AMENDMENT NUMBER 1 TO THE MAKE GOOD ESCROW AGREEMENT
Exhibit
10.1
AMENDMENT
NUMBER 1 TO THE MAKE GOOD ESCROW AGREEMENT
THIS AMENDMENT NUMBER 1 TO THE MAKE
GOOD ESCROW AGREEMENT, dated as of August 14, 2009 (this “Amendment”),
is entered into by and among China Valves Technology, Inc. (f/k/a
Intercontinental Resources, Inc.), a Nevada corporation (the "Company"), Xxx Xx (the "Make Good Pledgor"), Xxxxx
Xxxxxx Carret & Co., LLC as Investor agent (“Investor Agent”), the
undersigned, who constitute at least a majority in interest of the investors in
the Company’s August 2008 private placement (the “Investors”)
and Escrow, LLC, as escrow agent ("Escrow
Agent"). Capitalized terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the Make Good
Agreement (as defined below).
BACKGROUND
The Company and the Investors
(including the Purchasers) are parties to that certain Make Good Escrow
Agreement, dated as of August 26, 2008 (the “Make Good
Agreement”). The parties to this Amendment wish to amend
certain provisions of the Make Good Agreement as set forth in this
Amendment. Section 14 of the Make Good Agreement provides that the
Make Good Agreement may not be changed orally or modified, amended or
supplemented without an express written agreement executed by the Escrow Agent,
the Company, the Make Good Pledgor and the Investor Agent (upon consent of the
Investors holding a majority of the Shares issued at Closing under the
Securities Purchase Agreement (“Major
Investors”)). This Amendment constitutes a written agreement
signed by the necessary parties in order to effectuate the amendments to the
Make Good Agreement specified below.
NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE
I
AMENDMENTS
SECTION
1.1. Amendment. The
parties hereto agree that the Make Good Agreement shall be amended as set forth
in this Section 1.1.
The second and third paragraphs in
Section 4(a) of the Make Good Agreement are each hereby amended and restated in
their entirety as follows:
“In the
event that either (i) the Earnings Per Share (as defined below) reported in the
Annual Report of the Company for the fiscal year ending December 31, 2009, as
filed with the Commission on Form 10-K (or such other form appropriate for such
purpose as promulgated by the Commission) (the “2009 Annual Report”) is less
than $0.334 per share on a fully diluted basis (as equitably adjusted for any
stock splits, stock combinations, stock dividends or similar transactions) (the
“2009 Guaranteed EPS”)
or (ii) the After Tax Net Income reported in the 2009 Annual Report is less than
$21,000,000 (the “2009
Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor)
will transfer the 2009 Make Good Shares to the
Investors on a pro rata basis (determined
by dividing each Investor’s Investment Amount by the aggregate of all Investment
Amounts delivered to the Company by the Investors under the Securities Purchase
Agreement) as specified in Exhibit A to this Agreement for no consideration
other than payment of their respective Investment Amount paid to the Company at
Closing and without any need for action or
notice by or on behalf of any Investor. The “2009 Make Good Shares” means 8,388,688 shares of Common Stock, as equitably
adjusted for any stock splits, stock combinations, stock dividends or similar
transactions.
1
In the
event that either (i) the Earnings Per Share reported in the Annual Report of
the Company for the fiscal year ending December 31, 2010, as filed with the
Commission on Form 10-K (or such other form appropriate for such purpose as
promulgated by the Commission) (the “2010 Annual Report”) is less
than $0.541 per share on a fully diluted basis (as equitably adjusted for any
stock splits, stock combinations, stock dividends or similar transactions) (the
“2010 Guaranteed EPS”)
or (ii) the After Tax Net Income reported in the 2010 Annual Report is less than
$34,000,000 (the “2010
Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor)
will transfer the 2010 Make Good Shares to the Investors on a pro rata basis
(determined by dividing each Investor’s Investment
Amount by the aggregate of all Investment Amounts delivered to the Company by
the Investors under the Securities Purchase Agreement) as specified in
Exhibit A to this Agreement for no consideration other than
payment of their respective Investment Amount paid to the Company at Closing and
without any need for action or notice by or on behalf of any
Investor. The “2010 Make Good Shares” means 8,388,688 shares of Common Stock, as equitably adjusted for any stock
splits, stock combinations, stock dividends or similar
transactions.”
SECTION
1.2. Full Force and
Effect. For the avoidance of doubt, all other provisions of
the Make Good Agreement shall remain in full force and effect.
ARTICLE
II
MISCELLANEOUS
SECTION
2.1. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION
2.2. Entire Agreement.
This Amendment along with the Make Good Agreement and the other Transaction
Documents contains the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into this Amendment.
SECTION
2.3. Counterparts. This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
2
IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be duly executed by their respective authorized
signatories as of the date first indicated above.
COMPANY:
By:_______________________________
Name:
Siping Fang
Title: Chief
Executive Officer
Address:
Xx. 00 Xxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx
Xxxxxxxx
China
475002
Facsimile: 00-000-0000000
Attn.: Siping
Fang
MAKE GOOD
PLEDGOR:
Xxx
Xx
___________________________________
Address:
0000 Xxxxxxxxxxx Xxx
Xxxxxx, XX
00000
Facsimile: (000)
000-0000
Attn.:
Xxx Xx
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK -
Signature
page for other parties follows]
Signature
Page to the Amendment to Make Good Escrow Agreement
IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be duly executed by their respective authorized
signatories as of the date first indicated above.
FOR
ENTITIES:
_______________________
(Name of
Entity)
By:____________________
Name:
Title:
_______________________
(Number
of Shares)
FOR
INDIVIDUALS:
_______________________
Name:
_______________________
(Number
of Shares)
Signature
Page to the Amendment to Make Good Escrow Agreement
IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be duly executed by their respective authorized
signatories as of the date first indicated above.
ESCROW
AGENT:
ESCROW, LLC, as
Escrow Agent
By:_______________________________
Name:
Title:
Address: 000 Xxxx
Xx.,
Xxxxxxxxxx, XX
00000
Facsimile: (000)
000-0000
Attn.:
INVESTOR
AGENT
XXXXX
XXXXXX CARRET & CO., LLC, as Investor Agent
By:_______________________________
Name:
Title:
Address:
Facsimile:
Attn.:
Signature
Page to the Amendment to Make Good Escrow Agreement
