MAKE GOOD ESCROW AGREEMENT
Exhibit
10.3
This
Make
Good Escrow Agreement (the “Make Good Agreement”), dated as of March 7, 2007, is
entered into by and among Equicap, Inc., a Nevada corporation (the “Company”),
the Investors (as defined below), Sinoquest Management Ltd. (BVI), Xxxxx Xx,
SIJ
Holding Ltd, Xxxxxx Xxxxxxx, Solaris Capital Limited, Xxxx Xxxx, Xxxx Xxxxxxxx
and Xxxxxx Xxx in their individual capacities (“Make Good Pledgors”), vFinance
Investments, Inc. and Securities Transfer Corporation (hereinafter referred
to
as “Escrow Agent”).
WHEREAS,
each of the investors in the private offering of securities of the Company
(the
“Investors”) has entered into a Securities Purchase Agreement, dated as of the
date hereof (the “SPA”), evidencing their participation in the Company's private
offering (the “Offering”) of securities. As an inducement to the Investors to
participate in the Offering and as set forth in the SPA, the Make Good Pledgors
have agreed to place the “Escrow Shares” (as defined in Section 2 hereto) into
escrow for the benefit of the Investors in the event the Company fails to
satisfy certain financial thresholds.
WHEREAS,
pursuant to the requirements of the SPA, the Company and the Make Good Pledgors
have agreed to establish an escrow on the terms and conditions set forth in
this
Make Good Agreement;
WHEREAS,
the Escrow Agent has agreed to act as escrow agent pursuant to the terms and
conditions of this Make Good Agreement; and
WHEREAS,
all capitalized terms used but not defined herein shall have the meanings
assigned them in the SPA;
NOW,
THEREFORE, in consideration of the mutual promises of the parties and the terms
and conditions hereof, the parties hereby agree as follows:
1. Appointment
of Escrow Agent.
The Make
Good Pledgors and the Company hereby appoint Securities Transfer Corporation
as
Escrow Agent to act in accordance with the terms and conditions set forth in
this Make Good Agreement, and Escrow Agent hereby accepts such appointment
and
agrees to act in accordance with such terms and conditions.
2. Establishment
of Escrow.
Within
three Trading Days of the execution of the SPA, the Make Good Pledgors shall
deliver, or cause to be delivered, to the Escrow Agent certificates evidencing
10,140,846 shares (the “Escrow Shares”) of the Company's common stock, par value
$0.001 per share (“Common Stock”), along with bank signature stamped stock
powers executed in blank (or such other signed instrument of transfer acceptable
to the Company’s transfer agent to enable the transfer of such Escrow Shares in
accordance with Section 4). The Make Good Pledgors hereby agree that their
obligation to transfer shares of Common Stock to Investors pursuant to Section
4.11 of the SPA and this Make Good Agreement shall continue to run to the
benefit of any Investor who shall have transferred or sold all or any portion
of
its Shares, and that Investors shall have the right to assign its rights to
receive all or any such shares of Common Stock to other Persons in conjunction
with negotiated sales or transfers of any of its Shares.
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3. Representations
of Make Good Pledgors and the Company.
The Make
Good Pledgors and the Company hereby represent and warrant, severally and not
jointly, as to itself only, to the Investors as follows:
a. The
Escrow Shares of the Make Good Pledgors are validly issued, fully paid and
nonassessable shares of the Company, and free and clear of all pledges, liens
and encumbrances. Upon any transfer of Escrow Shares to Investors hereunder,
Investors will receive full right, title and authority to such shares as holders
of Common Stock of the Company.
b. Performance
of this Make Good Agreement and compliance with the provisions hereof will
not
violate any provision of any applicable law 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 any of the Make Good
Pledgors pursuant to the terms of any indenture, mortgage, deed of trust or
other agreement or instrument binding upon any of the Make Good Pledgors, other
than such breaches, defaults or liens which would not have a material adverse
effect taken as a whole.
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4. Disbursement
of Escrow Shares.
a. Fiscal
Years Ending June 30, 2007 and June 30, 2008.
The
Make Good Pledgors agree
that in
the
event that the after tax net income reported in the Annual Report on Form 10-KSB
of the Company for the fiscal year ending June 30, 2007, as filed with the
Commission, is less than $2,320,000 (the “2007 Guaranteed ATNI”) or the earnings
before income tax provisions and before minority interest reported in the Annual
Report on Form 10-KSB of the Company for the fiscal year ending June 30, 2007,
as filed with the Commission, is less than $3,200,000 (the “Minority Interest
2007 Guaranteed EBT”), the
Make
Good Pledgors will
transfer to the Investors on a pro rata basis
(determined by dividing each Investor’s Investment Amount by the aggregate of
all Investment Amounts delivered to the Company by the Investors under the
SPA)
for no consideration other than their part of their respective Investment Amount
at Closing,
3,042,254 shares of Common Stock (the “2007 Make Good Shares”). In
the
event that either (i) the earnings per share reported in the Annual Report
on
Form 10-KSB of the Company for the fiscal year ending June 30, 2008, as filed
with the Commission, is less than $0.343 on a fully diluted basis (as equitably
adjusted for any stock splits, stock combinations, stock dividends or similar
transactions) (the “2008 Guaranteed EPS”), (ii) the earnings per share before
income tax provision and before minority interest of the Company for the fiscal
year ending June 30, 2008, is less than $0.446 on a fully diluted basis (as
equitably adjusted for any stock splits, stock combinations, stock dividends
or
similar transactions) (the “Minority Interest 2008 Guaranteed EPS”), (iii) the
after tax net income reported in the Annual Report on Form 10-KSB of the Company
for the fiscal year ending June 30, 2008, as filed with the Commission, is
less
than $10,000,000
(the
“2008 Guaranteed ATNI”), or (iv) the earnings before income tax provision and
before minority interest reported in the Annual Report on Form 10-KSB of the
Company for the fiscal year ending June 30, 2008, as filed with the Commission,
is less than $13,020,000 (the “Minority Interest 2008 Guaranteed
EBT”),
the
Make
Good
Pledgors
will
transfer to the Investors on a pro rata basis (determined by dividing each
Investor’s Investment Amount by the aggregate of all Investment Amounts
delivered to the Company by the Investors under the SPA) for no consideration
other than their part of their respective Investment Amount at Closing,
7,098,592 shares of Common Stock (the “2008 Make Good Shares”). Notwithstanding
the foregoing, the parties agree that for purposes of determining whether or
not
the 2007 Guaranteed ATNI, the Minority Interest 2007 Guaranteed EBT, the 2008
Guaranteed EPS, the Minority Interest 2008 Guaranteed EPS, the 2008 Guaranteed
ATNI or the Minority Interest 2008 Guaranteed EBT have been achieved, (i) the
release of the 2007 Make Good Shares or the 2008 Make Good Shares to the Make
Good Pledgors, or any other Person designated by the Make Good Pledgors, as
a
result of the operation of this Make Good Agreement shall not be deemed to
be an
expense, charge, or other deduction from revenues even though GAAP may require
contrary treatment, (ii) any registration penalties (other than penalties which
may be owing by the Company due to the Company’s failure to file a Registration
Statement by the applicable Filing Date (as defined in the Registration Rights
Agreement)) accrued or paid by the Company for any registration rights will
be
excluded from the calculation of earnings before income tax provision and before
minority interest, after-tax net income, and earnings per share amounts, as
applicable, and (iii) any increase in taxes payable by the Company or any
Subsidiary as a result of PRC tax laws or implementing regulations promulgated
for the purpose of making more equal the tax treatment of foreign invested
entities (including sino-foreign joint ventures) and domestic entities which
may
become effective and applicable to the Company after the date of this Make
Good
Agreement shall not be included as an expense. In
the
event that the after tax net income reported in the Annual Report on Form 10-KSB
of the Company for the fiscal year ending June 30, 2007, as filed with the
Commission, is equal to or greater than the 2007 Guaranteed ATNI and the
earnings before income tax provision and before minority interest reported
in
the Annual Report on Form 10-KSB of the Company for the fiscal year ending
June
30, 2007, as filed with the Commission, is equal to or greater than the Minority
Interest 2007 Guaranteed EBT,
no
transfer of the 2007 Make Good Shares shall be required by the Make
Good
Pledgors
to the
Investors under this Section and such 2007 Make Good Shares shall be returned
to
the Make
Good
Pledgors
in
accordance with this Make Good Agreement. In
the
event that (i) the earnings per share reported in the Annual Report on Form
10-KSB of the Company for the fiscal year ending June 30, 2008, as filed with
the Commission, is equal to or greater than the 2008 Guaranteed EPS and the
earnings per share before income tax provision and before minority interest
of
the Company for the fiscal year ending June 30, 2008 is equal to or greater
than
the Minority Interest 2008 Guaranteed EPS and (ii) the after tax net income
reported in the Annual Report on Form 10-KSB of the Company for the fiscal
year
ending June 30, 2008, as filed with the Commission, is equal to or greater
than
the 2008 Guaranteed ATNI and the earnings before income tax provision and before
minority interest reported in the Annual Report on Form 10-KSB of the Company
for the fiscal year ending June 30, 2008, as filed with the Commission, is
equal
to or greater than the Minority Interest 2008 Guaranteed EBT,
no
transfer of the 2008 Make Good Shares shall be required by the Make
Good
Pledgors
to the
Investors under this Section and such 2008 Make Good Shares shall be returned
to
the Make
Good
Pledgors
in
accordance with the Make Good Agreement. Any
such
transfer of the 2007 Make Good Shares or the 2008 Make Good Shares under this
Section shall be made to an Investor or the Make Good Pledgors, as applicable,
within 10
Business
Days after
the date
which
the
2007
or 2008, as applicable, Annual Report on Form 10-KSB for the
Company
is filed
with the Commission and otherwise in accordance with this Make Good Agreement.
In
the
event that the after tax net income reported in the Annual Report on Form 10-KSB
of the Company for the fiscal year ending June 30, 2007, as filed with the
Commission, is less than the 2007 Guaranteed ATNI or the earnings before income
tax provision and before minority interest reported in the Annual Report on
Form
10-KSB of the Company for the fiscal year ending June 30, 2007, as filed with
the Commission is less than the Minority Interest 2007 Guaranteed EBT, the
Company has agreed that vFinance Investments, Inc. will provide prompt written
instruction to the Escrow Agent with regard to the distribution of the 2007
Make
Good Shares in an amount to each Investor as set forth on Exhibit
A
attached
hereto (as determined as set forth above). In
the
event that either (i) the earnings per share reported in the Annual Report
on
Form 10-KSB of the Company for the fiscal year ending June 30, 2008, as filed
with the Commission, is less than the 2008 Guaranteed EPS, (ii) the earnings
per
share before income tax provision and before minority interest of the Company
for the fiscal year ending June 30, 2008 is less than the Minority Interest
2008
Guaranteed EPS, (iii) the after tax net income reported in the Annual Report
on
Form 10-KSB of the Company for the fiscal year ending June 30, 2008, as filed
with the Commission, is less than the 2008 Guaranteed ATNI or (iv) the earnings
before income tax provision and before minority interest reported in the Annual
Report on Form 10-KSB of the Company for the fiscal year ending June 30, 2008,
as filed with the Commission, is less than the Minority Interest 2008 Guaranteed
EBT, the
Company has agreed that vFinance Investments, Inc. will provide prompt written
instruction to the Escrow Agent with regard to the distribution of the 2008
Make
Good Shares in an amount to each Investor as set forth on Exhibit
A
attached
hereto (as determined as set forth above). The Escrow Agent need only rely
on
the letter of instruction from vFinance Investments, Inc. in this regard and
notwithstanding anything to the contrary contained herein will disregard any
contrary instructions. In
the
event that the after tax net income reported in the Annual Report on Form 10-KSB
of the Company for the fiscal year ending June 30, 2007, as filed with the
Commission, is equal to or greater than the 2007 Guaranteed ATNI and the
earnings before income tax provision and before minority interest reported
in
the Annual Report on Form 10-KSB of the Company for the fiscal year ending
June
30, 2007, as filed with the Commission, is equal to or greater than the Minority
Interest 2007 Guaranteed EBT, vFinance Investments, Inc. shall provide prompt
written instructions to the Escrow Agent for the release of the 2007 Make Good
Shares to the Make Good Pledgors or to the registered holder of such shares
who
originally deposited such shares with the Escrow Agent. In
the
event that (i) the earnings per share reported in the Annual Report on Form
10-KSB of the Company for the fiscal year ending June 30, 2008, as filed with
the Commission, is equal to or greater than the 2008 Guaranteed EPS and the
earnings per share before income tax provision and before minority interest
of
the Company for the fiscal year ending June 30, 2008 is equal to or greater
than
the Minority Interest 2008 Guaranteed EPS and (ii) the after tax net income
reported in the Annual Report on Form 10-KSB of the Company for the fiscal
year
ending June 30, 2008, as filed with the Commission, is equal to or greater
than
the 2008 Guaranteed ATNI and the earnings before income tax provision and before
minority interest reported in the Annual Report on Form 10-KSB of the Company
for the fiscal year ending June 30, 2008, as filed with the Commission, is
equal
to or greater than the Minority Interest 2008 Guaranteed EBT,
vFinance
Investments, Inc. shall provide prompt written instructions to the Escrow Agent
for the release of the 2008 Make Good Shares to the Make Good Pledgors or to
the
registered holder of such shares who originally deposited such shares with
the
Escrow Agent.
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b. Pursuant
to Section 4(a), if vFinance Investments, Inc. delivers a notice to the Escrow
Agent that the Escrow Shares are to be transferred to the Investors, then the
Escrow Agent shall immediately forward either the 2007 Make Good Shares or
2008
Make Good Shares, as the case may be, to the transfer agent of the Company
for
reissuance to the Investors in an amount to each Investor as set forth on
Exhibit
A
attached
hereto and otherwise in accordance with this Make Good Agreement. The Company
covenants and agrees that upon any transfer of 2007 Make Good Shares or 2008
Make Good Shares to the Investors in accordance with this Make Good Agreement,
the Company shall promptly instruct its transfer agent to reissue such 2007
Make
Good Shares or 2008 Make Good Shares in the applicable Investor’s name and
deliver the same as directed by such Investor in an amount to each Investor
as
set forth on Exhibit
A
attached
hereto. If the Company does not promptly provide such instructions to the
transfer agent of the Company, then vFinance Investments, Inc. is hereby
authorized to give such re-issuance instruction to the transfer agent of the
Company. If a notice from vFinance Investments, Inc. pursuant to Section 4(a)
indicates that the Escrow Shares are to be returned to the Make Good Pledgors,
then the Escrow Agent will promptly deliver either the 2007 Make Good Shares
or
2008 Make Good Shares, as the case may be, to the Make Good Pledgors, and if
the
Escrow Agent has no address to which to deliver them, then to the
Company.
5. Duration.
This
Make Good Agreement shall terminate on the distribution of all the Escrow
Shares. The Company agrees to provide the Escrow Agent written notice of the
filing with the Commission of any financial statements or reports referenced
herein.
6. Escrow
Shares.
If any
Escrow Shares are deliverable to the Investors pursuant to the SPA and in
accordance with this Make Good Agreement, (i) the Make Good Pledgors covenants
and agrees to execute all such instruments of transfer (including stock powers
and assignment documents) as are customarily executed to evidence and consummate
the transfer of the Escrow Shares from the Make Good Pledgors to the Investors
and (ii) following its receipt of the documents referenced in Section 6(i),
the
Company covenants and agrees to promptly reissue such Escrow Shares in the
applicable Investor’s name and deliver the same as directed by such Investor.
Until such time as (if at all) the Escrow Shares are required to be delivered
pursuant to the SPA and in accordance with this Make Good Agreement, any
dividends payable in respect of the Escrow Shares and all voting rights
applicable to the Escrow Shares shall be retained by the Make Good Pledgors.
Should the Escrow Agent receive dividends or voting materials, such items shall
be passed immediately on to the Make Good Pledgors and shall not be invested
or
held for any time longer than is needed to effectively re-route such items
to
the Make Good Pledgors.
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7. Interpleader.
Should
any controversy arise among the parties hereto with respect to this Make Good
Agreement or with respect to the right to receive the Escrow Shares, Escrow
Agent and/or vFinance Investments, Inc. shall have the right to consult counsel
and/or to institute an appropriate interpleader action to determine the rights
of the parties. Escrow Agent and/or vFinance Investments, Inc. are also each
hereby authorized to institute an appropriate interpleader action upon receipt
of a written letter of direction executed by the parties so directing either
Escrow Agent or vFinance Investments, Inc. If Escrow Agent or vFinance
Investments, Inc. 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 7 shall be filed
in any court of competent jurisdiction in the State of New York, and the Escrow
Shares in dispute shall be deposited with the court and in such event Escrow
Agent and vFinance Investments, Inc. shall be relieved of and discharged from
any and all obligations and liabilities under and pursuant to this Make Good
Agreement with respect to the Escrow Shares and any other obligations hereunder.
8. Exculpation
and Indemnification of Escrow Agent and vFinance Investments, Inc.
a. 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. Escrow Agent acts under this
Make
Good 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. Escrow Agent will have
no
duties or responsibilities other than those expressly set forth herein. Escrow
Agent will be under no liability to anyone by reason of any failure on the
part
of any party hereto (other than 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 Make Good Agreement and
instructions to Escrow Agent pursuant to the terms of this Make Good Agreement,
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. vFinance Investments, Inc.’s sole obligation under this Make
Good Agreement is to provide prompt written instruction to Escrow Agent
(following such time as the Company files certain periodic financial reports
as
specified in Section 4 hereof) directing the distribution of the Escrow Shares.
vFinance Investments, Inc. will provide such written instructions upon review
of
the relevant earnings per share and/or After-Tax Net Income amount reported
in
such periodic financial reports as specified in Section 4 hereof. vFinance
Investments, Inc. is not charged with any obligation to conduct any
investigation into the financial reports or make any other investigation related
thereto. If any actual or alleged mistake or fraud of the Company, its auditors
or any other person (other than vFinance Investments, Inc.) in connection with
such financial reports of the Company, vFinance Investments, Inc. shall have
no
obligation or liability to any party hereunder.
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b. 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, absent gross negligence or willful
misconduct. Escrow Agent 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 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 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 Make Good 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
Company and the Make Good Pledgors each hereby, jointly and severally, indemnify
and hold harmless each of Escrow Agent, vFinance Investments, Inc. and any
of
their principals, partners, agents, employees and affiliates from
and
against any expenses, including reasonable attorneys' fees and disbursements,
damages or losses suffered by Escrow Agent or vFinance Investments, Inc. in
connection with any claim or demand, which, in any way, directly or indirectly,
arises out of or relates to this Make Good Agreement or the services of Escrow
Agent or vFinance Investments, Inc. hereunder; except, that if Escrow Agent
or
vFinance Investments, Inc. is guilty of willful misconduct, gross negligence
or
fraud under this Make Good Agreement, then Escrow Agent or vFinance Investments,
Inc., as the case may be, will bear all losses, damages and expenses arising
as
a result of such willful misconduct, gross negligence or fraud. Promptly after
the receipt by Escrow Agent or vFinance Investments, Inc. of notice of any
such
demand or claim or the commencement of any action, suit or proceeding relating
to such demand or claim, Escrow Agent or vFinance Investments, Inc., as the
case
may be, 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 8 shall survive the termination of this Make Good
Agreement.
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9. Compensation
of Escrow Agent.
Escrow
Agent shall be entitled to compensation for its services as stated in the fee
schedule attached hereto as Exhibit
B,
which
compensation shall be paid by the Company. The fee agreed upon for the services
rendered hereunder is intended as full compensation for Escrow Agent's services
as contemplated by this Make Good Agreement; provided,
however,
that in
the event that Escrow Agent renders any material service not contemplated in
this Make Good Agreement, or there is any assignment of interest in the subject
matter of this Make Good Agreement, or any material modification hereof, or
if
any material controversy arises hereunder, or Escrow Agent is made a party
to
any litigation pertaining to this Make Good Agreement, or the subject matter
hereof, then Escrow Agent shall be reasonably compensated by the Company for
such extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney's fees, occasioned by any delay, controversy, litigation
or
event, and the same shall be recoverable from the Company. Prior
to
incurring any costs and/or expenses in connection with the foregoing sentence,
Escrow Agent shall be required to provide written notice to the Company of
such
costs and/or expenses and the relevancy thereof and Escrow Agent shall not
be
permitted to incur any such costs and/or expenses prior to receiving written
approval from the Company, which approval shall not be unreasonably
withheld.
10. Resignation
of Escrow Agent.
At any
time, upon ten (10) days' written notice to the Company, Escrow Agent may resign
and be discharged from its duties as Escrow Agent hereunder. As soon as
practicable after its resignation, Escrow Agent will promptly turn over to
a
successor escrow agent appointed by the Company the Escrow Shares 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 Escrow Agent, the Company shall have failed to
appoint a successor escrow agent, Escrow Agent may interplead the Escrow Shares
into the registry of any court having jurisdiction.
11. Records.
Escrow
Agent shall maintain accurate records of all transactions hereunder. Promptly
after the termination of this Make Good Agreement or as may reasonably be
requested by the parties hereto from time to time before such termination,
Escrow Agent shall provide the parties hereto, as the case may be, with a
complete copy of such records, certified by 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 Escrow
Agent and at the requesting party’s expense.
12. Notice.
All
notices, communications and instructions required or desired to be given under
this Make Good 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 addresses listed on the signature page hereto.
13. Execution
in Counterparts.
This
Make Good 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.
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14. Assignment
and Modification.
This
Make Good 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 and the Investors. Subject to the foregoing, this Make
Good
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 Make Good
Agreement. No portion of the Escrow Shares 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 Make Good Agreement.
This
Make Good Agreement may be amended or modified only in writing signed by all
of
the parties hereto and the Investors.
15. Applicable
Law.
This
Make Good Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of laws thereof.
16. Headings.
The
headings contained in this Make Good Agreement are for convenience of reference
only and shall not affect the construction of this Make Good 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 Make Good Agreement,
the
prevailing party shall be entitled to recover reasonable attorneys' fees from
the other party (unless such other party is the Escrow Agent or vFinance
Investments, Inc. Inc.), 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.
18. Authorized
Signers.
The
Company will execute Exhibit
C-1
and
deliver an executed Exhibit
C-2
to this
Make Good Agreement concurrent with the execution hereof.
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IN
WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as
of
the date set forth opposite their respective names.
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COMPANY:
EQUICAP, INC.
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| By: | ||
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Name: Xxxxx Xxxx |
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| Title: Chairman and President | ||
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SINOQUEST
MANAGEMENT LTD.
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| By: | ||
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Name: |
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| Title: | ||
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XXXXX
XX
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SIJ
HOLDING LTD.
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| By: | ||
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Name:
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| Title: | ||
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XXXXXX
XXXXXXX
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SOLARAS
CAPITAL LIMITED
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| By: | ||
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Name: |
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| Title: | ||
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XXXX
XXXX
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XXXX
XXXXXXXX
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XXXXXX
XXX
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INVESTORS:
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Address:
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ESCROW
AGENT:
SECURITIES
TRANSFER CORPORATION
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Address:
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VFINANCE
INVESTMENTS , INC.:
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|
| By: | ||
|
Address:
|
||
Exhibit
A
The
table
below represents the number of 2007 Make Good Shares and 2008 Make Good Shares,
respectively, deposited with the Escrow Agent by the Make Good Pledgors and
subject to release to the Investors in accordance with the operation of Section
4 of the attached Make Good Agreement.
|
Make
Good 2007
|
Make
Good 2008
|
Total
|
||||||||
|
Sinoquest
Management Ltd. (BVI)
|
613,006
|
1,430,347
|
2,043,353
|
|||||||
|
Xx.
Xxxxx Xx (U.S.)
|
1,076,493
|
2,511,818
|
3,588,311
|
|||||||
|
SIJ
Holding Ltd. (BVI)
|
569,355
|
1,328,495
|
1,897,850
|
|||||||
|
Xx.
Xxxxxx Xxxxxxx (U.S.)
|
563,249
|
1,314,247
|
1,877,496
|
|||||||
|
Solaris
Capital Limited (Belize)
|
75,914
|
177,133
|
253,047
|
|||||||
|
Mr.
Xxxx Xxxx (China)
|
37,957
|
88,566
|
126,523
|
|||||||
|
Xx.
Xxxx Xxxxxxxx (U.S.
|
53,140
|
123,993
|
177,133
|
|||||||
|
Xx.
Xxxxxx Xxx (U.S.)
|
53,140
|
123,993
|
177,133
|
|||||||
|
Total
|
3,042,254
|
7,098,592
|
10,140,846
|
|||||||
The
table
below represents the number of 2007 Make Good Shares and 2008 Make Good Shares,
respectively, which shall be released to each Investor in accordance with the
operation of Section 4 of the attached Make Good Agreement.
|
Make
Good 2007
|
|
Make
Good 2008
|
|
Total
|
||||||
|
The
Pinnacle Fund, LP
|
507,042
|
1,183,099
|
1,690,141
|
|||||||
|
Pinnacle
China Fund, LP
|
1,014,086
|
2,366,197
|
3,380,283
|
|||||||
|
Atlas
Capital Master Fund LP
|
82,394
|
192,254
|
274,648
|
|||||||
|
Atlas
Capital (Q.P.), L.P.
|
44,366
|
103,521
|
147,887
|
|||||||
|
Westpark
Capital LP
|
253,521
|
591,549
|
845,070
|
|||||||
|
Sandor
Capital Master Fund, LP
|
77,400
|
180,600
|
258,000
|
|||||||
|
Vision
Opportunity Master Fund Ltd.
|
253,521
|
591,549
|
845,070
|
|||||||
|
BTG
Investments LLC
|
50,760
|
118,440
|
169,200
|
|||||||
|
Jayhawk
Private Equity Fund, L.P.
|
571,093
|
1,332,549
|
1,903,642
|
|||||||
|
Jayhawk
Private Equity Co-Invest Fund, L.P.
|
35,957
|
83,900
|
119,857
|
|||||||
|
Xxxxxx
Family Foundation
|
152,114
|
354,934
|
507,048
|
|||||||
|
Total
|
3,042,254
|
7,098,592
|
10,140,846
|
|||||||
Exhibit
A
Exhibit
B
ESCROW
AGENT FEES
US
$2,500
Exhibit B
Exhibit
C-1
CERTIFICATE
AS TO AUTHORIZED SIGNATURES
Account
Name:
Account
Number:
The
specimen signatures shown below are the specimen signatures of the individuals
who have been designated as authorized representatives of the Company and are
authorized to initiate and approve transactions of all types for the
above-mentioned account on behalf of the Company.
|
Name
/ Title
|
Specimen
Signature
|
|
Xxxxx
Xxxx
Chairman
and President
|
Signature
|
|
Xxxxx
Xx,
Chief
Executive Officer
|
Signature
|
Exhibit
C-1
Exhibit
C-2
CERTIFICATE
AS TO AUTHORIZED SIGNATURES
Account
Name:
Account
Number:
The
specimen signatures shown below are the specimen signatures of the individual
who has been designated as the authorized representative of vFinance
Investments, Inc. and is authorized to provide the documents, instruments and/or
consents, including the written consents specified in Section 4, relating to
the
Investors and specified in the Make Good Agreement.
|
Name
/ Title
|
Specimen
Signature
|
|
.
|
Signature
|
|
Signature |
Exhibit
C-2
