SECURITIES ESCROW AGREEMENT
Exhibit 10.3
THIS
SECURITIES ESCROW AGREEMENT (this “Agreement”), dated
May 13, 2008, is entered into by and among Certified Technologies Corporation, a
Nevada corporation (the “Parent”), Zhaoheng
Investment Limited (BVI), a British Virgin Islands corporation (“Company”), Xxxxxxx
Xxxxxx (“Xxxxxx”) and Xxxxxxx
Xxxxxxxx (“Xxxxxxxx” and
together with Xxxxxx, the “Principal
Stockholders”) and Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, with an
address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Escrow
Agent”). Capitalized terms used but not defined herein shall
have the meanings set forth in the Share Exchange Agreement (as defined
below).
W I T N E S S E T
H:
WHEREAS,
the Parent, the Company, and Xxxxxxxx Xx, the sole stockholder of the Company
(“Xx. Xx”),
have entered into a Share Exchange Agreement, dated as of May __, 2008 (the
“Share Exchange
Agreement”), pursuant to which, among other things, Xx. Xx will exchange
all of his shares of Company Stock for the issuance of an aggregate of
69,686,970 shares of Parent Stock, which Parent Stock will be issued to Embedded
Internet (the “Share
Exchange”);
WHEREAS,
as an inducement to the Company to enter into the Share Exchange Agreement, the
Principal Stockholders have agreed to place the Escrow Shares (as defined in
Section 1.2 below) into escrow for the benefit of the Company and to distribute
such Escrow Shares to the Company in the event the Company exercises its rights
under Section 8.07 of the Share Exchange Agreement ; and
WHEREAS,
the Parent, the Company and the Principal Stockholders 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 (the “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,
the Principal Stockholders shall deliver to the Escrow Agent stock certificates
evidencing an aggregate of 444,498 shares of Common Stock, along with undated
stock powers executed in blank, as set forth on Schedule A (the
“Escrow
Shares”).
1.3 The
parties hereby agree that the Escrow Shares shall be delivered as set forth
below:
(i) The
Escrow Shares shall be held in the Escrow Account for a period of two (2) years
from the date of this Agreement (the “Escrow
Period”).
(ii) In the
event that the Company notified the Escrow Agent that the Company is exercising
its rights under Section 8.07 of the Share Exchange Agreement and this
Agreement, the Escrow Agent shall deliver the Escrow Shares to the Company
pursuant to the written instructions of the Company.
(iii) At the
end of the Escrow Period, the Escrow Agent shall deliver to the Principal
Stockholders, the Escrow Shares remaining in the Escrow Account, on a pro rata
basis, at the applicable address set forth in Section 3.3 hereof.
(iv) Notwithstanding
the foregoing to the contrary, if, during the Escrow Period, Xx. Xx, together
with his affiliates, successors and assigns, beneficially owns less than fifty
percent (50%) of the aggregate outstanding shares of Common Stock of the Parent,
the Escrow Agent shall promptly deliver any Escrow Shares remaining in the
Escrow Account to the Principal Stockholders, the Company shall no longer not
have any rights to the Escrow Shares and this Agreement shall terminate and be
of no further force and effect.
ARTICLE
II
REPRESENTATIONS
OF THE PRINCIPAL STOCKHOLDERS
2.1 Each of the Principal Stockholders
hereby represents and warrants to the Company as follows:
(i) The
Principal Stockholder is the record and beneficial owner of the Escrow Shares
set forth next to such Principal Stockholder’s name on Schedule A 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 such Escrow Shares or to enter into this Agreement other
than transfer restrictions under applicable federal and state securities
laws.
(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 Parent or any indenture, mortgage, deed of trust
or other agreement or instrument binding upon the Principal Stockholder or
affecting such 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
MISCELLANEOUS
3.1 The
Company will pay Escrow Agent a total of $1,000.00 for all services rendered by
Escrow Agent hereunder.
3.2 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.
3.3 All
notices, communications and instructions required
or desired to be given under this Agreement must be in writing and shall be
deemed to be duly given if sent by registered or certified mail, return receipt
requested, or overnight courier to the following addresses:
If to
Escrow
Agent:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxxx, Esq.
Tel No.:
(000) 000-0000
Fax No.: (000) 000-0000
If to the
Parent:
Zhaoheng Investment Limited (BVI)
P.O. Bo
957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
Attention:
_________________________
Facsimile: (___)
___-____
If to the
Principal Stockholders:
Xxxxxxx
Xxxxxx
0000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
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.
3.4 This Agreement shall be binding upon
and shall inure to the benefit of the permitted successors and permitted assigns
of the parties hereto.
3.5 This 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 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.
3.6 Whenever required by the context of
this Agreement, the singular shall include the plural and masculine shall
include the feminine. This 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 Agreement.
3.7 The parties hereto expressly agree that
this 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 Agreement
shall only be brought in a state or Federal court sitting in New York City,
Borough of Manhattan.
3.8 The Escrow Agent’s duties hereunder may
be altered, amended, modified or revoked only by a writing signed by the
Company, the Principal Stockholders and the Escrow Agent.
3.9 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.
3.10 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.
3.11 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.
3.12 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 the Company and may continue
to
act as legal counsel for the Company
from time to time, notwithstanding its duties as the Escrow Agent
hereunder. The Company and the Principal Stockholders consent to the
Escrow Agent in such capacity as legal counsel for the Company and waive any
claim that such representation represents a conflict of interest on the part of
the Escrow Agent. The Company and the Principal Stockholders
understand that the Escrow Agent is relying explicitly on the foregoing
provision in entering into this Agreement.
3.13 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 Principal
Stockholders. In the event of any such resignation, the Principal
Stockholders and the Company shall appoint a successor Escrow Agent and the
Escrow Agent shall deliver to such successor Escrow Agent any Escrow Shares and
other documents held by the Escrow Agent. In addition, the Escrow
Agent shall resign and be discharged from its duties as escrow agent hereunder
if so requested in writing at any time by the Company and the Principal
Stockholders, jointly, provided, however, that such
resignation shall become effective only upon acceptance of appointment by a
successor escrow agent as provided above.
3.14 If the Escrow Agent reasonably requires
other or further instruments in connection with this Agreement or obligations in
respect hereto, the necessary parties hereto shall join in furnishing such
instruments.
3.15 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.
3.16 The Company and each Principal
Stockholder agree jointly and severally 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 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 13th
day of May, 2008.
|
CERTIFIED
TECHNOLOGIES CORPORATION
By:__________________________________
Name:
Title:
PRINCIPAL
STOCKHOLDERS:
____________________________________
XXXXXXX
XXXXXX
____________________________________
XXXXXXX
XXXXXXXX
ESCROW
AGENT:
XXXXXX
XXXXX XXXXXXXX & XXXXXXX LLP
By:____________________________________
Name:
Title:
|
Schedule
A
Name of Principal
Stockholder: Number of Escrow
Shares:
Xxxxxxx
Xxxxxx 222,249
Xxxxxxx
Xxxxxxxx 222,249
