STOCK ESCROW AGREEMENT
Exhibit
10.3
STOCK
ESCROW AGREEMENT, dated as of ____________, 2006 (the "Agreement"), by and
among
CROSSFIRE CAPITAL CORPORATION, a Delaware corporation (the "Company"),
The
Xxxxxx
Xxxxxx 2000
Family Trust, Xxxxx X. Xxxxxxxxx,
Ian
X.X. Xxxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx (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 ____, 2006 (the
"Underwriting Agreement"), with Xxxxxx, Xxxxx Xxxxx, Incorporated ("FBW") acting
as the representative
of the underwriters
(the
"Underwriters"),
pursuant to which, among other matters, the Underwriters
have
agreed
to purchase 10,000,000 units (the "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 final Prospectus, dated ________, 2006 (the
"Prospectus") comprising part of the Company's Registration Statement on Form
S-1 (File No. 333-133447)
under
the Securities Act of 1933, as amended (the "Registration Statement"), declared
effective on __________, 2006 (the "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, the "Escrow
Shares"), in escrow as hereinafter provided; and
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.
NOW,
THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the parties agree
as follows:
1.
APPOINTMENT OF THE 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. Capitalized terms used
in
this Agreement but not defined herein will have the meanings set forth in the
Registration Statement.
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
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 Escrow Shares is legended to reflect the deposit
of
such Escrow Shares under this Agreement.
3. DISBURSEMENT
OF THE ESCROW SHARES.
3.1
The Escrow Agent shall hold the Escrow Shares until the one hundred
eightieth day following the consummation by the Company of a Business
Combination (the "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 3.3 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, however, that if, after the Company consummates a
Business Combination (as such term is defined in the Prospectus),
it (or
the surviving entity) subsequently consummates a liquidation, merger, stock
exchange or other similar transaction which results in all of the 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 certificate, executed by the Chief Executive Officer or Chief Financial
Officer of the Company, in form reasonably acceptable to the Escrow Agent,
that
such transaction is then being consummated, release the Escrow Shares to the
Initial Stockholders upon consummation of the transaction 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.
3.2
CONSUMMATION OF A BUSINESS COMBINATION. Within thirty (30) days after the
consummation by the Company of a Business Combination, the Company shall deliver
to the Escrow Agent a certificate executed by the Chief Executive Officer or
the
Chief Financial Officer, in form reasonably acceptable to the Escrow Agent,
stating that a Business Combination has been consummated, the date of the
Business Combination shall have been consummated and the date that is one
hundred eighty days after the date of consummation of a Business
Combination.
3.3
LIQUIDATION OF THE 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.
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, 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.
2
4.4
INSIDER LETTERS. Each of the Initial Stockholders has executed a letter
agreement with FBW and the Company, dated as indicated on Exhibit A
hereto, a
form
of
which
has
been
filed as
an exhibit to the Registration Statement (the "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 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
Section
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. 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 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
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.
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
FBW.
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.
4
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:
Crossfire
Capital Corporation
000
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxx
If
to a
Stockholder, to his 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,
XX 00000
Attn:
Xxxxx Xxxxxx
A
copy of
any notice sent hereunder shall be sent to:
Davies
Xxxx Xxxxxxxx & Xxxxxxxx LLP
000
Xxxxxxx Xxxxxx, 00 Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxx Xxxxx, Esq.
Xxxxxx,
Xxxxx Xxxxx, Inc.
0000
Xxxxxxxxxxx Xxxx, Xxxxx 000
XxXxxx,
XX 00000
Attn:
Xxxxx
XxXxxxx
and:
Xxxxxxx
Savage LLP
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxx
X.
Xxxxxxxxx,
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.
5
6.7 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, taken
together, will be deemed to constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective
as of the date first aforesaid.
CROSSFIRE
CAPITAL CORPORATION
By:
__________________________________
Name:
Xxxxxx Xxxxxx
Title:
President
INITIAL
STOCKHOLDERS:
The
Xxxxxx
Xxxxxx 2000
Family Trust
By: __________________________________
Xxxx
Xxxxxx, Trustee
________________________________
Xxxxx
X.
Xxxxxxxxx
________________________________
Ian
X.X.
Xxxxxxx
________________________________
Xxxxx
X.
Xxxxxx
________________________________
Xxxxxxx
X. Xxxxxxx
AMERICAN
STOCK TRANSFER & TRUST COMPANY
By:
__________________________________
Name:
Title:
6
EXHIBIT
A
Name
and Address of
Initial
Stockholder
|
Number
of
Shares
|
Stock
Certificate
Number
|
Date
of
Insider
Letter
|
The
Xxxxxx
Xxxxxx 2000 Family
Trust
|
2,250,000
|
__,
0000
|
|
Xxxxx
X. Xxxxxxxxx
|
62,500
|
__,
2006
|
|
Ian
X. X. Xxxxxxx
|
62,500
|
__,
2006
|
|
Xxxxx
X. Xxxxxx
|
62,500
|
__,
2006
|
|
Xxxxxxx
X. Xxxxxxx
|
62,500
|
__,
2006
|
|
7