Document:

Unassociated Document

SHARE ESCROW AGREEMENT

STOCK ESCROW AGREEMENT, dated as of ________, 2011 (“Agreement”), by and among CHINA RESOURCES DEVELOPMENT INC., a Cayman Islands company (“Company”), SENG LEONG LEE, GLOBAL STRATEGIC PARTNERS LIMITED and ___________ (collectively “Initial Shareholders”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).

WHEREAS, the Company has entered into an Underwriting Agreement, dated ___________, 2011 (“Underwriting Agreement”), with Lazard Capital Markets LLC (“Lazard”) acting as representative of the several underwriters (collectively, the “Underwriters”), pursuant to which, among other matters, the Underwriters have agreed to purchase 7,500,000 units (“Units”) of the Company, plus an additional 1,125,000 Units if the Underwriters exercise their over-allotment option in full.  Each Unit consists of one ordinary share of the Company, par value $.001 per share (an “Ordinary Share”), and one Warrant to purchase one Ordinary Share, all as more fully described in the Company’s final Prospectus, dated
_________, 2011 (“Prospectus”) comprising part of the Company’s Registration Statement on Form S 1 (File No. 333-171727) under the Securities Act of 1933, as amended (“Registration Statement”), declared effective on _______, 2011 (“Effective Date”).

WHEREAS, the Initial Shareholders have agreed as a condition of the sale of the Units to deposit their Ordinary Shares 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 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 before the Effective Date, each of the Initial Shareholders shall deliver to the Escrow Agent certificates representing such Initial Shareholder’s respective Escrow Shares, to be held and disbursed subject to the terms and conditions of this Agreement.  Each Initial Shareholder 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 ending one year after the consummation of a Business Combination (as such term is defined in the Registration Statement).  The Company shall promptly provide 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, within one year 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 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 1,125,000 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 Initial Shareholder determined by multiplying (a) the product of (i) 281,250, multiplied by (ii) a fraction, (x) the numerator of which is the number of Escrow Shares held by each Initial Shareholder, and (y) the denominator of which is the total number of Escrow Shares, by (b) a fraction, (i) the numerator
of which is 1,125,000 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 1,125,000. The Company shall promptly provide 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 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.

  

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4.3           Restrictions on Transfer.  During the Escrow Period, the only permitted transfers of the Escrow Shares will be (i) if the Initial Shareholder is an entity, as a distribution to partners, members or stockholders of the Initial Shareholder upon the liquidation and dissolution of the Initial Shareholder, (ii) 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, (iii) by virtue of the laws of descent and distribution upon death of the Initial
Holder, (iv) pursuant to a qualified domestic relations order, (v) by certain pledges to secure obligations incurred in connection with purchases of the Company’s securities, (vi) by private sales at prices no greater than the price at which the Escrow Shares were originally purchased or (vii) to the Company for cancellation 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 Lazard 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 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.

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.

  

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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 the Underwriters are third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent of Lazard.

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 Resources Development Inc.

c/o SSC Mandarin Investment Group Limited

1402 China Resources Building

26 Harbour Road, Wanchai

Hong Kong

Attn:  Chief Executive Officer

 

If to a Shareholder, 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:  Chairman

 

  

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

Lazard Capital Markets LLC

30 Rockefeller Plaza

New York, NY, 10020

Attn:  General Counsel

and:

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Attn:  David Alan Miller, Esq.

and:

 

Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue, Suite 1100

Palo Alto, California 94301

Attn:  Thomas J. Ivey, 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.

 

  

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

 

	  	
CHINA RESOURCES DEVELOPMENT INC.

	  	  
	
By:

	
  

	  	  
	  	
INITIAL SHAREHOLDERS:

	  	  
	  	
  

	  	
Seng Leong Lee

	  	  
	  	
GLOBAL STRATEGIC PARTNERS LIMITED

	  	  
	
By:

	
  

	  	
Name:

	  	
Title:

	  	  
	  	
  

	  	  
	  	
 

	  	  
	  	
  

	
CONTINENTAL STOCK TRANSFER

	
& TRUST COMPANY

	  	  
	
By:

	   
	  	
Name:

	  	
Title:

  

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EXHIBIT A

 

	
Name and Address of 

Initial Shareholder     

	  	
Number

of Shares

	  	
Stock 

Certificate Number

	  	
Date of 

Insider Letter

	  	  	  	  	  	  	  
	
Seng Leong Lee

China Resources Development Inc.

c/o SSC Mandarin Investment Group Limited

1402 China Resources Building

26 Harbour Road, Wanchai

Hong Kong

	  	  	  	
1

	  	
____________, 2011

	  	  	  	  	  	  	  
	
Global Strategic Partners Limited

106 Stonewall Circle

West Harrison, NY 10604

	
  

	
452,813

	
  

	
2

	
  

	
____________, 2011

  

8Unassociated Document

Exhibit 10.5

 

 

CHINA RESOURCES DELVEOPMENT INC.

PROMISSORY NOTE

Principal Amount: U.S.$50,000.00

Issuance Date: January 6, 2011

CHINA RESOURCES DEVELOPMENT INC., a Cayman Islands corporation (the “Maker”), promises to pay to the order of SSC Mandarin Investment Group Limited (the “Payee”) the principal sum of Fifty Thousand Dollars ($50,000.00) in lawful money of the United States of America, on the terms and conditions described below.

1.       Principal. The principal balance of this Promissory Note (this “Note”) shall be payable on the earlier of (a) the first anniversary of the issuance date of this Note and (b) the date on which Maker consummates an initial public offering of its securities under the Securities Act of 1993, as amended.

2.       Interest. No interest shall accrue on the unpaid principal balance of this Note.

3.       Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the reduction of the unpaid principal of this Note.

4.       Events of Default. Each of the following shall constitute an event of default (“Event of Default”) under this Note:

(i)        Failure to Make Required Payments. Failure by Maker to pay the principal amount of this Note within five (5) business days following the date when due.

(ii)       Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under the Companies Law of the Cayman Islands, as now constituted or hereafter amended, or any other applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.

  

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(iii)          Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under the Companies Law of the Cayman Islands, as now or hereafter constituted, or any other applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days.

	
  

	
5.

	
Remedies.

(a)           Upon the occurrence of an Event of Default specified in Section 4(i) hereof, Payee may, by written notice to Maker, declare this Note to be immediately due and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding

(b)           Upon the occurrence of an Event of Default specified in either Section 4(ii) or Section 4(iii) hereof, the unpaid principal balance of this Note, and all other amounts payable hereunder, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee, including presentment, demand, protect or other notice of any kind, all of which are hereby expressly waived.

6.     Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a
judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.

  

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7.     Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to it or affecting its
liability hereunder.

8.     Notices. Any notice called for hereunder shall be deemed properly given if (i) sent by certified mail, return receipt requested, (ii) personally delivered, (iii) dispatched by any form of private or governmental express mail or delivery service providing receipted delivery, (iv) sent by facsimile or (v) sent by e-mail, to the following addresses or to such other address as either party may designate by notice in accordance with this Section:

If to Maker:               China Resources Development Inc.

1402 China Resources Building

No. 26 Harbour Road

Wanchai

Hong Kong

Attention: Mr. Brandon Ho

Email: brandonho@sscmandarin.com

If to Payee:                SSC Mandarin Investment Group Limited

1402 China Resources Building

No. 26 Harbour Road

Wanchai

Hong Kong

Email: robinlee@sscmandarin.com

  

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Notice shall be deemed given on the earlier of (i) actual receipt by the receiving party, (ii) the date shown on a facsimile transmission confirmation (if a fax number is provided for this purpose), (iii) the date on which an e-mail transmission was received by the receiving party’s on-line access provider, (iv) the date reflected on a signed delivery receipt, or (v) two (2) Business Days following tender of delivery or dispatch by express mail or delivery service.

9.            Governing Law; Construction. This Note, the legal relations between the Maker and Payee, and the adjudication and the enforcement hereof shall be governed by and construed in accordance with the laws of Hong Kong, without regard to the conflicts of law provisions thereof to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.

10.            Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed on the day and year first above written.

	
CHINA RESOURCES DEVELOPMENT INC.

	  	  
	
By:

	/s/ Brandon Ho
	
Name:

	
Brandon Ho

	
Title:

	
Vice President of Finance

	  	
and Chief Financial Officer

  

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