SECURITIES ESCROW AGREEMENT
THIS
SECURITIES ESCROW AGREEMENT (the “Agreement”),
dated
as of April 14, 2008, is entered into by and among Aamaxan Transport Group,
Inc., a Delaware corporation (the “Company”),
Xxxx
Investments II LLC a Delaware limited liability company, as representative
of
the Purchasers (the “Purchaser
Representative”),
the
Purchasers which have executed this Agreement (“Purchasers”),
Kamick
Assets Limited, a company organized in the British Virgin Islands (the
“Principal
Stockholder”),
and
Tri-State Title & Escrow, LLC (the “Escrow
Agent”).
Capitalized terms used but not defined herein shall have the meanings set forth
in the Purchase Agreement (as defined below).
WITNESSETH:
WHEREAS,
the Purchasers will be purchasing from the Company Units consisting of shares
of
the Company’s Series A Convertible Preferred Stock, par value $0.001 per share
(the “Series
A Preferred”),
convertible into shares of the Company’s common stock, par value $0.001 per
share (the “Common
Stock”),
and
certain common stock purchase warrants (the “Warrants”)
pursuant to a Securities Purchase Agreement dated as of the date hereof (the
“Closing
Date”)
by and
among the Company and the Purchasers (the “Purchase
Agreement”);
WHEREAS,
the Company will issue shares of its Common Stock to the Principal Stockholder,
pursuant to that certain Share Exchange Agreement dated as of the date hereof
by
and among the Company, Asia Business Management Group Limited (“ABM”) and the
Principal Stockholder (the “Share Exchange Agreement”), and upon the
consummation of the transactions contemplated by the Share Exchange Agreement,
Anhante (Beijing) Medical Technology Co., Ltd. (“WFOE”), a “wholly foreign owned
enterprise” organized under the laws of the People’s Republic of China (the
“PRC”) and a direct wholly-owned subsidiary of ABM immediately prior to the
consummation of the transactions contemplated by the Share Exchange Agreement,
will become an indirect wholly-owned subsidiary of the Company (the “Share
Exchange Transaction”);
WHEREAS,
the Company and the Purchasers agree that the capitalization table upon which
the transactions contemplated by this Agreement and the Purchase Agreement
are
based is set forth as Schedule
A
hereto;
and
WHEREAS,
as an inducement to the Purchasers to enter into the Purchase Agreement, the
Principal Stockholder has agreed to place the Escrow Shares (as hereinafter
defined) into escrow for the benefit of the Purchasers in the event the Company
fails to achieve the following financial performance threshold for the 12-month
periods ending December 31, 2007 (“2007”)
and
December 31, 2008 (“2008”)
and if
the Purchasers do not elect to exercise a right of redemption upon the happening
of a Triggering Event as defined in Section 7 of the Amended Certificate of
Designations, preferences and Rights for the Series A Preferred (a “Redemption
Right”):
(a) In
2007,
earnings per share, as computed in accordance with US GAAP and reported by
the
Company in its audited financial statements for 2007 (the “2007
financial statements”)
equal
or exceed $0.31, such “Earnings Per Share” to be calculated by dividing
the
lesser
of Net
Income and Cash from Operations, as reported in the 2007 financial statements
plus
any
amounts that may have been recorded as charges or liabilities on the 2007
financial statements due to the application of EITF No. 00-19 that are
associated with (1) any outstanding Warrants of the Company issued in connection
with the Purchase Agreement or (2) any liabilities created as a result of the
Escrow Shares being released to any officers or directors of the Company
(“2007
Net Income”)
by the
aggregate number of shares of then outstanding Common Stock on a fully-diluted
basis, which number shall include, without limitation, the number of shares
of
Common Stock issuable upon conversion of the Company’s then outstanding shares
of Series A Preferred and the number of shares of Common Stock issuable upon
the
exercise of any then outstanding preferred stock, warrants or options of the
Company (“Outstanding
Shares”)
(the
performance threshold set forth above shall be collectively referred to herein
as the “2007
Performance Threshold”);
(b) In
2008,
earnings per share equal or exceed $0.45, such “Earnings Per Share” to be
calculated by dividing the
lesser of
Net
Income and Cash from Operations, as reported by the Company in the 2008
financial statements plus
any
amounts that may have been recorded as charges or liabilities on the 2008
financial statements due to the application of EITF No. 00-19 that are
associated with (1) any outstanding Warrants of the Company issued in connection
with the Purchase Agreement or (2) any liabilities created as a result of the
Escrow Shares being released to any officers or directors of the Company
(“2008
Net Income”)
by the
then Outstanding Shares (the performance threshold set forth above shall be
collectively referred to herein as the “2008
Performance Threshold”);
and
WHEREAS,
the Company, the Purchaser Representative and the Purchasers have requested
that
the Escrow Agent hold the Escrow Shares on the terms and conditions set forth
in
this Agreement and the Escrow Agent has agreed to act as escrow agent pursuant
to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
I
TERMS
OF
THE ESCROW
1.1. The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this
Agreement.
1.2. Upon
the
execution of this Agreement, each Principal Stockholder shall deliver to the
Escrow Agent stock certificates evidencing one hundred percent (100%) of the
shares of Common Stock underlying the Preferred Shares issuable under the
Purchase Agreement and indicated on Schedule
A
hereto
(such shares of Common Stock plus such additional number of shares of Common
Stock as may be required to be deposited hereunder pursuant to Section 1.3(i)
or
1.3(ii) hereof shall be collectively referred to in this Agreement as the
“Escrow
Shares”),
along
with updated stock powers executed in blank with signature medallion guaranteed
(unless such guarantee shall be waived by the Company and the Company’s transfer
agent).
1
1.3. The
parties hereby agree that the 2007 Escrow Shares (as hereinafter defined) shall
be delivered based on the achievement of the 2007 Performance Threshold as
set
forth below:
(i) If
the
Company does not achieve at least 92% of the 2007 Performance Threshold, then
all of the Escrow Shares (the “2007
Escrow Shares”)(or,
in
the event that any Purchaser(s) have exercised a Redemption Right, such number
of 2007 Escrow Shares as may remain after a pro-rata reduction in the number
of
such Escrow Shares based on the number of shares of Series A Preferred redeemed
(the “2007 Remaining
Shares”))
shall
be distributed on a pro rata basis to the Purchasers which have not exercised
a
Redemption Right based on the number of shares of Series A Preferred owned
by
such Purchasers as of the date thereof. Within five (5) business days of the
Purchaser Representative’s receipt of the 2007 financial statements, the Company
and the Purchaser Representative shall provide written instruction to the Escrow
Agent instructing the Escrow Agent to issue and deliver the 2007 Escrow Shares
to the Purchasers on a pro rata basis based on the number of shares of Series
A
Preferred owned by such Purchasers as of the date thereof.
(ii) If
the
Company achieves between 92% and 99% of the 2007 Performance Threshold, the
Escrow Agent shall deliver to the Purchasers which have not exercised a
Redemption Right, on a pro rata basis based on the number of shares of Series
A
Preferred owned by such Purchasers as of the date thereof, the number of 2007
Remaining Shares multiplied by the percentage by which the 2007 Performance
Threshold was not achieved and multiplied by 200%. Any remaining Escrow Shares
shall continue to be held in escrow hereunder. Within five (5) business days
of
the Purchaser Representative’s receipt of the 2007 financial statements, the
Company and the Purchaser Representative shall provide written instructions
to
the Escrow Agent instructing the Escrow Agent to deliver the applicable number
of 2007 Remaining Shares to the Purchasers and to hold the remaining Escrow
Shares in escrow.
(iii) If
the
Company achieves at least 100% of the 2007 Performance Threshold, then the
Escrow Shares shall continue to be held in escrow hereunder.
1.4. The
parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall
be delivered based on achievement of the 2008 Performance Threshold as set
forth
below:
(i) If
the
Company does not achieve at least 80% of each of the 2008 Performance Threshold,
then all of the Escrow Shares (the “2008
Escrow Shares”)
(or,
in the event that any Purchaser(s) have exercised a Redemption Right, such
number of 2008 Escrow Shares as may remain after a pro-rata reduction in the
number of such Escrow Shares based on the number of shares of Series A Preferred
redeemed (the “2008 Remaining
Shares”)),
shall be distributed on a pro rata basis to the Purchasers which have not
exercised a Redemption Right based on the number of shares of Series A Preferred
owned by such Purchasers as of the date thereof. Within five (5) business days
of the Purchaser Representative’s receipt of the 2008 financial statements, the
Company and the Purchaser Representative shall provide written instruction
to
the Escrow Agent instructing the Escrow Agent to issue and deliver the 2008
Remaining Shares to the Purchasers on a pro rata basis based on the number
of
shares of Series A Preferred owned by such Purchasers as of the date
thereof.
2
(ii) If
the
Company achieves between 80% and 99% of the 2008 Performance Threshold, (a)
the
Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on
the
number of shares of Series A Preferred owned by such Purchasers as of the date
thereof, the number of 2008 Remaining Shares equal to the number of 2008
Remaining Shares multiplied by the percentage by which the 2008 Performance
Threshold was not achieved and multiplied by 200% and (b) the remaining 2008
Escrow Shares shall be returned to each Principal Stockholder. Within five
(5)
business days of the Purchaser Representative’s receipt of the 2008 financial
statements, the Company and the Purchaser Representative shall provide written
instructions to the Escrow Agent instructing the Escrow Agent to deliver the
applicable number of 2008 Escrow Shares to the Purchasers and to each Principal
Stockholder.
(iii) In
the
event the Company achieves at least 100% of the 2008 Performance Threshold,
all
of the 2008 Remaining Shares shall be returned to each Principal Stockholder
at
the address set forth in Section 5.3 hereof.
Notwithstanding
anything to the contrary set forth herein, only those Purchasers who own shares
of Series A Preferred acquired under the Purchase Agreement and remain
shareholders of the Company at the time that the 2008 Escrow Shares become
deliverable hereunder shall be entitled to their pro rata portion of such 2008
Escrow Shares calculated based on their ownership interest at the time when
such
2008 Escrow Shares become deliverable hereunder. Any 2008 Escrow Shares not
delivered to Purchasers because the Purchasers no longer hold shares of Series
A
Preferred acquired under the Purchase Agreement will be delivered to the
Principal Stockholder.
1.5. The
Company will provide the Purchaser Representative with (i) the Company’s audited
financial statements for 2007 and 2008, prepared in accordance with US GAAP,
on
the earliest date practicable so as to allow the Purchaser Representative the
opportunity to evaluate whether each of the 2007 and 2008 Performance Thresholds
were attained.
1.6. Upon
the
written request of the Company and Purchaser Representative, the Escrow Agent
shall deliver the 2007 Remaining Shares, the 2008 Remaining Shares, as
applicable, to each Purchaser and/or each Principal Stockholder pursuant to
the
written instructions of the Company and Purchaser Representative.
ARTICLE
II
REPRESENTATIONS
OF THE PRINCIPAL STOCKHOLDER
2.1. Each
Principal Stockholder hereby represents and warrants to the Purchasers and
the
Purchaser Representative as follows:
3
(i) The
Escrow Shares placed into escrow hereunder by the Principal Stockholder are
validly issued, fully paid and nonassessable shares of the Company. The
Principal Stockholder is the record and beneficial owner of the Escrow Shares
placed into escrow pursuant to this Agreement by the Principal Stockholder
and
has good title to such Escrow Shares, free and clear of all pledges, liens,
claims and encumbrances, except encumbrances created by this Agreement. There
are no restrictions on the ability of the Principal Stockholder to transfer
the
Escrow Shares placed into escrow pursuant to this Agreement by the Principal
Stockholder or to enter into this Agreement other than transfer restrictions
under applicable federal and state securities laws. Upon any delivery of Escrow
Shares placed into escrow pursuant to this Agreement by the Principal
Stockholder to the Purchasers hereunder, the Purchasers will acquire good and
valid title to such Escrow Shares, free and clear of any pledges, liens, claims
and encumbrances.
(ii) The
performance of this Agreement and compliance with the provisions hereof will
not
violate any provision of any law applicable to the Principal Stockholder and
will not conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, or result in the creation
or
imposition of any lien, charge or encumbrance upon, any of the properties or
assets of the Principal Stockholder pursuant to the terms of the certificate
of
incorporation or by-laws of the Company or any indenture, mortgage, deed of
trust or other agreement or instrument binding upon the Principal Stockholder
or
affecting the Escrow Shares. No notice to, filing with, or authorization,
registration, consent or approval of any governmental authority or other person
is necessary for the execution, delivery or performance of this Agreement or
the
consummation of the transactions contemplated hereby by the Principal
Stockholder.
ARTICLE
III
COVENANTS
3.1. [Intentionally
Omitted.]
3.2. [Intentionally
Omitted.]
ARTICLE
IV
MISCELLANEOUS
4.1. The
Company will pay Escrow Agent a total of $1,000 for all services rendered by
Escrow Agent hereunder.
4.2. No
waiver
or any breach of any covenant or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
4
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii)
if
mailed certified or registered mail return receipt requested, two (2) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or
(iv)
if delivered by facsimile transmission, on the business day of such delivery
if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
time,
on the next succeeding business day (as evidenced by the printed confirmation
of
delivery generated by the sending party’s telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 4), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of
the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers
as
applicable.
If
to
Escrow Agent:
Tri-State
Title & Escrow, LLC
000
Xxxx
Xxxxxx
X.X.
Xxx
000
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx
Tel.
No.
(000) 000-0000
If
to the
Principal Stockholder:
Mr.
Xxxx
Xxxxx
Kamick
Assets Limited
2a,
2b,
Xx.0 Xxxxxxxx Xx. 000 Xxxxxx Xxxx
Xxxxxxxxx
Xxxx-Xxxx Xxxx
Shanghai
People’s
Republic of China
Tel.
No.:
00-00-000-00-000
Fax
No.:
00-00-000-00-000
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With
a copy to:
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Guzov
Ofsink, LLC
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000
Xxxxxxx Xxxxxx, 00xx Xxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
|
|
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Attention:
Xxxxxx Xxxxxx
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Tel.
No.: (000) 000-0000, ext. 102
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Fax
No.: (000) 000-0000
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If to the Purchaser
|
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Representative:
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Xxxx
Investments II LLC
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0000
Xxxxxx Xxxxxx
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Xxxxx
000
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Xxxxxxx,
XX 00000
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phone:
(000) 000-0000
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fax:
(000) 000-0000
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5
with
copies (which copies shall not constitute notice) to:
Xxxxx
Xxxxx Xxxxxxx & Xxxxxxx PLLC
X.X.
Xxx
0000
Xxxxxxx,
XX 00000-0000
Attention.:
Xxxx Xxxxxxx
Phone:(000)
000-0000
Fax:
(000) 000-0000
or
to
such other address and to the attention of such other person as any of the
above
may have furnished to the other parties in writing and delivered in accordance
with the provisions set forth above.
4.3. This
Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and permitted assigns of the parties hereto.
4.4. This
Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Escrow Agreement may not
be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged
or
by its agent duly authorized in writing or as otherwise expressly permitted
herein.
4.5. Whenever
required by the context of this Escrow Agreement, the singular shall include
the
plural and masculine shall include the feminine. This Escrow Agreement shall
not
be construed as if it had been prepared by one of the parties, but rather as
if
both parties had prepared the same. Unless otherwise indicated, all references
to Articles are to this Escrow Agreement.
4.6. The
parties hereto expressly agree that this Escrow Agreement shall be governed
by,
interpreted under and construed and enforced in accordance with the laws of
the
State of New York, without regard to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction.
Any
action to enforce, arising out of, or relating in any way to, any provisions
of
this Escrow Agreement shall only be brought in a state or Federal court sitting
in New York City, Borough of Manhattan.
4.7. The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, the Principal Stockholder, the
Purchaser Representative and the Escrow Agent.
6
4.8. The
Escrow Agent shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the Escrow
Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith and in the absence of gross negligence, fraud and willful misconduct,
and
any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
absence of gross negligence, fraud and willful misconduct.
4.9. The
Escrow Agent is hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In
case the Escrow Agent obeys or complies with any such order, judgment or decree,
the Escrow Agent shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
4.10. The
Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver any documents or papers deposited or called for thereunder
in
the absence of gross negligence, fraud and willful misconduct.
4.11. The
Escrow Agent shall be entitled to employ such legal counsel and other experts
as
the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation therefor which
shall be paid by the Escrow Agent.
4.12. The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by giving written notice to the Company and the
Purchasers. In the event of any such resignation, the Purchasers and the Company
shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to
such successor Escrow Agent any escrow funds and other documents held by the
Escrow Agent.
4.13. If
the
Escrow Agent reasonably requires other or further instruments in connection
with
this Escrow Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
4.14. It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the documents or the Escrow Shares
held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed
in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s
possession without liability to anyone all or any part of said documents or
the
Escrow Shares until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired
and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (2) to deliver the
Escrow Shares and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York, Borough of Manhattan, in
accordance with the applicable procedure therefor.
7
4.15. The
Company agrees to indemnify and hold harmless the Escrow Agent and the Purchaser
Representative, and their respective partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in
any
way arising from or relating to the duties or performance of the Escrow Agent
or
Purchaser Representative, as the case may be, hereunder or the transactions
contemplated hereby or by the Purchase Agreement other than any such claim,
liability, cost or expense to the extent the same shall have been determined
by
final, unappealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, fraud or willful misconduct of the Escrow
Agent or Purchaser Representative, as the case may be.
4.16.
The
Purchasers hereby irrevocably appoint Xxxx as the Purchaser Representative
for
the purposes specified in this Agreement. Without prior notice to any Purchaser,
the Purchaser Representative shall have full, exclusive and irrevocable
authority on behalf of each of the Purchasers to perform the services set forth
in this Agreement. The foregoing authorization is granted and conferred by
the
Purchasers in consideration of the grant of such authorization by each of the
other Purchasers and in consideration of the agreements and covenants of the
Company contained herein. In consideration of, and except as provided by, the
foregoing, this authorization granted to the Purchaser representative shall
be
absolute and unconditional and shall only be terminated by upon thirty (30)
days
prior written notice to the Company by Purchasers holding greater than fifty
(50%) percent of the Shares, such notice to include the name of a replacement
agent reasonably acceptable the Company. Each Purchaser hereby covenants and
agrees to reimburse, indemnify and hold the Purchaser Representative, its
manager, officer, employees, representatives and members harmless from and
against any and all expense and losses which, without gross negligence or
willful misconduct on the part of Purchaser Representative, may be paid,
incurred or suffered by Purchaser Representative in its capacity as Purchaser
Representative hereunder, or to which Purchaser Representative may become
subject, arising out of or incident to its actions taken as Purchaser
Representative or any agreement, document or instrument executed in connection
therewith or the administration of Purchaser Representative’s duties under or
pursuant to this Agreement. This Section 4.16 shall survive the termination
of
this Agreement.
[Signature
Page Follows]
8
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
herein.
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By:
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Name:
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Title:
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PURCHASER
REPRESENTATIVE:
XXXX
INVESTMENTS II LLC
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By:
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Name:
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Title:
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ESCROW
AGENT:
TRI-STATE
TITLE & ESCROW, LLC
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By:
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Name:
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Title:
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KAMICK
ASSETS LIMITED
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By:
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Name:
Ganghua Shao
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Title:
Director
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9
Schedule
A
Capitalization
Table
10
