Document:

Exhibit
10.3

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of                             ,
2007 (this “Agreement”) by and among Arcade Acquisition Corp., a Delaware
corporation (the “Company”), the undersigned parties listed as Initial
Stockholders on the signature page hereto (collectively, the “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 Morgan Joseph & Co. Inc. (“Morgan
Joseph”), as representative of the underwriters named therein (collectively,
the “Underwriters”), pursuant to which, among other matters, the Underwriters
have agreed to purchase 6,250,000 units (the “Units”) of the Company. Each Unit
consists of one share of the Company’s common stock, par value $.0001 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 definitive
Prospectus, dated                  ,
2007 (the “Prospectus”) comprising part of the Company’s Registration Statement
on Form S-1 (File No. 333-                )
under the Securities Act of 1933, as amended (the “Registration Statement”),
declared effective on                      ,
2007 (the “Effective Date”); and

WHEREAS, the Initial Stockholders have agreed, as a
condition of the Underwriters’ obligation to purchase the Units pursuant to the
Underwriting Agreement and to offer them to the public, to deposit all of their
shares of Common Stock as set forth opposite their respective names in Schedule
A attached hereto (collectively the “Escrow Shares”), in escrow as
hereinafter provided; and

WHEREAS, the Company has entered into a Warrant
Purchase Agreement with one of the Initial Stockholders (the “Initial
Warrantholder”), dated                    ,
2007 (the “Warrant Purchase Agreement”), pursuant to which the Initial
Warrantholder has agreed to purchase 2,000,000 warrants (the “Founding Director
Warrants”) in a private placement transaction;

WHEREAS, the Initial Warrantholder has agreed as a
condition of the sale of the Founding Director Warrants to deposit the Founding
Director Warrants (together with the Escrow Shares, the “Escrow Securities”),
with the Escrow Agent as hereinafter provided; and

WHEREAS, the Company and the Initial Stockholders
(such term as used herein includes the Initial Warrantholder) desire that the
Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed
as hereinafter provided.

NOW, THEREFORE, 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 prior to the Effective Date, the
Initial Stockholders shall deliver to the Escrow Agent certificates
representing their respective Escrow Securities to be held and disbursed
subject to the terms and conditions of this Agreement. Each Initial Stockholder
acknowledges and agrees that the certificates representing his or her Escrow
Securities will bear a legend reflecting the deposit of such Escrow Securities
under this Agreement.

3.             Disbursement of the Escrow Securities.

3.1           Disbursement of the Escrow
Shares.  The Escrow Agent shall hold
the Escrow Shares until one year from the closing date of a Business
Combination (“Escrow Period”), on which date it shall, upon written
instructions from each Initial Stockholder, disburse each Initial Stockholder’s
Escrow Shares to such Initial 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 the Escrow Agent shall promptly destroy the certificates
representing the Escrow Shares; provided  further, that if, after
the Company consummates a Business Combination, it (or the surviving entity)
subsequently consummates a liquidation, merger, stock exchange or other similar
transaction which results in all of its stockholders 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 notice, executed by the Chairman,
Chief Executive Officer or Chief Financial Officer of the Company, in form
reasonably acceptable to the Escrow Agent, certifying that such transaction is
then being consummated, release the Escrow Shares to the Initial Stockholders.
The Escrow Agent shall have no further duties hereunder after the disbursement
or destruction of the Escrow Shares in accordance with this Section 3.1.

3.2           The Escrow Agent shall hold
the Founding Director Warrants until such time that the Company consummates a
Business Combination (as such term is defined in the Registration Statement);
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 Founding Director Warrants and the Founding Director Warrants
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 Founding Director Warrants in accordance with this
Section 3.2.

4.             Rights of Initial Stockholders in Escrow
Shares.

4.1           Voting Rights as a
Stockholder. Subject to the terms of the Insider Letters 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 Securities except (i) by gift to a member of Initial
Stockholder’s immediate family or to a trust or other entity, the beneficiary
of which is an Initial Stockholder or a member of an Initial Stockholder’s
immediate family, or (ii) by virtue of the laws of descent and distribution
upon death of any Initial Stockholder, (iii) pursuant to a qualified domestic
relations order; provided, however, that such permitted 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 Securities.
During the Escrow Period, the Initial Stockholders shall not pledge or grant a
security interest in the Escrow Securities 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 Morgan Joseph
and the Company, dated as indicated on Schedule 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
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, as set forth on Exhibit A hereto. 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. The Escrow Agent
shall bill the Company on a monthly basis for services rendered.

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 and approved by Morgan Joseph,
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 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 Company and a majority
of the Initial Stockholders, 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. Each of the
parties hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced
in the courts of the State of New York or the United States District Court for
the Southern District of New York (each, a “New York court”), and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. Each of
the parties hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenient forum.

6.2           Third-Party Beneficiaries.
Each of the Initial Shareholders hereby acknowledges that Morgan Joseph is a
third-party beneficiary of this Agreement and this Agreement may not be
modified or changed without the prior written consent of Morgan Joseph.

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 by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or, if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two business days after the date of
mailing, as follows:

	
  If to the Company, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Arcade
  Acquisition Corp.

  	
   

  
	
   

  	
  c/o Arcade
  Partners, LLC

  	
   

  
	
   

  	
  62 La Salle
  Road, Suite 304

  	
   

  
	
   

  	
  West Hartford,
  CT 06107

  	
   

  
	
   

  	
  Phone:
  860-236-6320

  	
   

  
	
   

  	
  Fax:
  860-236-6325

  	
   

  
	
   

  	
  Attn: John
  Chapman

  	
   

  
	
   

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

  

 

 

	
  

  	
  and if to the Escrow
  Agent, to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Continental
  Stock Transfer & Trust Company

  	
   

  
	
   

  	
  17 Battery Place

  	
   

  
	
   

  	
  New York, New
  York 10004

  	
   

  
	
   

  	
  Attn: Felix
  Orihuela, Vice President and Senior Account Executive

  
	
   

  	
   

  	
   

  
	
   

  	
  A copy of any
  notice sent hereunder shall be sent to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Loeb & Loeb
  LLP

  	
   

  
	
   

  	
  345 Park Avenue

  	
   

  
	
   

  	
  New York, New
  York 10154

  	
   

  
	
   

  	
  Attn: Fran
  Stoller, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Morgan Joseph
  & Co. Inc.

  	
   

  
	
   

  	
   

  	
  600 Fifth Avenue

  	
   

  
	
   

  	
   

  	
  19th Floor

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10020

  	
   

  
	
   

  	
   

  	
  Attn: Tina
  Pappas

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kramer Levin Naftalis
  & Frankel LLP

  	
   

  
	
   

  	
   

  	
  1177 Avenue of
  the Americas

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10036

  	
   

  
	
   

  	
   

  	
  Attn:
  Christopher Auguste, 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 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           Waiver.  Notwithstanding anything herein to the
contrary, the Escrow Agent hereby waives any and all right, title, interest or
claim of any kind (“Claim”) in or to any distribution of the Trust Account, and
hereby agrees not to seek recourse, reimbursement, payment or satisfaction for
any Claim against the Trust Account for any reason whatsoever.

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

	
  

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Jonathan Furer

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL STOCK TRANSFER

  
	
   

  	
  & TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  

  	
  INITIAL
  STOCKHOLDERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jonathan Furer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John Chapman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASIF RAHMAN
  TR0UST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEENA RAHMAN
  TRUST

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RAHMAN FAMILY
  TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCADE ACQUISITION INVESTORS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit Rahman, Managing Member

  
	
   

  	
   

  	
   

  

SCHEDULE A

	
  Name and Address of

  Initial Stockholder

  	
   

  	
  Number of

  Common

  Shares

  	
   

  	
  Number of

  Warrants

  	
   

  
	
  Jonathan Furer

  	
   

  	
  420,833

  	
   

  	
  0

  	
   

  
	
  John Chapman

  	
   

  	
  420,833

  	
   

  	
  0

  	
   

  
	
  Asif Rahman
  Trust

  	
   

  	
  150,000

  	
   

  	
  0

  	
   

  
	
  Deena Rahman
  Trust

  	
   

  	
  150,000

  	
   

  	
  0

  	
   

  
	
  Rahman Family
  Trust

  	
   

  	
  120,833

  	
   

  	
  0

  	
   

  
	
  Arcade
  Acquisition Investors, LLC

  	
   

  	
  300,001

  	
   

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  1,562,500

  	
   

  	
  2,000,000

  	
   

  

 

EXHIBIT A

Escrow Agent FeesExhibit 10.4

ARCADE ACQUISITION
CORP.

                         ,
2007

Arcade Partners, LLC

62 La Salle Road, Suite 304

West Hartford, CT  06107

Gentlemen:

This
letter will confirm our agreement, that commencing on the effective date (the “Effective
Date”) of the registration statement (the “Registration Statement”)
relating to the initial public offering of the securities of Arcade Acquisition
Corp. (the “Company”) and continuing until the consummation by the
Company of a “Business Combination” (as described in the Registration
Statement), Arcade Partners, LLC and its principals (collectively, the “Firm”)
shall make available to the Company certain technology and administrative
services, as well as the use of certain limited office space and equipment, as
may be required by the Company from time to time, situated at 62 La Salle Road,
Suite 304, West Hartford, Connecticut 06107 (or any other locations or
successor location).  In exchange
therefor, the Company shall pay to the Firm the sum of $7,500 per month.

	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Jonathan Furer 

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

	
  Agreed to and Accepted by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARCADE PARTNERS, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Managing Member

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