SECURITIES ESCROW AGREEMENT
THIS
SECURITIES ESCROW AGREEMENT (the “Agreement”),
dated
as of June 10, 2008, is entered into by and among Southern Sauce Company, Inc.,
a Florida corporation (the “Company”),
Vision Opportunity China LP, a closed-ended investment company incorporated
in
Guernsey, as representative of the Purchasers (the “Purchaser
Representative”),
each
entity listed on Schedule
A
hereto
(collectively, the “Principal
Stockholders”),
and
Loeb & Loeb LLP, with an address at 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000 (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 Shen Kun International
Limited, a company organized in the British Virgin Islands (the “BVI”) (“Shen
Kun”), pursuant to that certain Merger Agreement, dated as of June 9, 2008 by
and among the Company, Shen Kun Acquisition Sub Limited, a BVI company which
is
a wholly owned subsidiary of Parent (“Acquisition Subsidiary”), Shen Kun, Parent
Controlling Shareholders (as that term is defined in the Merger Agreement),
Shen
Kun Shareholders (as that term is defined in the Merger Agreement), and Shengkai
(Tianjin) Ceramic Valves Co., Ltd., a PRC wholly foreign-owned enterprise
(“WFOE”) organized under the laws of the People’s Republic of China (the “PRC”),
and Tianjin Shengkai Industrial Technology Development Co., Ltd., a PRC company,
(the “Merger Agreement”), and upon the consummation of the transactions
contemplated by the Merger Agreement, WFOE, a direct wholly-owned subsidiary
of
Shen Kun immediately prior to the consummation of the transactions contemplated
by the Merger Agreement, will become an indirect wholly-owned subsidiary of
the
Company (the “Reverse Merger 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
B
hereto;
and
WHEREAS,
as an inducement to the Purchasers to enter into the Purchase Agreement, the
Principal Stockholders have 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 thresholds for the 12-month
periods ending June 30, 2008 (“2008”)
and
June 30, 2009 (“2009”):
(a) In
2008,
(i) Both Net Income, as defined in accordance with US GAAP and reported by
the
Company in its audited financial statements for 2008 (the “2008
financial statements”)
exceeds $8.88 million and Cash from Operations, as reported by the Company
in
the 2008 financial statements exceed $6.5 million and (ii) Net Income Earnings
Per Share equals or exceeds $0.22 per share on a fully diluted basis and Cash
from Operations Earnings Per Share equals or exceeds $0.16 per share on a fully
diluted basis. “Earnings Per Share” is to be calculated by dividing (A) the
respective result of Net Income and Cash from Operations, as reported 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 (B)
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 thresholds set forth in (i) and (ii) above shall be collectively
referred to herein as the “2008
Performance Thresholds”);
(b) In
2009,
(i) Both Net Income, as defined in accordance with US GAAP and reported by
the
Company in its audited financial statements for 2009 (the “2009
financial statements”)
exceeds $13 million and Cash from Operations, as reported by the Company in
the
2009 financial statements exceed $11 million and (ii) Net Income Earnings Per
Share equals or exceeds $0.33 per share on a fully diluted basis and Cash from
Operations Earnings Per Share equals or exceeds $0.28 per share on a fully
diluted basis. “Earnings Per Share” is to be calculated by dividing (A) the
respective result of Net Income and Cash from Operations, as reported by the
Company in the 2009 financial statements plus
any
amounts that may have been recorded as charges or liabilities on the 2009
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
(“2009
Net Income”)
by (B)
the then Outstanding Shares (the performance thresholds set forth in (i) and
(ii) above shall be collectively referred to herein as the “2009
Performance Thresholds”).
In
event that the gross proceeds resulting from the sale of Units pursuant to
the
terms of the Purchase Agreement is less than $20 million, the Company, the
Purchaser Representative and the Purchasers have agreed that on or about July
1,
2008, the Net Income, Cash from Operations, Net Income Earnings Per Share and
Cash from Operations Earnings Per Share targets set forth in the first sentence
of this paragraph shall be amended to reflect the agreement of the parties
at
such time; 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.
1.3. The
parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall
be delivered based on the achievement of the 2008 Performance Thresholds as
set
forth below:
(i) If
the
Company does not achieve at least 50% of each of the 2008 Performance
Thresholds, then all of the Escrow Shares (the “2008
Escrow Shares”)
shall
be distributed on a pro rata basis to the Purchasers based on the number of
shares of Series A Preferred and Conversion Shares 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 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. Within five (5)
business days after the release of the 2008 Escrow Shares to the Purchasers,
each Principal Stockholder shall deposit into the escrow account maintained
by
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.
(ii) If
the
Company achieves between 50% and 95% of the 2008 Performance Thresholds, the
Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on
the
number of shares of Series A Preferred and Conversion Shares owned by such
Purchasers as of the date thereof, the number of 2008 Escrow Shares multiplied
by the percentage by which the lowest of the 2008 Performance Thresholds was
not
achieved and multiplied by 200%. By way of example, if the Company’s Earnings
Per Share for 2008 is an amount equal to 60% of the 2008 Performance Thresholds,
the Company’s Net Income reported on the 2008 financial statements is an amount
equal to 70% of the 2008 Performance Thresholds and the Company’s Cash from
Operations reported on the 2008 financial statements is an amount equal to
80%
of the 2008 Performance Thresholds, the Purchasers shall receive 200% of the
product of 40% of the 2008 Escrow Shares (100%-60%) and, the remaining Escrow
Shares shall continue to be held in escrow hereunder. 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 hold the remaining Escrow
Shares in escrow. Within five (5) business days after the release of the 2008
Escrow Shares to the Purchasers, each Principal Stockholder shall deposit into
the escrow account maintained by the Escrow Agent, stock certificates evidencing
such number of shares of Common Stock so that the number of Escrow Shares shall
equal the number of shares of Common Stock initially deposited pursuant to
Section 1.2.
(iii) If
the
Company achieves at least 95% of each of the 2008 Performance Thresholds, then
the Escrow Shares shall continue to be held in escrow hereunder.
1.4. The
parties hereby agree that the 2009 Escrow Shares (as hereinafter defined) shall
be delivered based on achievement of the 2009 Performance Thresholds as set
forth below:
(i) If
the
Company does not achieve at least 50% of each of the 2009 Performance
Thresholds, then all of the Escrow Shares (the “2009
Escrow Shares”),
shall
be distributed on a pro rata basis to the Purchasers based on the number of
shares of Series A Preferred and Conversion Shares owned by such Purchasers
as
of the date thereof. Within five (5) business days of the Purchaser
Representative’s receipt of the 2009 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 2009 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 50% and 95% of the 2009 Performance Thresholds, (a)
the
Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on
the
number of shares of Series A Preferred and Conversion Shares owned by such
Purchasers as of the date thereof, the number of 2009 Escrow Shares equal to
the
number of 2009 Escrow Shares multiplied by the percentage by which the lowest
of
2009 Performance Thresholds was not achieved and multiplied by 200% and (b)
the
remaining 2009 Escrow Shares shall be returned to each Principal Stockholder.
By
way of example, if the Company’s Earnings Per Share for 2009 is an amount equal
to 60% of the 2009 Performance Thresholds, the Company’s Net Income reported on
the 2009 financial statements is an amount equal to 70% of the 2009 Performance
Thresholds and the Company’s Cash from Operations reported on the 2009 financial
statements is an amount equal to 80% of the 2009 Performance Thresholds, the
Purchasers shall receive 200% of 40% of the 2009 Escrow Shares (100% - 60%)
and
the remaining 2009 Escrow Shares shall be returned to each Principal
Stockholder. Within five (5) business days of the Purchaser Representative’s
receipt of the 2009 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 2009 Escrow
Shares to the Purchasers and to each Principal Stockholder.
(iii) In
the
event the Company achieves at least 95% of each of the 2009 Performance
Thresholds, all of the 2009 Escrow 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 2009 Escrow Shares become
deliverable hereunder shall be entitled to their pro rata portion of such 2009
Escrow Shares calculated based on their ownership interest at the time when
such
2009 Escrow Shares become deliverable hereunder. Any 2009 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
Company.
1.5. If
the
Company fails to timely comply with its obligations set forth in Section 3.25
of
the Purchase Agreement (the “Listing
Obligation”),
then
1,000,000 shares of Common Stock collectively owned by the Principal
Stockholders (the “Penalty
Shares”)
shall
be distributed to the Purchasers on a pro rata basis as set forth in Section
3.25 of the Purchase Agreement. Within five (5) business days after the release
of the Penalty Shares to the Purchasers, the Principal Stockholders shall
deposit into the escrow account maintained by the Escrow Agent, stock
certificates evidencing an aggregate of 1,000,000 shares of Common
Stock.
1.6. If
the
Company does not achieve each of the 2008 Performance Thresholds or each of
the
2009 Performance Thresholds and/or if the Company does not comply with the
Listing Obligation, the Company shall use best efforts to promptly cause the
2008 Escrow Shares, the 2009 Escrow Shares or the Penalty Shares, as applicable,
to be delivered to the Purchasers, including causing its transfer agent promptly
to issue the certificates in the names of the Purchasers and causing its
securities counsel to provide any written instruction required by the Escrow
Agent in a timely manner so that the issuances and delivery contemplated above
can be achieved within five business days following delivery of the 2008
financial statements or 2009 financial statements in the case of the 2008 Escrow
Shares or the 2009 Escrow Shares, as applicable, to the Purchaser
Representative, or, within five business days of September 28, 2009, in the
case
of the Penalty Shares.
1.7. The
Company will provide the Purchaser Representative with (i) the Company’s audited
financial statements for 2008, prepared in accordance with US GAAP, on or before
March 31, 2009 and (ii) the Company’s audited financial statements for 2009,
prepared in accordance with US GAAP, on or before March 31, 2010, so as to
allow
the Purchaser Representative the opportunity to evaluate whether each of the
2008 Performance Thresholds and each of the 2009 Performance Thresholds were
attained. In the event that any Purchaser receives the financial information
prior to its dissemination by the Company in either a press release or in the
Company’s Commission Documents, the Company shall issue a press release
announcing the information or file a Form 8-K within one trading day of a
request by the Purchaser to make such information public.
1.8. Upon
the
written request of the Company and Purchaser Representative, the Escrow Agent
shall deliver the 2008 Escrow Shares, the 2009 Escrow Shares and the Penalty
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 STOCKHOLDERS
2.1. Each
Principal Stockholder hereby represents and warrants to the Purchasers and
the
Purchaser Representative as follows:
(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 the Lock-Up Agreement and/or 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.
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: Loeb & Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxxx Xxxxxxxx, Esq.
Tel
No.:000-000-0000
Fax
No.:
000-000-0000
If
to the
Company or the Principal Stockholders:
Xx.
00,
Xxxx Xxxx Xxxx, Xxx Xxx (Xxxxxx Xxxx) Development Area
Tianjin,
People’s Republic of China 300350
Attention:
Xxxx Xxxx
Tel.
No.:
00-00-0000-0000
Fax
No.:
00-00-0000-0000
With
a
copy to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx X. Xxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
If
to the
Purchaser
Vision
Opportunity China LP
Representative:
00
X.
00xx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxx
Tel.
No.:
(000) 000-0000
Fax
No.:
(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 Stockholders, the
Purchaser Representative and the Escrow Agent.
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. The
Escrow Agent has acted as legal counsel for one of the Purchasers and may
continue to act as legal counsel for such Purchaser from time to time,
notwithstanding its duties as the Escrow Agent hereunder. The Company and the
Purchasers consent to the Escrow Agent in such capacity as legal counsel for
one
of the Purchasers and waive any claim that such representation represents a
conflict of interest on the part of the Escrow Agent. The Company and the
Purchasers understand that the Escrow Agent is relying explicitly on the
foregoing provision in entering into this Escrow
Agreement.
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.
4.15. The
Company agrees to indemnify and hold harmless the Escrow Agent and its 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 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.
[Signature
Page Follows]
[SIGNATURE
PAGE TO SECURITIES ESCROW AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
10th
day of
June, 2008.
|
By:
|
/s/
Xxxx Xxxx
|
Name:
Xxxx Xxxx
Title:
Chief Executive Officer
PURCHASER
REPRESENTATIVE:
VISION
OPPORTUNITY CHINA LP
|
By:
|
/s/
Xxxx Xxxxxxxx
|
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
ESCROW
AGENT:
Loeb
& Loeb LLP
|
By:
|
/s/
Xxxxxxxx X. Xxxxxxxx
|
Name:
Xxxxxxxx X. Xxxxxxxx
Title:
Partner
PRINCIPAL
STOCKHOLDER:
|
By:
|
/s/
Li Shaoqing
|
Name:
Li
Shaoqing
Title:
