ESCROW AGREEMENT (Subscription Escrow Agreement)
ESCROW AGREEMENT
(Subscription Escrow Agreement)
THIS SUBSCRIPTION ESCROW AGREEMENT (this “Agreement”), is entered into as of _______, 2012, by and among Xxxxxx Online Entertainment Limited (“Issuer”), ICM Capital Markets Ltd. (“Depositor”, and together with Issuer, sometimes referred to individually as “Party” and collectively as the “Parties”), and JPMorgan Chase Bank, N.A. (the “Escrow Agent”).
Whereas, the Issuer has filed a registration statement on Form F-1 under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, File No. 333-169515 (the “Registration Statement”), relating to the offer and sale of American Depositary Shares (“ADSs”) of the Issuer. The Issuer proposes to sell a minimum of 800,000 ADSs (the “Minimum Offering Amount”) and a maximum of 1,600,000 ADSs at a price of $5.00 per ADS on a “best efforts, minimum/maximum” basis pursuant to the Registration Statement (the “Offering”).
WHEREAS, the Depositor has been named as the underwriter in connection with the Offering in accordance with the terms of an underwriting agreement to be entered into upon the effectiveness of the Registration Statement between the Issuer, the Depositor and any other underwriters named therein (the “Underwriting Agreement”); and
WHEREAS, in compliance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended, the Issuer and the Depositor propose to establish an Escrow Account (as defined in Section 2 hereof) with the Escrow Agent until the Offering terminates;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
3. Disposition and Termination. (a) The Parties agree to notify Escrow Agent in writing of the closing date of the Offering (the “Offering Closing Date”) at least one Business Day (as hereafter defined) in advance thereof, and, by the Offering Closing Date, whether or not Depositor received subscriptions for the Minimum Offering Amount. Upon receipt of such written notification one of the following procedures will take place:
(i) If Depositor has received subscriptions for the Minimum Offering Amount by the Offering Closing Date, on the Offering Closing Date the Funds will be promptly paid to or credited to the account of, or otherwise transferred pursuant to Issuer’s funds transfer instructions as set forth in section 3(b) below; or
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(ii) If Depositor has not received subscriptions for the Minimum Offering Amount by the Offering Closing Date, the Parties shall provide to Escrow Agent an electronic spreadsheet or list in a form reasonably acceptable to Escrow Agent containing the amount received from each subscriber whose Funds have been deposited with Escrow Agent (with respect to each subscriber the “Subscriber Investment Amount”) along with the name, address and Taxpayer Identification Number, if any, of each subscriber. The aggregate of all Subscriber Investment Amounts shall be equal to the amount of the Funds on the Offering Closing Date. Escrow Agent shall distribute to each subscriber the appropriate Subscriber Investment Amount pursuant to joint written instructions of the Parties within five (5) Business Days of receipt of the information described in this Section 3(a)(ii).
(b) Any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution of the Funds, must be in writing or set forth in a Portable Document Format (“PDF”), executed by the appropriate Party or Parties as evidenced by the signatures of the person or persons signing this Agreement or one of their designated persons as set forth in Schedule 1 (each an “Authorized Representative”), and delivered to Escrow Agent only by confirmed facsimile or attached to an email on a Business Day only at the fax number or email address set forth in Section 8 below. No instruction for or related to the transfer or distribution of the Funds shall be deemed delivered and effective unless Escrow Agent actually shall have received it on a Business Day by facsimile or as a PDF attached to an email only at the fax number or email address set forth in Section 8 and as evidenced by a confirmed transmittal to the Party’s or Parties’ transmitting fax number or email address and Escrow Agent has been able to satisfy any applicable security procedures as may be required hereunder. Escrow Agent shall not be liable to any Party or other person for refraining from acting upon any instruction for or related to the transfer or distribution of the Funds if delivered to any other fax number or email address, including but not limited to a valid email address of any employee of Escrow Agent. The Parties each acknowledge that Escrow Agent is authorized to use the following funds transfer instructions to disburse any Funds pursuant to Section 3(a)(i), without a verifying call-back as set forth in Section 3(c) below:
Issuer: | Bank name: | Depositor: | Bank name: |
Bank Address: | Bank Address: | ||
ABA number: | ABA number: | ||
Account name: | Account Name: | ||
Account number: | Account Number: |
(c) In the event any other funds transfer instructions are set forth in a permitted instruction from a Party or the Parties in accordance with Section 3(a), Escrow Agent is authorized to seek confirmation of such funds transfer instructions by a single telephone call-back to one of the Authorized Representatives, and Escrow Agent may rely upon the confirmation of anyone purporting to be that Authorized Representative. The persons and telephone numbers designated for call-backs may be changed only in a writing executed by Authorized Representatives of the applicable Party and actually received by Escrow Agent via facsimile or as a PDF attached to an email. Except as set forth in Section 3(a) above, no Funds will be disbursed until an Authorized Representative is able to confirm such instructions by telephone callback. Escrow Agent and the beneficiary's bank in any Funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Parties and confirmed by an Authorized Representative.
(d) The Parties acknowledge that there are certain security, corruption, transmission error and access availability risks associated with using open networks such as the Internet and the Parties hereby expressly assume such risks.
(e) As used in this Agreement, “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which Escrow Agent located at the notice address set forth below is authorized or required by law or executive order to remain closed. The Parties acknowledge that the security procedures set forth in this Section 3 are commercially reasonable. Upon delivery of the Funds by Escrow Agent in accordance herewith, this Agreement shall terminate, subject to the provisions of Section 6.
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4. Escrow Agent. Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied. Escrow Agent has no knowledge of, nor any requirement to comply with, the terms and conditions of any other agreement between the Parties, nor shall Escrow Agent be required to determine if any Party has complied with any other agreement. Notwithstanding the terms of any other agreement between the Parties, the terms and conditions of this Agreement shall control the actions of Escrow Agent. Escrow Agent may conclusively rely upon any written notice, document, instruction or request delivered by the Parties believed by it to be genuine and to have been signed by an Authorized Representative(s), as applicable, without inquiry and without requiring substantiating evidence of any kind and Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that Escrow Agent's gross negligence or willful misconduct was the cause of any direct loss to either Party. Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through affiliates or agents. In the event Escrow Agent receives instructions, claims or demands from any Party hereto which conflict with the provisions of this Agreement, or if Escrow Agent receives conflicting instructions from the Parties, Escrow Agent shall be entitled either to (a) refrain from taking any action until it shall be given a joint written direction executed by Authorized Representatives of the Parties which eliminates such conflict or by a final court order or (b) file an action in interpleader. Escrow Agent shall have no duty to solicit any payments which may be due it, including, without limitation, the Funds nor shall the Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of any amounts deposited with it hereunder. Anything in this Agreement to the contrary notwithstanding, in no event shall Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
5. Resignation; Succession. Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days advance notice in writing of such resignation to the Parties. Escrow Agent’s sole responsibility after such thirty (30) day notice period expires shall be to hold the Funds (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent, if any, appointed by the Parties, or such other person designated by the Parties, or in accordance with the directions of a final court order, at which time of delivery, Escrow Agent’s obligations hereunder shall cease and terminate. If prior to the effective resignation date, the Parties have failed to appoint a successor escrow agent, or to instruct the Escrow Agent to deliver the Funds to another person as provided above, at any time on or after the effective resignation date, Escrow Agent either (a) may interplead the Funds with a court of competent jurisdiction; or (b) appoint a successor escrow agent of its own choice. Any appointment of a successor escrow agent shall be binding upon the Parties and no appointed successor escrow agent shall be deemed to be an agent of Escrow Agent. Escrow Agent shall deliver the Funds to any appointed successor escrow agent, at which time Escrow Agent’s obligations under this Agreement shall cease and terminate. Any entity into which Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Agreement without further act.
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If to Issuer: | Xxxxxx Online Entertainment Limited |
Xxxxx 0000, Xxxxx X, Xxxxx International Center | |
Xx. 0 Xxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx, P.R.C. | |
Attention: Xxxxx Xxxxxx Xxxx, Director | |
Tel No.: x00-00-00000000 | |
Email Address: xxxxx.xxxxx@xxx.000.xxx | |
With copies to: | Loeb & Loeb LLP |
000 Xxxx Xxxxxx | |
Xxx Xxxx, XX 00000 | |
Attn: Xxxxxxxx X. Xxxxxxxx, Esq. | |
Tel No.: 000-000-0000 | |
Fax No.: 000-000-0000 | |
If to Depositor: | Xxxxxxx X. Xxxxxxx |
ICM Capital Markets Ltd | |
000 Xxxxxxx Xxx, 00xx Xxx | |
Xxx Xxxx, X.X. 00000 | |
Attention: Xxxxxxx Xxxxxxx | |
Tel No.: 000-000-0000 | |
Fax No.: 000-000-0000 | |
With copies to: | Xxxxxx Xxxxxx |
Xxxxxxx Savage, LLP | |
000 Xxxxxxxxx Xxxxxx | |
0xx Xxxxx | |
Xxx Xxxx, XX 00000 | |
Tel No:000-000-0000 | |
Fax No: 000-000-0000 | |
If to Escrow Agent: | JPMorgan Chase Bank, N.A. |
Escrow Services | |
0 Xxx Xxxx Xxxxx, 00xx Xxxxx | |
Xxx Xxxx, XX 00000 | |
Attention: Xxxxxxx X. Xxxx/Xxxx Xxxx-Francois | |
Fax No.: 000-000-0000 | |
Email Address: xx.xxxxxx@xxxxxxxx.xxx |
9. Compliance with Court Orders. In the event that any of the Funds shall be attached, garnished, levied upon, or otherwise be subject to any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all such orders so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that Escrow Agent obeys or complies with any such order it shall not be liable to any of the Parties hereto or to any other person by reason of such compliance notwithstanding such order be subsequently reversed, modified, annulled, set aside or vacated.
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10. Miscellaneous. The provisions of this Agreement may be waived, altered, amended or supplemented only by a writing signed by Escrow Agent and the Parties. Neither this Agreement nor any right or interest hereunder may be assigned by any Party without the prior consent of Escrow Agent and each other Party. This Agreement shall be governed by and construed under the laws of the State of New York without regard to conflicts of law principles that may result in the application of the substantive laws of another jurisdiction. Each Party and Escrow Agent irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts located in the State of New York. To the extent that in any jurisdiction either Party may now or hereafter be entitled to claim for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, such Party shall not claim, and hereby irrevocably waives, such immunity. Escrow Agent and the Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. No party to this Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control. This Agreement and any joint instructions from the Parties, may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument or instruction, as applicable. All signatures of the parties to this Agreement may be transmitted by facsimile or PDF, and such facsimile or PDF will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party. If any provision of this Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. The Parties represent, warrant and covenant that each document, notice, instruction or request provided by such Party to Escrow Agent shall comply with applicable laws and regulations. Except as expressly provided in Section 7, nothing in this Agreement, whether express or implied, shall be construed to give to any person or entity other than Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of the Funds or this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.
XXXXXX ONLINE ENTERTAINMENT LIMITED | ||
By: | ||
Name: | ||
Title: | ||
ICM CAPITAL MARKETS LTD. | ||
By: | ||
Name: | ||
Title: | ||
JPMORGAN CHASE BANK, NA, | ||
As Escrow Agent | ||
By: | ||
Name: | ||
Title: |
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Schedule 1
Telephone Numbers and Authorized Signatures for
Person(s) Designated to Give Instructions and Confirm Funds Transfer Instructions
For Issuer:
Name | Telephone Number | Signature | ||||
1. | ||||||
2. | ||||||
3. | ||||||
For Depositor: | ||||||
Name | Telephone Number | Signature | ||||
1. | ||||||
2. | ||||||
3. |
All instructions, including but not limited to funds transfer instructions, whether transmitted by facsimile or set forth in a PDF attached to an email, must include the signature of the Authorized Representative authorizing said funds transfer on behalf of each Party.
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Schedule 2
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