STOCK ESCROW AGREEMENT
EXHIBIT
10.4
STOCK
ESCROW AGREEMENT, dated as of ___________ ___, 2005 (“Agreement”) by and among
Phoenix India Acquisition Corp., a Delaware corporation (“Company”), the
undersigned parties listed as Initial Stockholders on the signature page hereto
(collectively, the “Initial Stockholders”) and American Stock Transfer &
Trust Company, a New York corporation (“Escrow Agent”).
WHEREAS,
the Company has entered into an Underwriting Agreement, dated _______ __, 2005
(“Underwriting Agreement”) with Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”), pursuant
to which, among other matters, Xxxxxx has agreed to purchase 12,500,000 units
(“Units”) of the Company. Each Unit consists of one share of the Company’s
Common Stock, par value $.0001 per share, and one Warrant, each Warrant to
purchase one share of Common Stock, all as more fully described in the Company’s
definitive Prospectus, dated ________ __, 2005 (“Prospectus”) comprising part of
the Company’s Registration Statement on Form S-1 (File No. 333-128008) under the
Securities Act of 1933, as amended (“Registration Statement”), declared
effective on ________ __, 2005 (“Effective Date”).
WHEREAS,
the Initial Stockholders have agreed as a condition of the Xxxxxx’x obligation
to purchase the Units pursuant to the Underwriting Agreement and to offer them
to the public to deposit all of their units of the Company, such units
consisting of one share of Common Stock of the Company, par value $.0001 per
share, and one warrant to purchase one share of common stock of the Company,
as
set forth opposite their respective names in Exhibit A attached hereto
(collectively “Escrow Units”), 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.
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 Units.
On or
before the Effective Date, each of the Initial Stockholders shall deliver to
the
Escrow Agent certificates representing his or her respective Escrow Units,
to be
held and disbursed subject to the terms and conditions of this Agreement. Each
Initial Stockholder acknowledges that the certificate representing his or her
Escrow Units is legended to reflect the deposit of such Escrow Units under
this
Agreement.
3. Disbursement
of the Escrow Units.
The
Escrow Agent shall hold the Escrow Units until the first anniversary of the
completion by the Company of a Business Combination (as such term is defined
in
the Registration Statement) or such earlier date as the Escrow Agent is notified
by the Company either that the Business Combination involved a change of
control, or that the Company's stockholders (other than the Initial
Stockholders) have voted to approve the release of the Escrow Units. For
purposes of this Section 3, a "change in control" shall ean a consolidation
or merger where stockholders of the Company immediately prior to such
transaction hold less than 50% of the voting stock of the surviving entity.
(“Escrow Period”), on which date it shall, upon written instructions from the
Company or each Initial Stockholder, disburse each of the Initial Stockholder’s
Escrow Units to such Initial Stockholder. Notwithstanding the foregoing, 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 Units. The Escrow Agent shall have no further duties hereunder after
the disbursement or destruction of the Escrow Units in accordance with this
Section 3.
4. Rights
of Initial Stockholders in Escrow Units.
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 Units.
During
the Escrow Period, all dividends payable in cash with respect to the Escrow
Units 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 Units 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,
(ii) by virtue of the laws of descent and distribution upon death of any Initial
Stockholder, or (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 Units. During the Escrow Period, the Initial
Stockholders shall not pledge or grant a security interest in the Escrow Units
or grant a security interest in their rights under this Agreement.
4.4. Insider
Letters.
Each of
the Initial Stockholders has executed a letter agreement with Xxxxxx and the
Company, dated as indicated on Exhibit 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
2
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 Units 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 Units or it may deposit the Escrow Units with the clerk of any
appropriate court or it may retain the Escrow Units 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 Units 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 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 Xxxxxx, the
Escrow Units 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 Units with any court it deems
appropriate.
3
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. 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.
6.3. 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 representatives, 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
Company, to:
000
Xxxxx
Xxxxxx, Xxxxx 000
Xxx
Xxxx,
XX 00000
Attn: Xxxxxx
Xxxxxx, President and Chief Strategy Officer
If
to a
Stockholder, to his address set forth in Exhibit A.
and
if to
the Escrow Agent, to:
4
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx
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:
Xxxxxx
& Xxxxxxx, LLC
1270
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
Xxxxx, CFO
and:
Xxxxxxx
Xxxxxx LLP
000
Xxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx
Xxxxxx, 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.
6.6. 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.
5
WITNESS
the execution of this Agreement as of the date first above written.
By:
Name:
Title
INITIAL
STOCKHOLDERS:
______________________________________
Xxxx
Xxxxxxxx
______________________________________
Xxxxxx
Xxxxxx
______________________________________
Xxxxxxx
Xxxxxxx
______________________________________
Xxxxx
Xxxxxxxxxx
______________________________________
Xxxxx
Xxxxxx
______________________________________
Xxxxx
Xxxxxx
______________________________________
Xxxxxxxxxx
Xxxxxxxxx
______________________________________
Xxxxx
Xxxxxxxxxx
______________________________________
Xxx
Xxxxxxxx-Xxxxxxxxxx
______________________________________
Xxxxx
Xxxxxxxxxx, on behalf of Xxxxxx Xxxxxxxxxx-Xxxxxxxx
______________________________________
Xxxxx
Xxxxxxxxxx, on behalf of Xxxxxxxx Xxxxxxxxxx-Xxxxxxxx
THE
MORNINGSTAR TRUST
______________________________________
Trustee
THE
SUNRISE TRUST
______________________________________
Trustee
THE
XXXX
TRUST
______________________________________
Trustee
THE
AURORA TRUST
______________________________________
Trustee
AMERICAN
STOCK TRANSFER & TRUST COMPANY
By:
Name:
Title:
6
EXHIBIT
A
|
Name of
Initial
Stockholder
|
Number
of
Shares
|
Stock
Certificate
Number
|
Date
of
Insider
Letter
|
|
|
||||||
|
Xxxxx
Xxxxxx
|
20,000
|
|
||||
|
Xxxxx
Xxxxxx
|
20,000
|
|
||||
|
Xxxxxxxxxx
Xxxxxxxxx
|
20,000
|
|
||||
|
Xxxxxx
Xxxxxx
|
838,439
|
|
||||
|
Xxxx
Xxxxxxxx
|
742,187
|
|
||||
|
Xxxxx
Xxxxxxxxxx
|
15,000
|
|
||||
|
Xxx
Xxxxxxxx-Xxxxxxxxxx
|
15,000
|
|
||||
|
Xxxxx
Xxxxxxxxxx, as Custodian for,
|
|
|
||||
|
Xxxxxx
Xxxxxxxxxx-Xxxxxxxx
|
15,000
|
|
||||
|
Xxxxxxxx
Xxxxxxxxxx-Xxxxxxxx
|
15,000
|
|
||||
|
Xxxxx
Xxxxxxxxxx
|
682,187
|
|
||||
|
The
Morningstar Trust
|
74,219
|
|
||||
|
The
Sunrise Trust
|
74,219
|
|
||||
|
The
Xxxx Trust
|
296,874
|
|
||||
|
The
Aurora Trust
|
296,875
|
|
7
EXHIBIT
B
Escrow
Agent Fees
8
