INVESTOR RELATIONS ESCROW AGREEMENT
This
AGREEMENT (the “Agreement”) made as of January
20, 2010 by and between Weikang Bio-Technology Group Company, Inc., a Nevada
corporation (the “Issuer”), Xx. 000 Xxxxxxx
Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxxxxx Xxxxxxxx, PRC 150020, Xxxxxx &
Xxxxxx, LLP, 000 Xxxxx 0 Xxxxx, 0xx
Xxxxx, Xxxxxxxxx, XX 00000 (the “Escrow Agent”) and Opus
Holdings Three, Ltd. (the “Subscriber
Representative”).
WITNESETH:
WHEREAS, the Issuer is
offering to the subscribers on a “best efforts” basis, up to $5,000,000 of its
common stock, $0.0001 par value per share (the “Purchased Shares”) at a per
share purchase price of $1.70 and Series A and Series B common stock purchase
warrants (the “Offering”), in reliance upon
an exemption from securities registration afforded by the provisions of Section
4(2), Section 4(6), Regulation D and/or Regulation S as promulgated by the
United States Securities and Exchange Commission under the Securities Act of
1933, as amended;
WHEREAS, the Issuer proposes
to establish an escrow account (the “Escrow Account”), which shall
include One Hundred Fifty Thousand Dollars ($150,000) of the Offering proceeds
from the initial closing to be used for investor relations fees (the “Escrow Funds”); and the Escrow
Agent is willing to establish the Escrow Account on the terms and subject to the
conditions hereinafter set forth;
WHEREAS, the Subscriber
Representative has appointed Xxxx Xxxxxx as the IR representative (the “IR Representative”) to act on
behalf of the Issuer in designating the disbursement of the Escrow Funds to an
investor relations firm to be designated by the Subscriber
Representative.
NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, the parties
hereto hereby agree as follows:
1. Appointment of Escrow
Agent. The Issuer and Subscriber Representative hereby appoint Xxxxxx
& Xxxxxx, LLP as escrow agent to act in accordance with the terms and
conditions set forth in this Agreement, and the Escrow Agent hereby accepts such
appointment and agrees to establish the Bank Account on the terms and subject to
the conditions hereinafter set forth.
2. Establishment of the Bank
Account. The Escrow Agent shall establish a non-interest-bearing bank
account at the branch of the Bank selected by the Escrow Agent (heretofore
defined as the “Bank
Account”). The purpose of the Bank Account is for (a) the deposit of the
Escrow Funds by the Issuer, and (b) the disbursement of collected funds, all as
described herein.
3. Delivery of the Escrow
Funds. The Issuer hereby directs the Escrow Agent to allocate the Escrow
Funds separately from the proceeds of the Offering at the closing, to be held
and disbursed by the Escrow Agent as provided in this Agreement. The Escrow
Funds shall be held by the Escrow Agent in the Bank Account as
follows:
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Bank Address:
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Wachovia
Bank NA
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000
Xxxx Xxxx Xxxxxx
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Xxxxxxxx,
Xxx Xxxxxx 00000
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ABA No.: 000000000
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Account: Xxxxxx & Jaclin LLP Attorney Trust Account
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Account No.: 2000013292968
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Attn: Xxxxxxxx X. Xxxxxxx, Esq.
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Reference: Weikang Bio-Technology Group Company,
Inc.
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4. Disbursements from the Bank
Account. The Escrow Agent shall hold the Escrow Funds in accordance with
the terms of this Agreement. The Subscriber Representative will appoint an
individual (the “IR
Representative”) to designate the disbursement of the Escrow Funds to an
investor relations firm chosen by the Subscriber Representative. The Escrow
Agent shall receive a disbursement approval form signed by the IR Representative
for any disbursements made from the Escrow Account. If the entire Escrow Funds
are not disbursed within two (2) years from the date hereof, the balance of the
Escrow Funds will be returned to the Issuer.
5. Duration. This
Agreement shall terminate upon the disbursement of the entire Escrow Funds in
accordance with Section 4.
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
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 Escrow Funds in
dispute shall be deposited with the court and in such event Escrow Agent shall
be relieved of and discharged from any and all obligations and liabilities under
and pursuant to this Agreement with respect to the Escrow Funds.
7. Exculpation and
Indemnification of Escrow Agent.
7.1 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. 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.
7.2 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 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.
7.3 The
Escrow Agent will be indemnified and held harmless, jointly and severally, by
the Issuer 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 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. 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.
8. Fees and Expenses.
Upon closing of the Offering, the Issuer shall pay to the Escrow Agent a fee of
$2,500 as reimbursement for agreeing to perform the services set forth in this
Agreement. In addition, the Issuer agrees to pay the Escrow Agent’s costs and
expenses including reasonable attorney’s fees in the event of any dispute or
litigation threatened or commenced which requires the Escrow Agent in its
opinion to refer such matter to its attorneys. Escrow Agent will incur no
liability for any delay reasonably required to obtain such advice of
counsel.
9. Resignation of Escrow
Agent. At any time, upon five (5) days’ written notice to the Issuer, 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 Issuer the
Escrow Funds held hereunder upon presentation of a document appointing the new
escrow agent and evidencing its acceptance thereof. If, by the end of the 5-day
period following the giving of notice of resignation by the Escrow Agent, the
Issuer 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.
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. Notice. 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 +
Xxxxxx, LLP
000 Xxxxx
0 Xxxxx, 0xx
Xxxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxxx X. Xxxxxxx, Esq.
If to the
Issuer:
Weikang
Bio-Technology Group Company, Inc.
Xx. 000
Xxxxxxx Xxxxxx, Xxxxxx District, Harbin
Heilongjiang
province, PRC 150020
Attention:
Mr. Xxx Xxxx, Chairman
If to the
Subscriber Representative:
Opus
Holdings Three, Ltd.
00000
Xxxxxxxxx Xxxx, Xxxxx X-0
Xxxxxxx,
XX 00000
Attention:
Opus Holdings Three Management, LLC
Its
General Partner
Xxxxxxx
X. Xxxx, Manager
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.
12. Execution in
Counterparts. 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.
13. 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.
14. Applicable Law. This
Agreement shall be governed by and construed with the laws of the State of New
York applicable to contracts made and to be performed therein. Any litigation
concerning the subject matter of this Agreement shall be exclusively prosecuted
in the state or federal courts located in New York, New York, and all parties
consent to the exclusive jurisdiction and venue of those courts.
15. Headings. The
headings contained in this Agreement are for convenience of reference only and
shall not affect the construction of this Agreement.
16. 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.
[Signatures
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and
year first above written.
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XXXXXX
& JACLIN, LLP
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By:
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/s/ Xxxxx X. Xxxxxx | ||
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Name:
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Xxxxx X. Xxxxxx | ||
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Title:
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Partner
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WEIKANG
BIO-TECHNOLOGY GROUP
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COMPANY,
INC.
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By:
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Name:
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Title:
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OPUS
HOLDINGS THREE, LTD.
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By:
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Name:
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Title:
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and
year first above written.
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XXXXXX
& XXXXXX, LLP
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By:
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Name:
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Title:
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WEIKANG
BIO-TECHNOLOGY GROUP
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COMPANY,
INC.
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By:
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Name:
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Title:
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OPUS
HOLDINGS THREE, LP
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By:
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/s/ Xxxxxxx Xxxx and /s/ Xxxxxx Xxxx | |||
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Name:
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XXXXXXX
XXXX AND XXXXXX XXXX,
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Title:
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MANAGERS OF
OPUS HOLDINGS THREE MANAGEMENT, LLC,
ITS
GENERAL
PARTNER
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