SECURITIES ESCROW AGREEMENT
SECURITIES
ESCROW AGREEMENT, dated as of
[ ], 2010
(the “Agreement”) by and among 00xx Xxxxxx General Acquisition Corp., a Delaware
corporation (the “Company”), the undersigned parties listed as the Initial
Stockholders on the signature page hereto (each an “Initial Stockholder” and
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
[ ], 2010
(“Underwriting Agreement”) with Xxxxxx Xxxxxx & Co. Inc., (“MJ” or
the “Representative”), acting as
representative of the several underwriters
(collectively, the “Underwriters”), pursuant to which, among other matters, the
Underwriters have agreed to purchase 5,000,000 units (not including the
underwriters’ over-allotment option) (“Units”) of the Company’ securities. 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
[ ], 2010
(“Prospectus”) comprising part of the Company’s Registration Statement on Form
S-1 (File No. 333-163134) under the Securities Act of 1933, as amended (the
“Registration Statement”), declared effective on
[ ], 2010
(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 respective shares of Common
Stock, as set forth opposite their respective names on Exhibit A attached
hereto, in aggregate 638,889 shares (83,333 of which are subject to forfeiture
to the extent the over-allotment option is not exercised in full) (the “Escrow
Shares”), in escrow as hereinafter provided;
WHEREAS,
the Company has entered into a Warrant Subscription Agreement with one of the
Initial Stockholders (the “Initial Warrantholder”), dated October 30, 2009 (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 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 Stockholders 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, the Initial Stockholders and Initial Warrantholder
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, the Initial Stockholders and
Initial Warrantholder shall deliver to the Escrow Agent certificates
representing their respective Escrow Securities, to be held and disbursed
subject to the terms and conditions of this Agreement. The Initial Stockholders
and Initial Warrantholder acknowledge and agree that the certificates
representing the Escrow Securities will bear a legend to reflect the deposit of
such Escrow Securities under this Agreement.
3. Disbursement of the Escrow
Securities. The Escrow Agent shall hold each of 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 one
year following the consummation of the initial Business Transaction (as such
term is defined in the Registration Statement) or earlier if, subsequent to the
Business Transaction the Company consummates a subsequent liquidation, merger,
stock exchange or other similar transaction which results in all of the Company
stockholders having the right to exchange their shares of 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 date the certificates
representing the Private Warrants are deposited with the Escrow Agent and ending
30 days following the date of the consummation of the initial Business
Transaction. On the termination date of the applicable Escrow Period, the Escrow
Agent shall, upon written instructions from the Company, disburse the Escrow
Securities to such holders; provided, however, that if the Escrow Agent is
notified by the Company pursuant to Section 6.7 hereof that the Company is (i)
being liquidated at any time during the Escrow Period, or (ii) that up to 83,333
of the Escrow Shares have been forfeited, then the Escrow Agent shall promptly
destroy the certificates representing such Escrow Securities (or
portion thereof, as applicable). 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 Holder in
Escrow Securities.
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 the Escrow
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.
2
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) upon the dissolution and
liquidation of holder
and the distribution of
assets to its members; (ii) by gift to an immediate family member of any Initial
Stockholder or the Initial Warrantholder members or to a trust, the
beneficiary of which is an
immediate family member of such Initial Stockholder or a member of the
immediate family of the
Initial Warrantholder’s members, (iii) by virtue of the laws of
descent and distribution upon death of any Initial Stockholder or any
member of the Initial Warrantholder, (iv) pursuant to a qualified domestic
relations order, (v) in the event of the
Company’s liquidation prior to completion of its initial Business Transaction 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 Transaction; 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 that is transferring the Escrow Shares.
Even if transferred in
accordance with this Section 4.3, the Escrow Securities will remain subject to
this agreement and may be released from escrow only in accordance with Section 3
hereof. During the Escrow Period, the
Initial
Stockholders shall not pledge or grant a security
interest in the Escrow Securities or grant a security interest in its
rights under this Agreement.
4.4. Insider Letters. The
Initial Stockholders have executed a letter agreement with the Representative and the Company, dated as of the
Effective Date, and which is filed as an exhibit to the Registration Statement
(each an “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 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 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.
3
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
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 the Representative, 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 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.
4
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. Entire Agreement.
This Agreement and the Insider Letters contain 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.
6.3. Headings. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation thereof.
6.4. Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their legal representative, successors and
assigns.
6.5. 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
Escrow Agent, to:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx Xxxx,
XX 00000
Attn:
[ ]
Fax No.:
[ ]
if to the
Company, to:
00xx
Xxxxxx General Acquisition Corp.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxx X. Xxxxx
Fax No.:
[ ]
and a
copy, which shall not constitute notice, to:
Ellenoff,
Xxxxxxxx & Schole LLP
000 Xxxx
00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx Xxxxxxxx, Esq.
Fax No.:
(000) 000-0000
5
if to any
Initial Stockholder, to the address set forth in Exhibit A hereto.
if the to
the representative of the underwriters, to:
Xxxxxx
Xxxxxx & Co. Inc.,
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx,
XX 00000
Attn:
General Counsel
Fax No.:
( ) -
with a
copy, to:
XxXxxxxxx
Will & Xxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx X. Xxxxxxxxxx, Esq.
Fax No.:
(000) 000-0000
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.
6.6. Liquidation of Company;
Forfeiture. The Company shall give the Escrow Agent prompt written
notification of (i) the liquidation of the Company in the event that the Company
fails to consummate the initial Business Transaction within the time period
specified in the Prospectus or (ii) forfeiture of up to 83,333 Escrow Shares
held by 00xx Xxxxxx GAC Holdings LLC to the extent the underwriters
over-allotment option is not exercised in full, as further described in the
Registration Statement.
6.7. Trust Account 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 (the “Trust Account”) in which the proceeds of
the initial public offering conducted by the Company pursuant to the Prospectus
(the “IPO”) and the proceeds of the sale of the Private Warrants will be
deposited and held for the benefit of the holders of the securities purchased in
the IPO, as described in greater detail in the Prospectus, and hereby agrees not
to seek recourse, reimbursement, payment or satisfaction for any Claim against
the Trust Account for any reason whatsoever.
6.8. Third Party
Beneficiaries. The Initial Stockholders hereby acknowledge that the
Underwriters, including, without limitation, the Representative, are third party
beneficiaries of this Agreement and this Agreement cannot be modified or changed
without the prior written consent of the Representative.
6
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.
[remainder
of page intentionally left blank]
7
IN
WITNESS WHEREOF, the Company has caused the execution of this Agreement as of
the date first above written.
|
57TH
STREET GENERAL ACQUISITION CORP.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
CONTINENTAL
STOCK TRANSFER
|
|
|
&
TRUST COMPANY
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
INITIAL
HOLDERS
|
|
|
57TH
STREET GAC HOLDINGS LLC
|
|
|
By:
_______________________, a Managing Member
|
|
|
[By:
|
]
|
|
Name:
|
|
8
EXHIBIT
A
|
Investor
|
Investors
Address
and
Facsimile Number
|
|
|
Name:
57th Street GAC Holdings LLC
Number
of Shares: 638,889 (up to 83,333) of which are subject to forfeiture in
the event the underwriters over-allotment option is not exercised in
full)
Number
of Warrants: 3,000,000
|
Attn:
Facsimile
Number:
|
9
EXHIBIT
B
Escrow
Agent Fees
$______
annually for acting agent escrow fee.
First
year agent fee to be paid at closing.
10
