Exhibit 10.3
STOCK ESCROW AGREEMENT
This STOCK ESCROW AGREEMENT is made as of ____ _, 2007 (the
"AGREEMENT"), by and among CHINA PACIFIC ACQUISITION CORP., a Delaware
corporation (the "COMPANY"), DATO' SIN JUST XXXX, an individual residing in the
Special Administrative Region of Hong Kong and XXXXXXX XXXXXXXX, an individual
residing in the State of California (collectively "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
____, 2007 (the "UNDERWRITING AGREEMENT"), with X.X. Xxxxxxxxx + Co, LLC acting
as representative of the several underwriters (collectively, the
"UNDERWRITERS"), pursuant to which, among other matters, the Underwriters have
agreed to purchase up to 8,625,000 units (the "UNITS") of the Company. Each Unit
consists of one share of the Company's Common Stock, par value $.0005 per share
(the "COMMON STOCK"), and one Warrant, each Warrant to purchase one share of
Common Stock, all as more fully described in the Company's final Prospectus,
dated _____________ 2007 (the "PROSPECTUS") comprising part of the Company's
Registration Statement on Form S 1 (File No. _________) under the Securities Act
of 1933, as amended (the "REGISTRATION STATEMENT"), declared effective on
__________ 2008 (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 and their
Warrants to Purchase Common Stock of the Company, as set forth opposite their
respective names in EXHIBIT A-1 attached hereto (the "FOUNDERS' SECURITIES") AND
EXHIBIT A-2 attached hereto (the "PRIVATE PLACEMENT SECURITIES", and
collectively with the Founders' Securities, the "ESCROW SECURITIES"), in escrow
as hereinafter provided.
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 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 SECURITIES. On or before the Effective Date,
each of the Initial Stockholders shall deliver to the Escrow Agent certificates
representing his respective Escrow Securities, to be held and disbursed subject
to the terms and conditions of this Agreement. Each Initial Stockholder
acknowledges that the certificate representing his Escrow Securities is legended
to reflect the deposit of such Escrow Securities under this Agreement.
3. DISBURSEMENT OF THE ESCROW SECURITIES. The Escrow Agent shall
hold the Private Placement Securities until six months after the consummation of
the initial business combination (as such
term is defined in the Prospectus), such period during which the securities in
question shall remain subject to this Agreement, the "ESCROW PERIOD"), on which
respective date it shall, upon written instructions from each Initial
Stockholder, disburse each of the Initial Stockholder's Escrow Securities to
such Initial Stockholder; provided, however, that 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 Securities and;
provided further, 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 Securities 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 Securities in accordance with this Section 3.
4. Rights of Initial Stockholders in Escrow Securities.
4.1 VOTING RIGHTS AS A STOCKHOLDER. 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 any Escrow
Securities entitled to vote.
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 (the "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.
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) 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.
4.4 INSIDER LETTERS. Each of the Initial Stockholders has
executed a letter agreement with X.X. Xxxxxxxxx + Co, LLC and the Company,
dated as of [________], 2007, 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.
2.
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.
5.3 COMPENSATION. The Escrow Agent shall be entitled to
receive two hundred dollars ($200) per month for all services rendered by it
hereunder. The Escrow Agent shall also be entitled to reimbursement from the
Company for all reasonable 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.
3.
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 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.
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 X X Xxxxxxxxx & Co, LLC.
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 Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
Attention: Dato' Sin Just Xxxx, Chairman of the Board of
Directors and Chief Executive Officer
4.
With a copy to:
Reitler Xxxxx & Xxxxxxxxxx LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx Xxxxx, Esq.
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
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 Registration Statement.
5.
WITNESS the execution of this Agreement as of the date first above
written.
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By:
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Name:
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Title:
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INITIAL STOCKHOLDERS:
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By:
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Name:
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Title:
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6.
WITNESS the execution of this Agreement as of the date first above written.
INITIAL STOCKHOLDERS:
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DATO' SIN JUST XXXX
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XXXXXXX XXXXXXXX
7.
EXHIBIT A-1
NAME AND ADDRESS OF NUMBER OF STOCK NUMBER OF
INITIAL STOCKHOLDER COMMON STOCK CERTIFICATE NUMBER WARRANTS
----------------------------------- ------------ ------------------ ---------
Dato' Sin Just Xxxx 1,078,125 [_______] 0
China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
----------------------------------- ------------ ------------------ ---------
Xxxxxxx XxXxxxxx 1,078,125 [_______] 0
China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
EXHIBIT A-2
NAME AND ADDRESS OF NUMBER OF STOCK NUMBER OF
INITIAL STOCKHOLDER COMMON STOCK CERTIFICATE NUMBER WARRANTS
----------------------------------- ------------ ------------------ ---------
Dato' Sin Just Xxxx 0 [________] 600,000
China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
----------------------------------- ------------ ------------------ ---------
Xxxxxxx XxXxxxxx 0 [________] 600,000
China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
