STOCK ESCROW AGREEMENT
STOCK ESCROW AGREEMENT, dated as of _____________, 2007
("Agreement"), by and among CHINA OPPORTUNITY ACQUISITION CORP., a Delaware
corporation ("Company"), XXXXX XXXXXXX, XXXXX XXXXXXX, XXXX XXXX, XXXX-XXXXX
XXX, XXXXXX XXXXX, XXXX XX and CHINA INVESTMENT GROUP (collectively "Initial
Stockholders") and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York
corporation ("Escrow Agent").
WHEREAS, the Company has entered into an Underwriting Agreement,
dated __________, 2007 ("Underwriting Agreement"), with EarlyBirdCapital, Inc.
("EBC") acting as representative of the several underwriters (collectively, the
"Underwriters"), pursuant to which, among other matters, the Underwriters have
agreed to purchase 6,000,000 units ("Units") of the Company. Each Unit consists
of one share of the Company's common stock, par value $.0001 per share ("Common
Stock"), and two Warrants, each Warrant to purchase one share of Common Stock,
all as more fully described in the Company's final Prospectus, dated _________,
2007 ("Prospectus") comprising part of the Company's Registration Statement on
Form S-1 (File No. 333-137716) under the Securities Act of 1933, as amended
("Registration Statement"), declared effective on ________, 2007 ("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 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. The Escrow Agent shall hold the
Escrow Shares until one year after the consummation of a Business Combination
(as defined in the Registration Statement) ("Escrow Period"), on which date it
shall, upon written instructions from each Initial Stockholder, disburse each of
the Initial Stockholder's Escrow Shares (and any applicable stock power) to such
Initial Stockholder; provided, however, that if the Company consummates a
Business Combination in which holders of more than 20% of the shares sold in the
IPO exercise their conversion rights (as described more fully in the
Prospectus), Xxxxx Xxxxxxx and Xxxx-Xxxxx Xxx agree that the Escrow Agent shall return
to the Company for cancellation a number of Escrow Shares held by them so that
the Initial Stockholders will collectively own no more than 23.81% of the
Company's outstanding Common Stock upon consummation of such Business
Combination (without giving effect to any shares that may be issued in the
Business Combination). 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, however, 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 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 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.
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.
4.4 Insider Letters. Each of the Initial Stockholders has executed
a letter agreement with EBC 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
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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 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
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.
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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, without giving effect to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction.
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 EBC.
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:
China Opportunity Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chairman
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
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A copy of any notice sent hereunder shall be sent to:
and:
EarlyBirdCapital, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Chairman
and:
Xxxxxxxx Xxxxxx
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxx Xxxxxx, Esq.
and:
Blank Rome LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, 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 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.
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WITNESS the execution of this Agreement as of the date first
above written.
CHINA OPPORTUNITY ACQUISITION CORP.
By: _______________________________
Name:
Title:
INITIAL STOCKHOLDERS:
_______________________________
Xxxxx Xxxxxxx
_______________________________
Xxxxx Xxxxxxx
_______________________________
Xxxx Xxxx
_______________________________
Xxxx-Xxxxx Xxx
_______________________________
Xxxxxx Xxxxx
_______________________________
Daxi Li
CHINA INVESTMENT GROUP
By: _______________________________
Name:
Title:
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CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:________________________________
Name:
Title:
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EXHIBIT A
Name and Address of Number Stock Date of
Initial Stockholder of Shares Certificate Number Insider Letter
------------------- --------- ------------------ ---------------
Xxxxx Xxxxxxx 1,100,000 0 Xxxxxx 00, 0000
Xxxxx Opportunity Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx 70,000 0 Xxxxxx 00, 0000
Xxxxx Opportunity Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx Xxxx 70,000 0 Xxxxxx 00, 0000
Xxxxx Opportunity Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx-Xxxxx Xxx 100,000 0 Xxxxxx 00, 0000
Xxxxx Opportunity Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx Xxx 60,000 5 November 2, 2006
Daxi Li 60,000 0 Xxxxxx 00, 0000
Xxxxx Investment Group 40,000 7 August 15, 2006
