Exhibit 10.3


 


STOCK ESCROW AGREEMENT


 


STOCK ESCROW AGREEMENT, dated as of [_____], 2022 (“Agreement”),
by and among AQUARIUS II ACQUISITION CORP., a Cayman Islands Company (the “Company”), the initial shareholders listed on Exhibit
A attached hereto (each, an “Initial Shareholder” and collectively the “Initial Shareholders”) and AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC, a New York limited liability trust company (the “Escrow Agent”).

 


WHEREAS, the Company has entered into an Underwriting Agreement, dated
as of [ ], 2022 (“Underwriting Agreement”), with and EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”),
acting as the representative of the underwriters (collectively, the “Underwriters”), pursuant to which, among other matters,
the Underwriters have agreed to purchase 6,000,000 units (“Units”) of the Company, plus an additional 900,000 Units if the
Underwriters exercise their over-allotment option in full. Each Unit consists of one ordinary share of the Company, $0.0001 par value
(an “Ordinary Share”), and one redeemable warrant, each redeemable warrant entitling its holder to purchase one Ordinary Share
at an exercise price of $11.50 per Ordinary Share, all as more fully described in the Company’s final Prospectus, dated [           ],
2022 (“Prospectus”), comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-257956) under
the Securities Act of 1933, as amended (“Registration Statement”), declared effective on [            ],
2022 (“Effective Date”).

 


WHEREAS, the Initial Shareholders
have agreed as a condition of the sale of the Units to deposit their Insider Shares (as defined in the Prospectus), 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 Shareholders 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 Shareholders 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 prior to the date hereof, each of the Initial Shareholders delivered to the Escrow Agent certificates representing such Initial
Shareholder’s respective Escrow Shares, together with applicable share powers, to be held and disbursed subject to the terms and
conditions of this Agreement. Each of the Initial Shareholders acknowledges that the certificate representing such Initial Shareholder’s
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 during the period (the “Escrow Period”) commencing on the date hereof and (i) for 100% of the Escrow Shares,
ending 150 calendar days after the date of the consummation of an initial Business Combination and the date on which the closing price
of our Ordinary Share equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations)
for any 20 trading days within any 30-trading day period commencing after the closing of the Company’s initial business Combination
and (ii) six months after the date of the consummation of an initial Business Combination. The Company shall promptly provide written
notice of the consummation of a Business Combination to the Escrow Agent. Upon completion of the Escrow Period, the Escrow Agent shall
disburse such amount of each Initial Shareholder’s Escrow Shares (and any applicable share power) to such Initial Shareholder; 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, however, that if, any time after the Company consummates a Business Combination, the Company (or the surviving entity) subsequently
consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders of such entity
having the right to exchange their Ordinary Shares for cash, securities or other property, then the Escrow Agent will, upon receipt of
a written notice executed by the Chairman of the Board, Chief Executive Officer or other authorized officer of the Company, in form reasonably
acceptable to the Escrow Agent, certifying that such transaction is then being consummated or such conditions have been achieved, as applicable,
release the Escrow Shares to the Initial Shareholders. 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 Notwithstanding Section
3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 900,000 Units of the Company in full within
45 days of the date of the Prospectus (as described in the Underwriting Agreement), the Initial Shareholders agree that the Escrow Agent
shall return to the Company for cancellation, at no cost, the number of Escrow Shares held by each such holder determined by multiplying
(a) the product of (i) 900,000 multiplied by (ii) a fraction, (x) the numerator of which is the number of Escrow Shares held by each such
holder, and (y) the denominator of which is the total number of Escrow Shares, by (b) a fraction, (i) the numerator of which is 900,000
minus the number of Ordinary Shares purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator
of which is 900,000. The Company shall promptly provide written notice to the Escrow Agent of the expiration or termination of the Underwriters’
over-allotment option and the number of Units, if any, purchased by the Underwriters in connection with their exercise thereof.


 


4. Rights of Initial Shareholders
in Escrow Shares.


 


4.1 Voting Rights as a Shareholder.
Subject to the terms of the Insider Letters described in Section 4.4 hereof and except as herein provided, the Initial Shareholders shall
retain all of their rights as shareholders 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 Shareholders, 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 Escrow Period, the only permitted transfers of the Escrow Shares will be (i) to the Company’s pre-IPO shareholders, or
to the Company’s officers, directors, advisors and employees, (ii) if the Initial Shareholder is an entity, as a distribution to
partners, members or shareholders of the Initial Shareholder upon the liquidation and dissolution of the Initial Shareholder, (iii) by
bona fide gift to a member of the Initial Shareholder’s immediate family or to a trust, the beneficiary of which is the Initial
Shareholder or a member of the Initial Shareholder’s immediate family for estate planning purposes, (iv) by virtue of the laws of
descent and distribution upon death of the Initial Shareholder, (v) pursuant to a qualified domestic relations order, (vi) by private
sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Private Units
were originally purchased or (vii) to the Company for cancellation in accordance with Section 3.2 above or in connection with the consummation
of a Business Combination, in each case, except for clause (vii), on the condition that such 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 (as
defined below) signed by the Initial Shareholder transferring the Escrow Shares.


 


4.4 Insider Letters.
Each of the Initial Shareholders has executed a letter agreement with EF Hutton and the Company, dated as indicated on Exhibit A hereto,
and the form of which is filed as an exhibit to the Registration Statement (“Insider Letter”), respecting the rights and obligations
of such Initial Shareholder 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 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
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 Shareholders 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 its own
willful misconduct.


 


5.8 Waiver. The Escrow
Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to any
distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by
and between the Company and the Escrow Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or
satisfaction for any Claim against the Trust Account for any reason whatsoever. 


  






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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 Shareholders hereby acknowledges that EF Hutton is a third party beneficiaries of this Agreement and this Agreement
may not be modified or changed without the prior written consent of EF Hutton.


 


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:


 





Aquarius II Acquisition Corp.


Room 901-903, 9/F, Harbour Centre


25 Harbour Road


Wan Chai, Hong Kong SAR


Attn: Yan Zhang, Chief Executive Officer




 


If to a Shareholder, to his
address set forth in Exhibit A.


 


and if to the Escrow Agent,
to:


 


American Stock Transfer & Trust
Company, LLC


6201 15th Avenue


Brooklyn, NY 11219


Attn: Reorg Department


 


A copy (which copy shall not
constitute notice) sent hereunder shall be sent to:


 


EF Hutton


division of Benchmark Investments, LLC


590 Madison Avenue, 39th Floor


New York, NY 10022


Attn: Sam Fleischman


 


and:


 


Loeb & Loeb LLP


2206-19 Jardine House


1 Connaught Place


Central, Hong Kong SAR


Attn: Lawrence Venick, Esq.


 


and:


 


Hunter Taubman Fischer& Li LLC


48 Wall Street, Suite 1100


New York, NY 10005


Attn: Lou Taubman,
Esq. and Ying Li, 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 specified in the Prospectus.


 


[Signature Page Follows]


 




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IN WITNESS the execution of this Agreement as
of the date first above written.


 


	 	COMPANY:
	 	 	 
	 	AQUARIUS II ACQUISITION CORP.
	 	 	 
	 	By:	 
	 	 	Name: 	Yan Zhang
	 	 	Title:	Chief Executive Officer


 


	 	INITIAL SHAREHOLDERS:
	 	 
	 	Aquarius II Sponsor Limited
	 	 
	 	By:	 
	 	 	Name:	Yan Zhang
	 	 	Title:	Director


 


	 	Yan Zhang
	 	 
	 	 
	 	Chunning Wang
	 	 
	 	 
	 	Ngai Wong
	 	 
	 	 
	 	Steve Ward
	 	 
	 	 
	 	Chi Fai Choi
	 	 
	 	 
	 	Feng Wu
	 	 
	 	 
	 	Ning Zhao
	 	 
	 	 
	 	Di Wu


 


	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	 	 	 
	 	By:	 
	 	Name: 	Michael A. Nespoli
	 	Title:	Executive Director


 




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EXHIBIT A


 


	Name and Address of Initial Shareholder[1]  	 	Number of

Shares	 	 	Date of 

Insider

Letter
	Aquarius II Sponsor Ltd. 	 	 	1,605,000	 	 	[____], 2022
	Yan Zhang 	 	 	30,000	 	 	[____], 2022
	Chunning Wang 	 	 	1,625,000	 	 	[____], 2022
	Ngai Wong 	 	 	20,000	 	 	[____], 2022
	Steve Ward 	 	 	10,000	 	 	[____], 2022
	Chi Fai Choi 	 	 	10,000	 	 	[____], 2022
	Ning Zhao 	 	 	10,000	 	 	[____], 2022
	Feng Wu 	 	 	10,000	 	 	[____], 2022
	Di Wu 	 	 	10,000	 	 	[____], 2022


 


	[1]	The address of each of the individuals is c/o, Aquarius II Acquisition Corp., Room 901-903, 9/F, Harbour Centre, 25 Harbour Road, Wan Chai, Hong Kong SAR.



 


 


 


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