ESCROW AGREEMENT
ESCROW
AGREEMENT, dated as of January 16, 2007 (“Agreement”),
among
XXXXXX XXXX XXXXX RAYSMAN & XXXXXXX LLP (the “Escrow
Agent”),
the
investors set forth on the signature pages hereto (each, an “Investor”
and
collectively, the “Investors”),
IRISH
MAG, INC., a Florida corporation (the “Company”),
and
JIANG XXXX XXX (“Xx.
Xxx”).
The
Escrow Agent, the Investors and the Company are sometimes individually referred
to herein as a “Party”
and
collectively, as the “Parties”.
BACKGROUND
The
Investors and the Company are entering into a Securities Purchase Agreement
on
the date hereof (the “Securities
Purchase Agreement”)
pursuant to which the Investors are to acquire a number of shares of the
Company’s common stock as specified therein for an aggregate purchase price of
$14,950,001.80
The
Company has agreed to provide the Investors with certain exclusive negotiating
rights as set forth in this Agreement in consideration of the Investors putting
an aggregate of Fourteen Million, Nine Hundred Fifty Thousand and One Dollars
and Eighty Cents ($14,950,001.80) (the “Escrow
Deposit”)
into
escrow on the terms and subject to the conditions set forth in this
Agreement.
AGREEMENT
NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1. Appointment
of Escrow Agent; Establishment of Escrow Account.
(a) The
Investors, the Company and Xx. Xxx each hereby appoint the Escrow Agent as
escrow agent and the Escrow Agent accepts that appointment and agrees to hold
and dispose of the Escrow Deposit in accordance with the terms of this
Agreement. Escrow Agent acknowledges receipt of fair and reasonable
consideration for its services.
(b) The
Escrow Deposit shall be provided to the Escrow Agent in immediately available
funds by federal wire transfer and shall be deposited by the Escrow Agent in
an
interest bearing escrow account (the “Escrow
Account”)
that
is segregated from all other accounts.
2. Release
of the Escrow Deposit.
(a) On
January 31, 2007 the Escrow Agent shall promptly release the Escrow Deposit
to
the Investors in such amounts as were deposited by each Investor with the Escrow
Agent, if the Closing (as defined in the Securities Purchase Agreement) has
not
occurred. The Escrow Agent shall release the Escrow Deposit to the Investor
upon
receipt from the Investor of written instructions to that effect, which
instructions shall be provided at the sole discretion of the Investor. Neither
the Company nor any affiliate of the Company shall deliver any notice to the
Escrow Agent that conflicts in any way with the written instructions of the
Investors hereunder and the Escrow Agent shall be permitted to ignore any such
conflicting notice. The Escrow Agent shall return the Escrow Deposit to the
Investors promptly following receipt by the Escrow Agent of such Investors
instructions and may rely on such written instructions from the Investors even
if such written instructions are contrary to anything contained in this
Agreement or in the Securities Purchase Agreement.
(b) On
or
before January 31, 2007 the Escrow Agent shall promptly release one-half of
the
Escrow Deposit, which is Seven Million, Four Hundred Seventy Five Thousand
Dollars and Ninety Cents ($7,475,000.90) (the “First
Closing Escrow”),
in
accordance with Exhibit
A
hereto,
upon receipt of a joint written instruction from the Company and the Investors,
if the Closing (as defined in the Securities Purchase Agreement) has
occurred.
(c) If
the
First Closing Escrow has been released to the Company in accordance with Section
2(b), then, on April 30, 2007 (the “Due
Date”),
the
Escrow Agent shall promptly release Seven Million, Four Hundred Seventy Five
Thousand Dollars and Ninety Cents ($7,475,000.90) (the “Second
Closing Escrow”)
to the
Investors in such amounts as were deposited by each Investor with the Escrow
Agent, if Second Closing (as defined in the Securities Purchase Agreement)
has
not occurred. The Escrow Agent shall release the Second Closing Escrow to the
Investors upon receipt from the Investor of written instructions to that effect,
which such instructions shall be provided at the sole discretion of the
Investors. Neither the Company nor any affiliate of the Company shall deliver
any notice to the Escrow Agent that conflicts in any way with the written
instructions of the Investors hereunder and the Escrow Agent shall be permitted
to ignore any such conflicting notice. The Escrow Agent shall return the Second
Closing Escrow to the Investors promptly following receipt by the Escrow Agent
of such Investors instructions and may rely on such written instructions from
the Investors even if such written instructions are contrary to anything
contained in this Agreement or in the Securities Purchase Agreement.
Notwithstanding the foregoing, upon the written request of the Company to the
Investors with a copy to the Escrow Agent, and at the option of the Investors,
the Investors may provide the Company with monthly extensions of the Due Date,
provided that the Company pays to the Investors (pro rated based on the amounts
that were deposited by each Investor with the Escrow Agent) in advance for
each
such monthly extension an aggregate extension fee equal to $74,750. Such
extension fee shall be pro rated for periods of less than one full month. If
any
such extension is so granted by the Investors, then the Second Closing Escrow
shall be released (i) in accordance with Exhibit
B
hereto
upon the occurrence of the Second Closing (as defined in the Securities Purchase
Agreement), upon receipt of a joint written instruction from the Company and
the
Investors, or (ii) to the Investors, in such amounts as were deposited by each
Investor with the Escrow Agent, upon notice (provided in accordance with the
second, third and fourth sentence in this subsection (c)) to the Escrow Agent
that the Second Closing (as defined in the Securities Purchase Agreement) has
not occurred following the expiration of any such extension.
(d) If
the
First Closing Escrow has been released in accordance with Exhibit
A,
then,
on or before April 30, 2007 (the “Due
Date”),
the
Escrow Agent shall promptly release the Second Closing Escrow in accordance
with
Exhibit
B,
upon
receipt of a joint written instruction from the Company and the Investors,
if
the Second Closing has occurred.
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(e) Notwithstanding
any other provision of this Agreement, if at any time Escrow Agent shall receive
from the Company and the Investors (prior to being directed to take action
by a
court) joint written instructions as to the delivery of the Escrow Deposit
or
any portion thereof, Escrow Agent shall deliver the Escrow Deposit in accordance
with such joint written instructions.
(f) All
interest accrued on the Escrow Deposit shall be released to the Investors (pro
rated based upon the amounts that were deposited by each Investor with the
Escrow Agent) regardless of whether the Escrow Deposit itself has been released
in accordance with Exhibit
A
or
Exhibit
B
or to
the Investors in accordance with the other provisions of this Section
2.
3. Exclusivity.
The
Company and Xx. Xxx agree that, for a period commencing on the date of execution
of this Agreement and ending on the date that the Escrow Deposit is fully
disbursed in accordance with this Agreement (the “Exclusivity Period”), the
Company and Xx. Xxx shall not, and shall cause their respective employees,
affiliates, directors, or representatives not to, directly or indirectly,
provide information regarding the Company to, or initiate, negotiate, or hold
any discussions or enter into any understanding or agreement with, any party
other than the Investors with respect to any Competitive Transaction (as defined
below). To the extent such discussions or negotiations are on-going, they will
be terminated immediately. In addition, the Company and Xx. Xxx agree to
immediately communicate to the Investors the terms of any proposal relating
to a
Competitive Transaction received by the Company or the employees, directors,
or
representatives of the Company during the Exclusivity Period. For purposes
of
this Agreement, a “Competitive Transaction” is a transaction involving, directly
or indirectly, (i) the offer and/or sale of securities of the Company to any
Person regardless of whether such securities are equity securities, debt
securities or convertible or derivative securities, (ii) any transaction
involving any loan of money or other property to the Company by any Person
regardless of the structure of any such loan and including transactions such
as
capitalized leases and similar transactions, (iii) the acquisition of the
Company or of all or any material portion of the assets of, or of any of the
stock in, the Company regardless of the structure of any such acquisition,
or
the authorization of any advisors of the Company to take any action for the
purposes of advancing any such acquisition with any party other than the
Purchaser, or (ii) the taking any other action that is inconsistent with the
implementation of this Agreement and the existing term sheet entered delivered
to the Parties.
4. Interpleader.
The
Escrow Agent may at any time commence an action in the nature of interpleader
or
other legal proceedings and may deposit the Escrow Deposit with the clerk of
the
court. In the event of any dispute regarding who is entitled to the Escrow
Deposit at any time, the Escrow Agent may determine not to release the Escrow
Deposit to either any Investor or the Company and may commence an interpleader
action as aforesaid or may cause the Escrow Deposit to be deposited with a
court
of competent jurisdiction whereupon it shall cease to have any further
obligation hereunder. Upon any delivery or deposit of the Escrow Deposit as
provided in this Section 4, the Escrow Agent shall be released and discharged
from any further obligation under this Agreement.
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5. Concerning
the Escrow Agent
(a) The
Escrow Agent shall not have any liability to any of the parties to this
Agreement or to any third party arising out of its services as Escrow Agent
under this Agreement, except for damages directly resulting from the Escrow
Agent's gross negligence or willful misconduct.
(b) The
Company and the Investors jointly and severally shall indemnify the Escrow
Agent
and hold it harmless against any loss, liability, damage or expense (including
reasonable attorneys' fees) that the Escrow Agent may incur as a result of
acting as escrow agent under this Agreement, except for any loss, liability,
damage or expense arising from its own gross negligence or willful misconduct.
As between the Company and the Investors, such obligations shall be borne
equally by the Company and the Investors. For this purpose, the term "attorneys'
fees" includes fees payable to any counsel retained by the Escrow Agent in
connection with its services under this Agreement and, with respect to any
matter arising under this Agreement as to which the Escrow Agent performs legal
services, if and to the extent that the Escrow Agent itself is a law firm,
its
standard hourly rates and charges then in effect.
(c) The
Escrow Agent shall be entitled to rely upon any judgment, notice, instrument
or
other writing delivered to it under this Agreement without being required to
determine the authenticity of, or the correctness of any fact stated in, that
document and irrespective of any facts the Escrow Agent may know or be deemed
to
know in any other capacity. The Escrow Agent may act in reliance upon any
instrument or signature believed by it to be genuine and may assume that any
person purporting to give any notice or receipt or advice or make any statement
or execute any document in connection with this Agreement has been duly
authorized to do so.
(d) The
Escrow Agent shall have no duties or responsibilities except those expressly
set
forth in this Agreement. The Escrow Agent shall not have any obligations arising
out of or be bound by the provisions of any other agreement, written or oral,
including, but not limited to, the Stock Purchase Agreement.
(e) All
of
the Escrow Agent's rights of indemnification provided for in this Agreement
shall survive the resignation of the Escrow Agent, its replacement by a
successor Escrow Agent, its delivery or deposit of the Escrow Deposit in
accordance with this Agreement, the termination of this Agreement, and any
other
event that occurs after this date.
(f) The
Escrow Agent shall have no responsibility with respect to the sufficiency of
the
arrangements contemplated by this Agreement to accomplish the intentions of
the
Parties.
6. Representations.
Each
Investor and the Company each represents and warrants to the Escrow Agent that
each has full power and authority to enter into and perform this Agreement;
that
this Agreement was duly authorized by all necessary corporate or other action;
and that this Agreement is enforceable against each Party in accordance with
its
terms.
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7. Resignation;
Successor Escrow Agent.
The
Escrow Agent (and any successor escrow agent) may at any time resign as such
upon 30 days prior notice to each of the other Parties. Upon receipt of a notice
of resignation, each of the other Parties shall use their best efforts to select
a successor agent within 15 days, but if within that 15 day period the Escrow
Agent has not received a notice signed by both of them appointing a successor
escrow agent and setting forth its name and address, the Escrow Agent may (but
shall not be obligated to) select on their behalf a bank or trust company to
act
as successor escrow agent, for such compensation as that bank or trust company
customarily charges and on such terms and conditions not inconsistent with
this
Agreement as that bank or trust company reasonably requires. The fees and
charges of any successor escrow agent shall be payable out of the Purchase
Price. A successor escrow agent selected by the resigning Escrow Agent may
become the Escrow Agent by confirming in writing its acceptance of the position.
The Investors and the Company shall sign such other documents as the successor
escrow agent reasonably requests in connection with its
appointment.
8. Notices.
All
notices, instructions, objections or other communications under this Agreement
shall be in writing and shall be deemed given when sent by United States
registered mail, return receipt requested, to the respective Parties at the
addresses specified on the signature page hereto.
9. Miscellaneous.
(a) The
Company and the Investors shall jointly and severally pay to the Escrow Agent
on
demand, all costs and expenses,
including,
without limitation, the costs of any interpleader or similar action, incurred
by
the Escrow Agent in performing its services under this Agreement.
As
between the Company and the Investors, such obligations shall be borne equally
by the Company and the Investors.
(b) If
any
provision of this Agreement is determined by any court of competent jurisdiction
to be invalid or unenforceable in any jurisdiction the remaining provisions
of
this Agreement shall not be affected thereby, and the invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable that provision in any other jurisdiction. It is understood,
however, that the parties intend each provision of this Agreement to be valid
and enforceable and each of them waives all rights to object to any provision
of
this Agreement.
(c) This
Agreement shall be binding upon and inure solely to the benefit of the parties
and their respective successors and permitted assigns, and shall not be
enforceable by or inure to the benefit of any third party. No party may assign
its rights or obligations under this Agreement or any interest in the Escrow
Deposit without the written consent of the other parties unless otherwise
specified herein, and any other purported assignment shall be void. In no event
shall the Escrow Agent be required to act upon, or be bound by, any notice,
instruction, objection or other communication given by a person other than,
nor
shall the Escrow Agent be required to deliver the Escrow Deposit to any person
other than, the Company or the Investors.
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(d) This
Agreement shall be governed by and construed in accordance with the law of
the
State of New York applicable to agreements made and to be performed in New
York.
(e) The
courts of New York State and the United States District Courts for New York
shall have exclusive jurisdiction over the parties (and the subject matter)
with
respect to any dispute or controversy arising under or in connection with this
Agreement. A summons or complaint or other process in any such action or
proceeding served by mail in accordance with the notice provisions of this
Agreement or in such other manner as may be permitted by law shall be valid
and
sufficient service.
(f) This
Agreement contains a complete statement of all of the arrangements among the
Parties with respect to its subject matter and cannot be changed or terminated
orally. Any waiver must be in writing.
(g) This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which taken together shall constitute one
and the same instrument. Facsimile execution and delivery of this Agreement
is
legal, valid and binding for all purposes.
(h) The
section headings used herein are for convenience of reference only and shall
not
affect the construction or interpretation of this Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the respective parties have executed this Agreement as of
the
date first above written.
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XXXXXX
XXXX XXXXX RAYSMAN &
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XXXXXXX
LLP
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By:
/s/
Xxxxx X. Xxxxxxxxxx
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Xxxxx
X. Xxxxxxxxxx
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Partner
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Address:
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000
Xxxxxx Xxxxxx, XX
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Xxxxxxxxxx,
XX 00000
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Fax:
000-000-0000
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/s/
Jiang Xxxx Xxx
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XX.
XXX
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Address:
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Unit
D, Block 2, Tian An Cyber Park
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Chengongmiao,
Shenzhen, Guangdong, 518040
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People’s
Republic of China
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EXHIBIT
A
CLOSING
FLOW OF FUNDS
9
EXHIBIT
B
SECOND
CLOSING FLOW OF FUNDS
10
