CLOSING ESCROW AGREEMENT
Exhibit
10.4
This CLOSING ESCROW AGREEMENT,
dated as of December 10, 2009 (this “Agreement”), is entered into
by and among Link Resources, Inc., a Nevada corporation (the “Company”), Euro Pacific
Capital, Inc. (the “Placement
Agent”) and Escrow, LLC, with its principal offices located at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the “Escrow Agent”). The Placement
Agent and the Company are sometimes each referred to herein as an “Escrowing Party” and
collectively, the “Escrowing
Parties.”
WITNESSETH:
WHEREAS, the Company proposes
to make a private offering pursuant to the Securities Act of 1933, as amended
(the “Offering”)
consisting of a minimum of 4,650,000 units and a maximum of 6,000,000 units at a
purchase price of $2.00 per unit (each, a “Unit”). Each Unit shall
consist of (i) an eight (8%) percent senior convertible promissory note (the
“Notes”) of the Company
in the aggregate principal amount of $2.00, which Notes shall be convertible
into shares (the “Conversion
Shares”) of the Company’s common stock, par value $0.001 per share
(together with any securities into which such shares may be reclassified, the
“Common Stock”) and (ii)
a common stock purchase warrant to purchase one (1) share of Common Stock,
pursuant to a Securities Purchase Agreement to be entered into by and among the
Company and the investors party thereto (the “Investors,” and such
agreement, the “Securities
Purchase Agreement”), and
WHEREAS, the Placement Agent
is acting as the Company’s lead placement agent in connection with the
Offering;
WHEREAS, the Company and the
Placement Agent desire to deposit all gross proceeds received from subscriptions
for the shares of Units being sold (the “Securities”) in the Offering
(the “Escrowed Funds”)
with the Escrow Agent, to be held in escrow until joint written instructions are
received by the Escrow Agent from the Company and the Placement Agent, from time
to time, at which time the Escrow Agent will disburse the Escrowed Funds in
accordance with such joint written instructions (a “Closing”); and
WHEREAS, Escrow Agent is
willing to hold the Escrowed Funds in escrow in subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements and covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:
1. Appointment of Escrow
Agent. The Company and the Placement Agent hereby appoint
Escrow Agent as escrow agent in accordance with the terms and conditions set
forth herein and the Escrow Agent hereby accepts such
appointment. The Escrow Agent acknowledges that that corporate name
of the Company will change following the Closing to “Bohai Pharmaceuticals Group
Inc.” or another corporate name indentified in writing by the Company to the
Escrow Agent.
2. Delivery of the Escrowed
Funds.
2.1 The
Placement Agent and/or the Company will direct the Investors in the Offering to
deliver the Escrowed Funds to the Escrow Agent on or prior to the closing of the
Offering, addressed to the following account of the Escrow Agent:
Domestic
Wires
Virginia
Commerce Bank
Leesburg,
VA
ABA#
000000000
Account
Name: Escrow, LLC
Account
#: 00000000
Reference:
Link Resources, Inc.
International Wires
Correspondent
Bank: Xxxxx Fargo Bank
San
Francisco, CA
SWIFT#
XXXXXX0X
Credit
Acct: 000-00-00000
Virginia
Commerce Bank
FBO
Account Name: Escrow, LLC
Account
#: 00000000
Reference:
Link Resources, Inc.
2.2 (a)
All Investors’ checks shall be made payable to “Escrow, LLC, as agent for Link
Resources, Inc.” and shall be delivered to the Escrow Agent at the address set
forth on Exhibit
A hereto and shall be accompanied by a written account of subscription in
the form attached hereto as Exhibit B and executed by
each Investor (the “Subscription
Information”). The Escrow Agent shall, upon receipt of
Subscription Information, together with the related purchase price being paid by
such Investor therefore (the “Investment Amount”), deposit
the related Investment Amount of such Subscription Information in the Escrow
Account for collection; or (b) all funds to be wired shall be wired to the
account set forth in Section 2.1 above and written Subscription Information
shall be faxed or emailed to the Escrow Agent in accordance with the information
provided on Exhibit
A.
2.3 Any
checks which are received by Escrow Agent that are made payable to a party other
than the Escrow Agent shall be returned directly to the Placement Agent together
with any documents delivered therewith. Simultaneously with each
deposit of a check with the Escrow Agent, the Placement Agent shall provide the
Escrow Agent with the Subscription Information to include the name, address and
taxpayer identification number of each Investor and of the aggregate principal
amount of Securities subscribed for by such Investor. The Escrow Agent is not
obligated, and may refuse, to accept checks that are not accompanied by a
Subscription Information containing the requisite information.
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2.4 In
the event a wire transfer is received by the Escrow Agent and the Escrow Agent
has not received Subscription Information, the Escrow Agent shall notify the
Placement Agent. If the Escrow Agent does not receive the
Subscription Information by such Investor prior to close of business on the
third business day (days other than a Saturday or Sunday or other day on which
the Escrow Agent is not open for business in the State of Texas) after notifying
Placement Agent of receipt of said wire, the Escrow Agent shall return the funds
to such Investor.
3. Escrow Agent to Hold and
Disburse Escrowed Funds. The Escrow Agent will hold and
disburse the Escrowed Funds received by it pursuant to the terms of this
Agreement, as follows:
3.1 Upon
receipt of joint written instructions from the Company and the Placement Agent,
in substantially the form of Exhibit C hereto, the
Escrow Agent shall release the Escrowed Funds as directed in such
instructions.
3.2 In
the event this Agreement, the Escrowed Funds or the Escrow Agent becomes the
subject of litigation, the Company authorizes the Escrow Agent, at its option,
to deposit the Escrowed Funds with the clerk of the court in which the
litigation is pending, or a court of competent jurisdiction if no litigation is
pending, and thereupon the Escrow Agent shall be fully relieved and discharged
of any further responsibility with regard thereto. The Company also authorizes
the Escrow Agent, if it receives conflicting claims to the Escrow Funds, is
threatened with litigation or if the Escrow Agent shall desire to do so for any
other reason, to interplead all interested parties in any court of competent
jurisdiction and to deposit the Escrowed Funds with the clerk of that court and
thereupon the Escrow Agent shall be fully relieved and discharged of any further
responsibility hereunder to the parties from which they were
received.
3.3 In
the event that the Escrow Agent does not receive joint instructions by a date
that is January 31, 2010 (the “Escrow Termination Date”), all
Escrowed Funds shall be returned to the parties from which they were received,
without interest thereon or deduction therefrom.
4. Escrow
Holdback.
4.1 Pursuant
to the Securities Purchase Agreement, a minimum of $186,000 (if the Minimum
Amount is raised) and a maximum of $240,000 (if the Maximum Amount is raised),
or a pro rata portion in between such minimum and maximum amounts depending on
the gross proceeds of the Offering (the “Holdback Amount”) of the
Escrowed Funds, constituting an amount sufficient to satisfy the payment to the
Investors of one quarterly interest payment due on the aggregate principal
amount of all Notes issued in the Offering, shall be retained by the Escrow
Agent. Notwithstanding anything to the contrary contained herein,
upon written notification by the Placement Agent to the Escrow Agent that an
Event of Default (as defined in the Note) under Section 6(a) of the Notes has
been declared by the Placement Agent with respect to a failure by the Company to
make a quarterly interest payment in accordance with the Notes (the “Interest Payment Notice”), the
Escrow Agent shall disburse such portion of the Holdback Amount to the Investors
and in the amounts as set forth in the Interest Payment Notice.
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4.2 Until
such time as 75% of the aggregate Conversion Shares have been issued upon
conversion of the Notes, within thirty (30) days following the disbursement of
the Holdback Amount in accordance with Section 4.1 hereof,
the Company shall deposit an additional amount equal to the Holdback Amount with
the Escrow Agent to be retained and disbursed in accordance with Section 4.1
hereof.
4.3 It
is acknowledged and agreed that the Placement Agent may only deliver an Interest
Payment Notice following complete fulfillment by the Placement Agent of all
procedures, and the lapse of applicable cure periods, set forth in the Note
relating to the declaration of an Event of Default under Section 6(a) of the
Notes with respect to a failure by the Company to make a quarterly interest
payment in accordance with the Notes.
4.4 At
such time as 75% of the Conversion Shares have been issued upon conversion of
the Notes (provided that the Company is not then in material breach of any of
the Transaction Documents (as defined in the Securities Purchase Agreement)),
the Placement Agent shall provide a joint written instruction to the Escrow
Agent directing that all remaining funds of the Holdback Amount shall promptly
be disbursed to the Company.
5. Exculpation and
Indemnification of Escrow Agent.
5.1 The
Escrow Agent shall have no duties or responsibilities other than those expressly
set forth herein. The Escrow Agent shall have no duty to enforce any
obligation of any person other than itself to make any payment or delivery, or
to direct or cause any payment or delivery to be made, or to enforce any
obligation of any person to perform any other act. The Escrow Agent
shall be under no liability to the other parties hereto or anyone else, by
reason of any failure, on the part of any other party hereto or any maker,
guarantor, endorser or other signatory of a document or any other person, to
perform such person’s obligations under any such document. Except for
amendments to this Agreement referenced below, and except for written
instructions given to the Escrow Agent relating to the Escrowed Funds, the
Escrow Agent shall not be obligated to recognize any agreement between or among
any of the parties hereto, notwithstanding that references hereto may be made
herein and whether or not it has knowledge thereof.
5.2 The Escrow
Agent shall not be liable to the Company or the Placement Agent or to anyone
else for any action taken or omitted by it, or any action suffered by it to be
taken or omitted, in good faith and acting upon any order, notice, demand,
certificate, 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 believed by the Escrow Agent to be genuine and to
be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any of the
terms thereof, unless evidenced by written notice delivered to the Escrow Agent
signed by the proper party or parties and, if the duties or rights of the Escrow
Agent are affected, unless it shall give its prior written consent
thereto.
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5.3 The
Escrow Agent shall not be responsible for the sufficiency or accuracy of the
form, or of the execution, validity, value or genuineness of, any document or
property received, held or delivered to it hereunder, or of any signature or
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable to the
Company, the Placement Agent, or to anyone else in any respect on account of the
identity, authority or rights, of the person executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Escrow Agent shall have no responsibility with respect to the use or application
of the Escrowed Funds pursuant to the provisions hereof.
5.4 The
Escrow Agent shall have the right to assume, in the absence of written notice to
the contrary from the proper person or persons, that a fact or an event, by
reason of which an action would or might be taken by the Escrow Agent, does not
exist or has not occurred, without incurring liability to the Company, the
Placement Agent, or to anyone else for any action taken or omitted to be taken
or omitted, in good faith and in the exercise of its own best judgment, in
reliance upon such assumption.
5.5 To
the extent that the Escrow Agent becomes liable for the payment of taxes,
including withholding taxes, in respect of income derived from the investment of
the Escrowed Funds, or any payment made hereunder, the Escrow Agent may pay such
taxes; and the Escrow Agent may withhold from any payment of the Escrowed Funds
to the Company to the extent due to the Company in accordance with the
instructions delivered as set forth in Exhibit C such amount
as the Escrow Agent estimates to be sufficient to provide for the payment of
such taxes not yet paid, and may use the sum withheld for that
purpose. The Escrow Agent shall be indemnified and held harmless by
the Company against any liability for taxes and for any penalties in respect of
taxes, on such investment income or payments in the manner provided in Section
4.6.
5.6 The
Escrow Agent will be indemnified and held harmless by the Company from and
against all expenses, including all reasonable counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit or
proceedings involving any claim, or in connection with any claim or demand,
which in any way, directly or indirectly, arises out of or relates to this
Agreement, the services of the Escrow Agent hereunder, except for claims
relating to gross negligence or willful misconduct by Escrow Agent or breach of
this Agreement by the Escrow Agent, or the monies or other property held by it
hereunder. Promptly after the receipt of the Escrow Agent of notice
of any demand or claim or the commencement of any action, suit or proceeding,
the Escrow Agent shall, if a claim in respect thereof is to be made against an
Escrowing Party, notify each of them thereof in writing, but the failure by the
Escrow Agent to give such notice shall not relieve any such party from any
liability which an Escrowing Party may have to the Escrow Agent hereunder,
unless the Escrowing Party shall be materially prejudiced by such
delay.
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5.7 For
purposes hereof, the term “expense or loss” shall include all amounts paid or
payable to satisfy any claim, demand or liability, or in settlement of any
claim, demand, action, suit or proceeding settled with the express written
consent of the Escrow Agent, and all costs and expenses, including, but not
limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action, suit or
proceeding.
6. Termination of Agreement and
Resignation of Escrow Agent.
6.1 Termination. This
Agreement shall terminate with respect to the rights and obligations of the
Escrow Agent and the Escrowing Parties regarding the Escrowed Funds upon
disbursement of all of the Escrowed Funds in accordance with the terms
hereof. This Agreement shall terminate with respect to the rights and
obligations of the Escrow Agent and the Escrowing Parties regarding the Holdback
Amount upon return of the Holdback Amount to the Company in accordance with
Section 4.4
hereof.
6.2 Resignation.
(a) General. The
Escrow Agent may resign at any time and be discharged from its duties as Escrow
Agent hereunder by giving the Company and the Placement Agent at least twenty
(20) business days written notice thereof (the “Notice Period”).
(b) Regarding the Escrowed
Funds. Prior to the Closing and with respect to the Escrowed
Funds, upon providing the written notice called
for in Section 6.2(a) above, the Escrow Agent shall have no further obligation
hereunder except to hold as depositary the Escrow Funds that it receives until
the end of the Notice Period. In such event, the Escrow Agent shall
not take any action, other than receiving and depositing the Investors’ checks
and wire transfers in accordance with this Agreement, until the Company and the
Placement Agent have jointly designated a banking corporation, trust company,
attorney or other person as successor escrow agent. As soon as
practicable after its resignation, the Escrow Agent shall, if it receives
written notice from the Company and the Placement Agent within the Notice
Period, turn over to a successor escrow agent appointed jointly by the Company
and the Placement Agent all Escrowed Funds (less such amount as the Escrow Agent
is entitled to retain pursuant to Section 7) upon presentation of the document
appointing the new escrow agent and its acceptance thereof. If no new
agent is so appointed within the Notice Period, the Escrow Agent shall return
the Escrowed Funds to the parties from which they were received without interest
or deduction.
(c) Regarding the Holdback
Amount. Following the Closing and with respect to the Holdback
Amount, upon providing the written notice called
for in Section 6.2(a) above, the Escrow Agent shall have no further obligation
hereunder except to hold as depositary the Holdback Amount. In such event, the Escrow Agent shall not
take any action with respect to the Holdback Amount until the Company and the Placement Agent have jointly
designated a banking corporation, trust company, attorney or other person as
successor escrow agent. As soon as practicable after its
resignation, the Escrow Agent shall, if it receives written notice from the
Company and the Placement Agent within the Notice Period, turn over to a
successor escrow agent appointed jointly by the Company and the Placement Agent
the entirety of the Holdback Amount only upon presentation of the document
appointing the new escrow agent and its acceptance thereof. With
respect to the Holdback Amount only, the Escrow Agent shall not be permitted to
fully resign until a successor escrow agent is designated and the Holdback
Amount turned over to such successor escrow agent.
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7. Form of Payments by Escrow
Agent.
7.1 Any
payments of the Escrowed Funds by the Escrow Agent pursuant to the terms of this
Agreement shall be made by wire transfer unless directed to be made by check by
the Escrowing Parties.
7.2 All
amounts referred to herein are expressed in United States Dollars and all
payments by the Escrow Agent shall be made in such dollars.
8. Compensation. The
Company shall pay a documentation fee to the Escrow Agent of $2,000.00 and a
Closing fee of $500.00 out of the Closing. If the Escrow Agent is
required to return the funds to the Investors prior to the Closing, there will
be $25 fee for each wire returning the funds (it being agreed that that
aggregate return wire fees shall not exceed $5,000). A $250 fee will
be charged to the Company in the event that all or any portion of the Holdback
Amount is required to be disbursed pursuant to the terms of this
Agreement.
9. Notices. All
notices, requests, demands, and other communications provided herein shall be in
writing, shall be delivered by hand or by first-class mail, shall be deemed
given when received and shall be addressed to parties hereto at their respective
addresses first set forth on Exhibit A
hereto.
10. Further
Assurances. From time to time on and after the date hereof,
the Company and the Placement Agent shall deliver or cause to be delivered to
the Escrow Agent such further documents and instruments and shall do and cause
to be done such further acts as the Escrow Agent shall reasonably request (it
being understood that the Escrow Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.
11. Consent to Service of
Process. The Company and the Placement Agent hereby
irrevocably consent to the jurisdiction of the courts of the State of New York
and of any Federal court located in New York County, New York in connection with
any action, suit or proceedings arising out of or relating to this Agreement or
any action taken or omitted hereunder, and waives personal service of any
summons, complaint or other process and agrees that the service thereof may be
made by certified or registered mail directed to it at the address listed on
Exhibit A
hereto.
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12. Miscellaneous.
12.1 This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the party causing such instrument to be
drafted. The terms “hereby,” “hereof,” “hereunder,” and any similar
terms, as used in this Agreement, refer to the Agreement in its entirety and not
only to the particular portion of this Agreement where the term is
used. The word “person” shall mean any natural person, partnership,
corporation, government and any other form of business of legal
entity. All words or terms used in this Agreement, regardless of the
number or gender in which they were used, shall be deemed to include any other
number and any other gender as the context may require. This
Agreement shall not be admissible in evidence to construe the provisions of any
prior agreement.
12.2 This
Agreement and the rights and obligations hereunder of the parties to this
Agreement may not be assigned. This Agreement shall be binding upon
and inure to the benefit of each party’s respective successors, heirs and
permitted assigns. No other person shall acquire or have any rights
under or by virtue of this Agreement. This Agreement may not be changed orally
or modified, amended or supplemented without an express written agreement
executed by the Escrow Agent and the Escrowing Parties. This
Agreement is intended to be for the sole benefit of the parties hereto and their
respective successors, heirs and permitted assigns, and none of the provisions
of this Agreement are intended to be, nor shall they be construed to be, for the
benefit of any third person.
12.3 This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York. The representations and warranties contained in
this Agreement shall survive the execution and delivery hereof and any
investigations made by any party. The headings in this Agreement are
for purposes of reference only and shall not limit or otherwise affect any of
the terms thereof.
13. Execution of
Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed to be an original as of those whose
signature appears thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding when one or
more of the counterparts hereof, individually or taken together, are signed by
all the parties. In the event that any signature is delivered by
facsimile transmission or other electronic transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile
or other electronic signature page were an original thereof.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement on the day and year first
above written.
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ESCROW
AGENT:
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ESCROW,
LLC
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By:
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/s/ Xxxxxxx
Xxxxxxx
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Name:
Xxxxxxx Xxxxxxx
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Title: Vice
President
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COMPANY:
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LINK
RESOURCES, INC.
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By:
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/s/ Xxxxxxx
Xxxxxxx
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Name:
Xxxxxxx Xxxxxxx
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Title: President
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PLACEMENT
AGENT:
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EURO
PACIFIC CAPITAL, INC.
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By
:
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/s/ Xxxxxx
XxXxxx
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Name: Xxxxxx
XxXxxx
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Title:
Head of Capital Markets
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EXHIBIT
A
PARTIES
TO AGREEMENT
Link
Resources, Inc.
x/x
Xxxxxx Xxxxx Pharmaceuticals Group Co. Ltd.
Xx. 0
Xxxxx Xxxx, Xxxxx Xxxxxxxx
Xxxxxx,
Xxxxxxxx Xxxxxxxx, Xxxxx
Attention:
Hongwei Qu
Fax
Number: x00-0000-0000000
Email:
xxxxxx@xxxxxx.xxx
With
a copy to:
Ellenoff
Xxxxxxxx & Schole LLP
000 Xxxx
00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
Email:
xxxxxxxxxx@xxxxxx.xxx
Escrow,
LLC
000
Xxxxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx
Telephone:
000.000.0000
Fax:
000.000.0000
Email:
xxxxxxxx@xxxxxxxxx.xxx
Euro
Pacific Capital, Inc.
00 Xxxx
Xxxx Xxxx, 0xx Xxxxx
Xxxxxxxx,
XX 00000
Attention:
Mr. Xxxxxx Xxx
Telephone:
000-000-0000
Fax:
(000) 000-0000
Email:
xxxx@xxxxxxx.xxx
With
a copy to:
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP
0000 X
Xxxxxx, X.X.
Xxxxxxxxxx,
XX 00000-0000
Attention:
Xxxxx X. Xxxxxxxxxx, Esq.
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
Email:
xxxxx.xxxxxxxxxx@xxxxxxxxxxxx.xxx
EXHIBIT
B
SUBSCRIPTION
INFORMATION
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Name
of Investor
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Address
of Investor
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$
Amount of Securities
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Subscribed
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Subscription
Amount
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Submitted
Herewith
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Taxpayer
ID Number/
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Social
Security Number
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Signature
of Investor
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EXHIBIT
C
DISBURSEMENT
REQUEST
Pursuant to that certain Agreement by
and among Link Resources, Inc., Euro Pacific Capital, Inc., and Escrow, LLC, the
Company and Placement Agent hereby request disbursement of funds in the amount
and manner described below from Virginia Commerce Bank account number 00000000,
styled Escrow, LLC Escrow Account.
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Please
disburse to:
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Amount
to disburse:
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Form
of distribution:
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Payee:
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Name:
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Address:
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City/State:
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Zip:
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Please
disburse to:
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Amount
to disburse:
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Form
of distribution:
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Payee:
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Name:
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Address:
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City/State:
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Zip:
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Subscriptions Accepted
From
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Investor
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Amount
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Total:
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Statement
of event or condition which calls for this request for
disbursement:
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COMPANY:
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LINK
RESOURCES, INC.
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By:
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Name:
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Title:
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PLACEMENT
AGENT:
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EURO
PACIFIC CAPITAL, INC.
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By:
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Name:
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Title:
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