STOCK ESCROW AGREEMENT
EXHIBIT
10.4
STOCK
ESCROW AGREEMENT, dated as of ___________ ___, 2005 (“Agreement”) by and among
Everest Acquisition Corporation, 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 a Letter of Intent, dated June 16, 2005
(“Underwriting Agreement”) with Jesup & Xxxxxx Securities Corporation
(“Jesup & Xxxxxx”) acting as representative of the several underwriters
(collectively, the “Underwriters”), pursuant to which, among other matters, the
Underwriters have agreed to purchase 800,000,000 units (“Units”) of the Company.
Each Unit consists of one share of the Company’s Common Stock, par value $.0001
per share, and two Warrants, 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-________) 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 sale of the Units
to
deposit their shares of Common Stock of the Company, as set forth opposite
their
respective names in Exhibit A attached hereto (collectively “Escrow Shares”), 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 Shares.
On or
before the Effective Date, each of the Initial Stockholders shall deliver to
the
Escrow Agent certificates representing his or her respective Escrow Shares,
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 Shares is legended to reflect the deposit of such Escrow Shares
under
this Agreement.
3. Disbursement
of the Escrow Shares.
The
Escrow Agent shall hold the Escrow Shares until the first anniversary of the
completion by the Company of a business combination (“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 6.7 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 Shares; provided further, that if, after the Company
consummates a Business Combination (as such term is defined in the Registration
Statement), 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
consummation of such transaction, release the Escrow Shares to the Initial
Stockholders 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,
(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 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.
4.4. Insider
Letters.
Each of
the Initial Stockholders has executed a letter agreement with Jesup & 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 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.
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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. 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, 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 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.
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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. Third
Party Beneficiaries.
Each of
the Initial Stockholders hereby acknowledges that the Underwriters are third
party beneficiaries of this Agreement and this Agreement may not be modified
or
changed without the prior written consent of Jesup & Xxxxxx.
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 be mailed, certified or
registered mail, or by private national courier service, return receipt
requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, two days after the date of mailing, as
follows:
If
to the
Company, to:
Everest
Acquisition Corporation
15/F,
The
Hong Kong Club Xxxxxxxx
0X
Xxxxxx
Xxxx Xxxxxxx
Xxxx
Xxxx
Attn: Xxxxx
X.
Xxxxxxx, Chief Executive Officer
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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: Chairman
A
copy of
any notice sent hereunder shall be sent to:
Xxxxxxxxx
Xxxxxxx LLP
MetLife
Building
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
X.
Annex, Esq.
and:
Jesup
& Xxxxxx Securities Corporation
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx XxXxxxx
and:
Xxxxxx
Xxxx & Priest LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X.
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.
6.7. 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.
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WITNESS
the execution of this Agreement as of the date first above written.
EVEREST
ACQUISITION CORPORATION
By:
_________________________________
Xxxxx
X.
Xxxxxxx, Chief Executive Officer
INITIAL
STOCKHOLDERS:
________________________
Xxxxx
X.
Xxxxxxx
________________________
X.
Xxxx
McAfee
________________________
Xxxxxxxx
Xxxx
________________________
Xxxx
Xxxxxxx
________________________
Po
Xxxx
Xxx
CONTINENTAL
STOCK TRANSFER
&
TRUST COMPANY
By:________________________________
Name:
Xxxxxx X. Xxxxxx
Title:
Chairman
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EXHIBIT
A
|
Name
and Address of
Initial
Stockholder
|
Number
of
Shares
|
Stock
Certificate
Number
|
Date
of
Insider
Letter
|
|||||||
| Xxxxx X. Xxxxxxx(1) | 1,500,000 | 1 | August 4, 2005 | |||||||
| X. Xxxx McAfee(1) | 1,500,000 | 0 | Xxxxxx 0, 0000 | |||||||
| Xxxxxxxx Xxxx (1) | 400,000 | 3 | August 4, 2005 | |||||||
| Xxxx Xxxxxxx(1) | 400,000 | 4 | Xxxxxx 0, 0000 | |||||||
| Xx Xxxx Xxx(1) | 200,000 | 5 | August 4, 2005 | |||||||
| (1) |
The
business address of each of such individuals is 15/F, The Hong Xxxx
Xxxx
Xxxxxxxx, 0X Xxxxxx Xxxx Xxxxxxx, Xxxx
Xxxx.
|
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