ESCROW AGREEMENT
Exhibit
10.3
This
Escrow Agreement (this “Agreement”),
entered into as of this 16th day of February, 2007, is by and among Concept
Ventures Corporation, a Nevada corporation (the “Company”),
Mr.
Jiada Hu (the “Selling
Stockholder”),
Xxxx
Capital Partners, LLC ( “Xxxx”)
and
Xxxxxx Xxxx Xxxxx Raysman & Xxxxxxx LLP (hereinafter referred to as the
“Escrow
Agent”).
All
capitalized terms used but not defined herein shall have the meanings assigned
them in the Securities Purchase Agreement (as hereinafter defined).
BACKGROUND
The
Company, the Selling Stockholder and the purchasers listed in Exhibit
A
(the
“Purchasers”)
have
entered into a Securities Purchase Agreement (the “Purchase
Agreement”)
pursuant to which each Purchaser has agreed to purchase from the Company and
the
Selling Stockholder, and the Company and the Selling Stockholder have agreed
to
sell to each Purchaser, the number of shares of the common stock, par value
$0.001 per share, of the Company identified therein (the “Shares”).
The
Company, the Selling Stockholder and the Purchasers have agreed to establish
an
escrow on the terms and conditions set forth in this Agreement. Xxxx has acted
as placement agent in connection with the transactions contemplated by the
Purchase Agreement. The Escrow Agent has agreed to act as escrow agent pursuant
to the terms and conditions of this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the promises of the parties and the terms and
conditions hereof, the parties hereby agree as follows:
1. Appointment
of Escrow Agent.
The
Company, the Selling Stockholder and Xxxx hereby appoint the Escrow Agent as
escrow agent to act in accordance with the Purchase Agreement and the terms
and
conditions set forth in this Agreement, and the Escrow Agent hereby accepts
such
appointment and agrees to act in accordance with such terms and
conditions.
2. Establishment
of Escrow.
All
amounts instructed in the funds flow memorandum attached hereto as Exhibit
C
to be
provided to the Escrow Agent shall be deposited with the Escrow Agent in
immediately available funds by federal wire transfer or cashiers check to the
account set forth in Exhibit
B
to this
Agreement, such funds being referred to herein as the “Escrow
Funds”.
3. Segregation
of Escrow Funds.
The
Escrow Funds shall be segregated from the assets of the Escrow Agent and held
in
trust for the benefit of the Company, the Selling Stockholder and the Purchasers
in accordance herewith.
4. Receipt
and Investment of Funds.
(a) The
Escrow Agent agrees to place the Escrow Funds in a non-interest bearing and
federally insured depository account. Subject to Section 7(c) hereof, the Escrow
Agent shall have no liability for any loss resulting from the deposit of the
Escrow Funds.
(b) The
Escrow Agent shall cause to be prepared all income and other tax returns and
reports as the Escrow Agent, in its sole discretion, deems necessary or
advisable in order to comply with all tax and other laws, rules and regulations
applicable to the Escrow Funds.
5. Disbursement
of the Escrow Funds.
(a) The
Escrow Agent shall continue to hold the Escrow Funds delivered for deposit
hereunder by the Purchasers until the earlier of: (1) receipt of a joint written
notice from the Company and Xxxx, evidencing termination under Section 6.5(a)
of
the Purchase Agreement, (2) receipt of a written notice from the Company, the
Selling Stockholder or Xxxx evidencing termination under Section 6.5(b) of
the
Purchase Agreement (each of (1) and (2), a “Termination
Election”)
or (3)
receipt of a joint written notice from the Company, the Selling Stockholder
and
Xxxx that the conditions to closing under the Purchase Agreement have been
satisfied and to disburse the Escrow Funds in accordance with Section 5(b)
below.
(b) If
the
Escrow Agent receives a Termination Election prior to its receipt of the notice
contemplated under Section 5(a)(3), then the Escrow Agent shall return the
Escrow Funds delivered by the Purchasers as directed by the Purchasers. If
the
Escrow Agent receives the notice contemplated under Section 5(a)(3) prior to
a
Termination Election, then the Escrow Agent shall disburse the Escrow Funds
in
accordance with the funds flow memorandum attached hereto as Exhibit
C.
6. Interpleader.
Should
any controversy arise among the parties hereto with respect to this Agreement
or
with respect to the right to receive the Escrow Funds, the Escrow Agent shall
have the right to consult counsel and/or to institute an appropriate
interpleader action to determine the rights of the parties. The Escrow Agent
is
also hereby authorized to institute an appropriate interpleader action upon
receipt of a written letter of direction executed by the parties so directing
the Escrow Agent. If the Escrow Agent is directed to institute an appropriate
interpleader action, it shall institute such action not prior to thirty (30)
days after receipt of such letter of direction and not later than sixty (60)
days after such date. Any interpleader action instituted in accordance with
this
Section 6 shall be filed in any court of competent jurisdiction in New York,
New
York, and the portion of the Escrow Funds in dispute shall be deposited with
the
court and in such event the Escrow Agent shall be relieved of and discharged
from any and all obligations and liabilities under and pursuant to this
Agreement with respect to that portion of the Escrow Funds.
7. Exculpation
and Indemnification of Escrow Agent.
(a) The
Escrow Agent is not a party to, and is not bound by or charged with notice
of
any agreement out of which this escrow may arise. The Escrow Agent acts under
this Agreement as a depositary only and is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity
of
the subject matter of the escrow, or any part thereof, or for the form or
execution of any notice given by any other party hereunder, or for the identity
or authority of any person executing any such notice or depositing the Escrow
Funds. The Escrow Agent will have no duties or responsibilities other than
those
expressly set forth herein. The Escrow Agent will be under no liability to
anyone by reason of any failure on the part of any party hereto (other than
the
Escrow Agent) or any maker, endorser or other signatory of any document to
perform such person’s or entity’s obligations hereunder or under any such
document. Except for this Agreement and instructions to the Escrow Agent
pursuant to the terms of this Agreement, the Escrow Agent will not be obligated
to recognize any agreement between or among any or all of the persons or
entities referred to herein, notwithstanding its knowledge thereof.
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(b) The
Escrow Agent will not be liable for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, and may rely conclusively on, and will be protected
in
acting upon, any order, notice, demand, certificate, or opinion or advice of
counsel (including counsel chosen by the Escrow Agent), statement, instrument,
report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained) which is reasonably believed
by the Escrow Agent to be genuine and to be signed or presented by the proper
person or persons. The duties and responsibilities of the Escrow Agent hereunder
shall be determined solely by the express provisions of this Agreement and
no
other or further duties or responsibilities shall be implied, including, but
not
limited to, any obligation under or imposed by any laws of the State of New
York
upon fiduciaries.
(c) The
Escrow Agent will be indemnified and held harmless by the Company and the
Selling Stockholder from and against any expenses, including reasonable
attorneys’ fees and disbursements, damages or losses suffered by the Escrow
Agent in connection with any claim or demand, which, in any way, directly or
indirectly, arises out of or relates to this Agreement or the services of the
Escrow Agent hereunder; except, that if the Escrow Agent is guilty of willful
misconduct, fraud or gross negligence under this Agreement, then the Escrow
Agent will bear all losses, damages and expenses arising as a result of such
willful misconduct, fraud or gross negligence. 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, its standard hourly rates and charges then in effect. Promptly
after the receipt by the Escrow Agent of notice of any such demand or claim
or
the commencement of any action, suit or proceeding relating to such demand
or
claim, the Escrow Agent will notify the other parties hereto in writing. For
the
purposes hereof, the terms “expense”
and
“loss”
will
include all amounts paid or payable to satisfy any such claim or demand, or
in
settlement of any such claim, demand, action, suit or proceeding settled with
the express written consent of the parties hereto, and all costs and expenses,
including, but not limited to, reasonable attorneys’ fees and disbursements,
paid or incurred in investigating or defending against any such claim, demand,
action, suit or proceeding. The provisions of this Section 7 shall survive
the
termination of this Agreement.
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(d) The
Selling Stockholder and Xxxx acknowledge that they know that the Escrow Agent
has represented the Company in connection with this Agreement and that it may
continue to represent the Company in that connection and in connection with
the
transactions contemplated by this Agreement and the Purchase Agreement and
the
transactions relating to the Company’s alternative public offering, including,
but not limited to, in connection with any disputes that may arise under any
such agreements or transactions. The Escrow Agent shall not be precluded from
or
restricted in any way from representing the Company or any of its affiliates
or
otherwise acting as attorneys for the Company or any of its affiliates in any
matter, except for any legal proceeding or other matter related to this
Agreement. The Escrow Agent shall be permitted to represent the Company in
any
and all legal matters pertaining to the Purchase Agreement and the Company’s
alternative public offering, whether or not there is a dispute between the
Purchasers and the Company with respect to any such matter. The Selling
Stockholder and Xxxx consent to any such representation and waive any conflict
or appearance of conflict with respect to any such representation.
8. Resignation
of Escrow Agent.
At any
time, upon ten (10) days’ written notice to the parties hereto, the Escrow Agent
may resign and be discharged from its duties as Escrow Agent hereunder. As
soon
as practicable after its resignation, the Escrow Agent will promptly turn over
to a successor escrow agent appointed by the parties hereto all monies and
property held hereunder upon presentation of a document appointing the new
escrow agent and evidencing its acceptance thereof. If, by the end of the 10-day
period following the giving of notice of resignation by the Escrow Agent, the
parties hereto shall have failed to appoint a successor escrow agent, the Escrow
Agent may interplead the Escrow Funds into the registry of any court having
jurisdiction.
9. Method
of Distribution by Escrow Agent.
All
disbursements by the Escrow Agent pursuant to this Agreement will be made by
wire transfer of immediately available funds in accordance with the funds flow
memorandum attached hereto as Exhibit
C.
10. Records.
The
Escrow Agent shall maintain accurate records of all transactions hereunder.
Promptly after the termination of this Agreement or as may reasonably be
requested by the parties hereto from time to time before such termination,
the
Escrow Agent shall provide the parties hereto, as the case may be, with a
complete copy of such records, certified by the Escrow Agent to be a complete
and accurate account of all such transactions. The authorized representatives
of
each of the parties hereto shall have access to such books and records at all
reasonable times during normal business hours upon reasonable notice to the
Escrow Agent.
11. Matters
Relating to Xxxx.
The
Company and the Selling Stockholder agree to indemnify Xxxx to the same extent
that they indemnify the Escrow Agent hereunder. Furthermore, Xxxx shall be
entitled to the same exculpatory provisions applicable to the Escrow Agent,
as
set forth more specifically in Section 7 herein.
12. Notice.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a) on the date of
service if served personally on the party to whom notice is to be given, (b)
on
the day of transmission if sent by facsimile/email
transmission to the facsimile number/email address given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(c) on the day after delivery to Federal Express or similar overnight courier
or
the Express Mail service maintained by the United States Postal Service or
(d)
on the fifth day after mailing, if mailed to the party to whom notice is to
be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed, return receipt requested, to the party as
follows:
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If
to the
Escrow
Agent: Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
E-mail:
xxxxxxxxxxx@xxxxxx.xxx
If
to the
Company: Concept
Ventures Corporation
Room
2201
Tower A, Cyber Times Building
Tian’an
Cyber Park, Futian District
Shenzhen,
China 518040
Attention:
Mr. Jiada Hu
Facsimile:
00-000-0000-0000
If
to the
Selling To
the
address specified in the Purchase Agreement
Stockholder:
If
to
Xxxx: Xxxx
Capital Partners, LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
Attention:
Xxxxxx Xxxx
Facsimile:
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.
13. Execution
in Counterparts; Facsimile Execution.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Facsimile execution and delivery of this Agreement is legal, valid
and binding for all purposes.
14. Assignment
and Modification.
This
Agreement and the rights and obligations hereunder of any of the parties hereto
may not be assigned without the prior written consent of the other parties
hereto. Subject to the foregoing, this Agreement will be binding upon and inure
to the benefit of each of the parties hereto and their respective successors
and
permitted assigns. No other person will acquire or have any rights under, or
by
virtue of, this Agreement. No portion of the Escrow Funds shall be subject
to
interference or control by any creditor of any party hereto, or be subject
to
being taken or reached by any legal or equitable process in satisfaction of
any
debt or other liability of any such party hereto prior to the disbursement
thereof to such party hereto in accordance with the provisions of this
Agreement. This Agreement may be changed or modified only in writing signed
by
all of the parties hereto.
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15. APPLICABLE
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, USA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN.
THE PARTIES EXPRESSLY WAIVE SUCH DUTIES AND LIABILITIES, IT BEING THEIR INTENT
TO CREATE SOLELY AN AGENCY RELATIONSHIP AND HOLD THE ESCROW AGENT LIABLE ONLY
IN
THE EVENT OF ITS WILLFUL MISCONDUCT, FRAUD, OR GROSS NEGLIGENCE. ANY LITIGATION
CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE EXCLUSIVELY PROSECUTED
IN THE COURTS OF NEW YORK COUNTY, NEW YORK, USA, AND ALL PARTIES CONSENT TO
THE
EXCLUSIVE JURISDICTION AND VENUE OF THOSE COURTS.
16. Headings.
The
headings contained in this Agreement are for convenience of reference only
and
shall not affect the construction of this Agreement.
17. Attorneys’
Fees.
If any
action at law or in equity, including an action for declaratory relief, is
brought to enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys’ fees from the other
party (unless such other party is the Escrow Agent), which fees may be set
by
the court in the trial of such action or may be enforced in a separate action
brought for that purpose, and which fees shall be in addition to any other
relief that may be awarded.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
| The Company: |
CONCEPT
VENTURES CORPORATION
|
|
| |
|
|
| By: | /s/ Jiada Hu | |
|
Name:
Jiada Hu
Title:
CEO and President
|
||
| Selling Stockholder: |
MR.
JIADA HU
|
|
| |
|
|
| /s/ Jiada Xx | ||
|
|
||
| Xxxx: |
XXXX
CAPITAL PARTNERS, LLC
|
|
| |
|
|
| By: | /s/ Xxxxx Xxxxxxxx | |
|
Name:
Xxxxx Xxxxxxxx
Title:
Managing Director, Equity
Markets
|
||
| Escrow Agent: |
XXXXXX
XXXX XXXXX RAYSMAN & XXXXXXX
LLP
|
|
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxxxxx | |
|
Name:
Xxxxx X. Xxxxxxxxxx
Title:
Partner
|
||
