EX-10.3: FORM OF SECURITIES ESCROW AGREEMENT

EX-10.3 9 y30312a1exv10w3.txt EX-10.3: FORM OF SECURITIES ESCROW AGREEMENT Exhibit 10.3 SECURITIES ESCROW AGREEMENT SECURITIES ESCROW AGREEMENT, dated as of ____________ __, 2007 ("Agreement"), by and among the parties listed under Existing Stockholders on Exhibit A hereto (each an "Existing Stockholder" and collectively the "Existing Stockholders"), INTER-ATLANTIC FINANCIAL, INC., a Delaware company ("the Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation ("Escrow Agent"). WHEREAS, the Company has entered into an Underwriting Agreement, dated __________ __, 2007 ("Underwriting Agreement"), with Morgan Joseph & Co. Inc. acting as representative ("Representative") of the several underwriters (collectively, the "Underwriters"), pursuant to which, among other matters, the Underwriters have agreed to purchase 7,500,000 (8,625,000 if the over-allotment is exercised in full) units ("Units") of the Company (such offering of Units, the "Offering"). Each Unit consists of one share of the Company's Common Stock, par value $.0001 per share ("Share"), and one Warrant, each Warrant to purchase one Share, 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. 333-140690) under the Securities Act of 1933, as amended ("Registration Statement"), declared effective on ___________ __, 2007 ("Effective Date"). WHEREAS, each Existing Stockholder has agreed as a condition of the sale of the Units to deposit its Shares of the Company, as set forth opposite its name in Exhibit A attached hereto (collectively "Escrow Shares"), in escrow as hereinafter provided. WHEREAS, certain of the Existing Stockholders (as set forth in Exhibit B attached hereto) have agreed to purchase Warrants (the "Founders' Warrants") in a private placement immediately prior to the consummation to the offering and have further agreed as a condition of the sale of the Units to deposit their respective Founders' Warrants, as set forth opposite each of their respective names in Exhibit B attached hereto (collectively, the "Escrow Warrants" and together with the Escrow Shares, the "Escrow Securities"), in escrow as hereinafter provided. WHEREAS, the Company and the Existing 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 Existing 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, the Existing Stockholders shall deliver to the Escrow Agent a certificate, or certificates, representing their respective Escrow Securities, to be held and disbursed subject to the terms and conditions of this Agreement. The Existing Stockholders acknowledge that the certificates representing their respective Escrow Securities are legended to reflect the deposit of such Escrow Securities under this Agreement. 3. Disbursement of the Escrow Securities. The Escrow Agent shall hold (a) the Escrow Shares until one year from the date of consummation of a Business Combination (as such term is defined in the Registration Statement) ("Share Escrow Period") and (b) the Founders' Warrants until the Consummation of a Business Combination (the "Warrant Escrow Period"), on which date it shall, upon written instructions from an Existing Stockholder, disburse Escrow Shares or the Founders' Warrants, as applicable, to such Existing 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 immediately prior to the effectiveness of such liquidation, the Escrow Agent shall promptly destroy the certificates representing the Escrow Securities and the Escrow Securities shall no longer be considered issued and outstanding securities of the Company. 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 Holders of Escrow Securities. 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 Existing Stockholders shall with respect to the Escrow Shares 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 Share Escrow Period, all dividends payable in cash with respect to the Escrow Shares shall be paid to the Existing Stockholders, but all dividends payable in shares 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 Share Escrow Period and the Warrant Escrow Period, as applicable, no sale, transfer or other disposition may be made of any or all of the Escrow Securities except (i) by gift to an immediate family member of an Existing Stockholder or to a trust, the beneficiary of which is a member of the immediate family of an Existing Stockholder (ii) by virtue of the laws of descent and distribution upon death of any Existing 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 an Existing Stockholder transferring the Escrow Securities. During the Share Escrow Period and the Warrant Escrow Period, as applicable, the Existing Stockholders shall not pledge or grant a security interest in the Escrow Shares or Escrow Warrants, as applicable, or grant a security interest in its rights under this Agreement. 4.4 Insider Letters. The Existing Stockholders have executed a letter agreement with the Representative 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 Existing Stockholders 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 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 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 Existing 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 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, 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. The Existing Stockholders hereby acknowledge 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 the Representative. 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: Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Attn: Andrew Lerner, Chief Executive Officer If to an Existing Stockholder, to his address set forth in Exhibit A. and if to the Escrow Agent, to: American Stock Transfer & Trust Company 59 Maiden Lane Plaza Level New York, New York 10038 Attn: Herb Lemmer, Vice President A copy of any notice sent hereunder shall be sent to: Morgan Joseph & Co. Inc. 600 Fifth Avenue, 19th Floor New York, New York 10020 Attn: Dennis Galgano Fax No.: (212) 218-3760 and: DLA Piper US LLP 1251 Avenue of the Americas New York, New York 10020-1104 Attn: William Haddad, Esq. Fax No.: (212) 835-6001 and: Morrison & Foerster LLP 1290 Avenue of the Americas New York, New York 10104-0050 Attn: John Hempill, Esq. Fax: (212) 468-7900 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. 6.8 Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, this Securities Escrow Agreement has been duly executed by the parties hereto as of the date first above written. INTER-ATLANTIC FINANCIAL, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXISTING STOCKHOLDERS: INTER-ATLANTIC MANAGEMENT SERVICES, INC. By: ------------------------------------ Title: --------------------------------- THE STEPHEN AND LINDA GALASSO FAMILY TRUST By: ------------------------------------ Title: --------------------------------- ---------------------------------------- D. James Daras ---------------------------------------- Andrew S. Lerner ---------------------------------------- Brett G. Baris ---------------------------------------- Frederick S. Hammer ---------------------------------------- P. Carter Rise ---------------------------------------- Mathew D. Vertin ---------------------------------------- Robert M. Lichten AMERICAN STOCK TRANSFER & TRUST COMPANY By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT A
Stock Date of Name and Address of Number Certificate Insider Existing Stockholder of Shares Number Letter - -------------------- --------- ----------- ------- Inter-Atlantic Management Services 4,688 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 D. James Daras 225,000 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Andrew S. Lerner and Family 450,000 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Brett G. Baris 225,000 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 The Stephen and Linda Galasso Family Trust 281,250 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Frederick S. Hammer 225,000 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Robert M. Lichten 225,000 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 P. Carter Rise 119,531 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017 Matthew D. Vertin 119,531 c/o Inter-Atlantic Financial, Inc. 400 Madison Avenue New York, New York 10017