”,
together with Thoman, Wilson, Xxxxxx, Xxxxxx and Xxxxx, collectively, the
“Initial
Stockholders”)
and
American Stock Transfer & Trust Company, a New York corporation (the
“Escrow
Agent”).
WHEREAS,
the Company has entered into an Underwriting Agreement, dated [ ], 2008
(“Underwriting
Agreement”)
with
Deutsche
Bank Securities Inc. (“Deutsche
Bank” or
the
“Representative”),
acting as representative of the underwriters, pursuant
to which, among other matters, Deutsche Bank and Pali
Capital, Inc. (“Pali”
and
together with Deutsche Bank, hereinafter referred to as the “Underwriters”), have
agreed to purchase 10,000,000 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”),
to
purchase one share of Common Stock, all as more fully described in the Company’s
definitive prospectus, dated [ ], 2008 (“Prospectus”)
comprising part of the Company’s Registration Statement on Form S-1 (File No.
333-149037) under the Securities Act of 1933, as amended (the “Registration
Statement”),
declared effective on [ ], 2008 (the “Effective
Date”);
WHEREAS,
the Company has entered into a Subscription Agreement with Xxxxxx, dated
as of
September 27, 2007, pursuant to which Xxxxxx purchased 1,625,000 shares of
Common Stock from the Company;
WHEREAS,
the Company has entered into a Subscription Agreement with Xxxxxx, dated
as of
September 27, 2007, pursuant to which Xxxxxx purchased 875,000 shares of
Common
Stock from the Company;
WHEREAS,
the Company has entered into a Subscription Agreement with Xxxxxx, dated
as of
September 27, 2007, pursuant to which Xxxxxx purchased 375,000 shares of
Common
Stock from the Company;
WHEREAS,
the Company has entered into a Subscription Agreement with Xxxxxx, dated
as of
September 27, 2007, pursuant to which Xxxxxx purchased 250,000 shares of
Common
Stock from the Company;
WHEREAS,
on November 14, 2007, the Board of Directors of the Company authorized a
reverse
stock split of 0.08 shares of Common Stock for each outstanding share of
Common
Stock.
WHEREAS,
Xxxxxx has entered into a Contribution Agreement with Corporate Acquirers,
LLC,
dated as of November 28, 2007, pursuant to which Xxxxxx contributed 1,495,000
shares of Common Stock to Corporate Acquirers, LLC in exchange for his
membership interests therein;
1
WHEREAS,
Xxxxxx has entered into a Contribution Agreement with Corporate Acquirers,
LLC,
dated as of November 28, 2007, pursuant to which Xxxxxx contributed 805,000
shares of Common Stock to Corporate Acquirers, LLC in exchange for his
membership interests therein;
WHEREAS,
Xxxxxx has entered into a Contribution Agreement with Corporate Acquirers,
LLC,
dated as of November 28, 2007, pursuant to which Xxxxxx contributed 345,000
shares of Common Stock to Corporate Acquirers, LLC in exchange for his
membership interests therein;
WHEREAS,
Xxxxxx has entered into a Contribution Agreement with Corporate Acquirers,
LLC,
dated as of November 28, 2007, pursuant to which Xxxxxx contributed 230,000
shares of Common Stock to Corporate Acquirers, LLC in exchange for his
membership interests therein;
WHEREAS,
Corporate Acquirers, LLC 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 its shares of Common Stock (collectively
the
“Escrow
Shares”),
in
escrow as hereinafter provided;
WHEREAS,
the Company has entered into a Subscription Agreement with Corporate Acquirers,
LLC (the “Initial
Warrantholder”,
and
together with the Initial Stockholders, the “Initial
Holders”),
dated
as of February 3, 2008 (the “Subscription
Agreement”),
pursuant to which the Initial Warrantholder has agreed to purchase 3,000,000
warrants (the “Private
Warrants”)
in a
private placement transaction;
WHEREAS,
the Initial Warrantholder has agreed to deposit the Private Warrants
(collectively with the Escrow Shares, the “Escrow
Securities”),
in
escrow 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.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein and intending to be legally
bound hereby, the parties hereto agree as follows:
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
and Forfeiture of the Escrow Securities.
2.1 On
or
before the Effective Date, the Initial Holders shall deliver to the Escrow
Agent
certificates representing the 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 the Escrow Securities
are legended to reflect the deposit of such Escrow Securities under this
Agreement.
2.2 If
the
over-allotment option is not exercised in full by the Underwriters, then
promptly following the earlier to occur of the expiration or termination
of the
over-allotment option, the Company will cause the Initial Stockholders to
forfeit shares of Common Stock (up to 375,000 shares of Common Stock) in
an
aggregate amount sufficient to cause the Initial Stockholders to own a number
of
shares of Common Stock equal to 20% of the outstanding Common Stock after
giving
effect to the offering of the Units and the exercise, if any, of the
over-allotment option. For the avoidance of doubt, if the Underwriters exercise
the over-allotment option in full, the Initial Stockholders shall not be
required to forfeit any shares of Common Stock.
2
3. Disbursement
of the Escrow Securities.
3.1 The
Escrow Agent shall hold the Escrow Securities until 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 Effective Date and ending on the date that
is the
one year anniversary following the initial consummation of a merger, capital
stock exchange, asset or stock acquisition, exchangeable share transaction,
joint venture or other similar business combination with one or more domestic
or
international operating businesses (the “Business
Combination”),
or
earlier in the event the Company were to consummate a transaction after the
consummation of the initial Business Combination that results in all of the
stockholders having the right to exchange their Common Stock for cash,
securities or other property. In the case of the Private Warrants, the
“Escrow
Period”
shall
be the period beginning on the Effective Date and ending on the 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 each Initial Holder, disburse the applicable 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,
however, that if the Underwriters do not exercise their over-allotment option
to
purchase an additional 1,500,000 Units of the Company (as described in the
Prospectus), the Initial Stockholders agree that the Escrow Agent shall return
to the Company for cancellation, at no cost, the number of Escrow Shares
held by
each Initial Stockholder equal to the product obtained by multiplying (i)
the
number of Escrow Shares held by such Initial Stockholder on the Effective
Date
by (ii) a fraction, (x) the numerator of which is 375,000, and (y) the
denominator of which is 2,875,000, by (iii) an amount equal to (x) the
difference between 1,500,000 and the number of units purchased by the
Underwriters upon the exercise of the over-allotment option, divided by (y)
1,500,000; 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 notice executed by the Chief Executive Officer or Chief Financial Officer
of
the Company, in form reasonably acceptable to the Escrow Agent, certifying
that
such transaction is 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 an Initial 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 the shares of Common Stock then owned by
them.
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 applicable Escrow Period, no offer, sale, contract to sell, pledge,
transfer, hedge or other disposition may be made of any or all of the Escrow
Securities except (i) upon the dissolution and liquidation of Corporate
Acquirers, LLC and the distribution of assets to its member; (ii) by gift
to a
immediate family member of an Initial Holder or member of Corporate Acquirers,
LLC or to a trust or other entity, the beneficiary of which is an immediate
family member of an Initial Holder or a member of the immediate family of
a
member of Corporate Acquirers, LLC, (iii) by virtue of the laws of descent
and
distribution upon death of any Initial Holder or any member of Corporate
Acquirers, LLC, (iv) pursuant to a qualified domestic relations order, (v)
in
the event of the Company’s liquidation prior to the completion of its initial
Business Combination, or (vi) in the event of the Company’s consummation of a
liquidation, merger, stock exchange or other similar transaction which results
in all of the Company’s stockholders having the right to exchange their shares
of Common Stock for cash, securities or other property subsequent to the
Company’s consummation of an initial Business Combination; 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 Letters signed by the Initial Holders 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.
3
4.4 Insider
Letters.
Each of
the Initial Holders has executed a letter agreement with the Underwriters
and
the Company, and which is filed as an exhibit to the Registration Statement
(the
“Insider
Letters”),
respecting the rights and obligations of such Initial Holder in certain events,
including, but not limited to, the liquidation of the Company.
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 legal counsel, advisors’ and
agents’ fees and disbursements and all taxes or other governmental
charges.
4
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.
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 the
Underwriters, which approval will not be unreasonably withheld, conditioned
or
delayed, 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 reasonably 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 Holders, 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.
5.8 Waiver.
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 (as defined in that certain Investment
Management Trust Agreement by and between the Company and the Escrow Agent
as
trustee thereunder), and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason
whatsoever.
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, the Representative, are third party beneficiaries of
this
Agreement and shall be entitled to enforce the terms of this Agreement to
the
same extent as if they were parties hereto.
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 be
charged and by the Representative.
5
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:
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
G.
Xxxxxxx Xxxxxx, Chairman, Chief Executive Officer and President
with
a
copy to:
Ellenoff,
Xxxxxxxx & Schole LLP
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxxxxxx, Esq.
Fax
No.:
(000) 000-0000
If
to an
Initial Holder, to the address set forth in Exhibit A.
and
if to
the Escrow Agent, to:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx, Xxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
[ ]
Fax
No.:
[ ]
A
copy of
any notice sent hereunder shall be sent to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxxx, Esq.
Fax
No.:
(000) 000-0000
Deutsche
Bank Securities Inc.
00
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Equity Capital Markets - Syndicate Desk
Attn: Equity Capital Markets - Syndicate Desk
Pali
Capital, Inc.
000
Xxxxx
Xxxxxx, 0xx
xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx Xxxxxx, Managing Director
Fax
No.:
(000) 000-0000
6
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 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.
[remainder
of page intentionally left blank]
7
WITNESS
the execution of this Agreement as of the date first above written.
By:
_________________________________________________
G.
Xxxxxxx Xxxxxx, Chairman, Chief Executive Officer and President
AMERICAN
STOCK TRANSFER & TRUST COMPANY
By:________________________________
Name:
Title:
| INITIAL HOLDERS: | ||
|
G. Xxxxxxx Xxxxxx |
||
|
Xxxxxxx X. Xxxxxx |
||
|
Xxxxxxx X. Xxxxxx |
||
|
Xxxxx X. Xxxxxx |
||
|
Xxxxxxx Xxxxx |
||
|
CORPORATE ACQUIRERS, LLC
|
||
|
BY:
|
|
|
|
Name:
G. Xxxxxxx Xxxxxx
Title:
Managing Member
|
||
8
EXHIBIT
A
|
Investor
|
Investors
Address
and
Facsimile Number
|
|
Corporate
Acquirers, LLC
Number
of Shares: _2,875,000___
Number
of Warrants: 3,000,000
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
Attn:
Xxxxxxx X. Xxxxxx.
Facsimile
Number: (
)
|
|
G.
Xxxxxxx Xxxxxx
Number
of Shares: 1,437,500
Number
of Warrants: ____0_____
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
(212)
813-0323
|
|
Xxxxxxx
X. Xxxxxx
Number
of Shares: _526,125____
Number
of Warrants: _0________
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
(212)
813-0323
|
|
Xxxxxxx
X. Xxxxxx
Number
of Shares: _336,375___
Number
of Warrants: ___0______
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
(212)
813-0323
|
|
Xxxxx
X. Xxxxxx
Number
of Shares: _287,500____
Number
of Warrants: _____0____
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
(212)
813-0323
|
|
Xxxxxxx
Xxxxx
Number
of Shares: _287,500____
Number
of Warrants: _____0____
|
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
(212)
813-0323
|
9
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.
10
