ESCROW AGREEMENT
Exhibit
10.8
This Escrow Agreement is made and
entered into as of the ___ day of _________, 2010, by and among XXXXXXXX &
XXXXXXXXX, INCORPORATED, a Virginia corporation (the “Underwriter”), QINGDAO
FOOTWEAR, INC., a Delaware company (the “Company”) and SUNTRUST BANK (the
“Escrow Agent”).
R E C I T
A L S:
A. The
Company proposes to sell a minimum of 833,333 shares of common stock and a
maximum of 1,000,000 shares of common stock (the “Shares”) of the Company at a
price of $_____ per share on a “best efforts, minimum/maximum” basis (the
“Offering”).
B. The
Company has retained the Underwriter, as agent for the Company to sell the
Shares in the Offering, and the Underwriter has agreed to sell the shares in the
Offering as the Company’s agent.
C. The
Escrow Agent is willing to hold the proceeds of the Offering in escrow pursuant
to this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements contained in this Agreement,
it is hereby agreed as follows:
1. Establishment of the Escrow
Agent. Contemporaneously herewith, the parties have
established a non-interest-bearing account with the Escrow Agent, which escrow
account is entitled “Qingdao Footwear, Inc. Escrow Account” (the “Escrow
Account”). The Underwriter will transfer funds directly to the Escrow
Agent as directed by its customers and will instruct other purchasers of the
Shares to make checks payable to the Escrow Agent.
2. Escrow
Period. The escrow period (the “Escrow Period”) shall begin
with the commencement of the Offering and shall terminate upon the earlier to
occur of the following dates:
(a) the
date on which the Escrow Agent confirms that it has received in the Escrow
Account gross proceeds of $_____________, representing the funds necessary to
purchase the Shares (the “Maximum”);
(b) December
31, 2010; or
(c) the
date on which the Underwriter and the Company notify the Escrow Agent in writing
that the Offering has been terminated.
During the Escrow Period, the Company
is aware and understands that it is not entitled to any funds received into
escrow and no amounts deposited in the Escrow Account shall become the property
of the Company or any other entity, or be subject to the debts of the Company or
any other entity.
3. Deposits into the Escrow
Account. The Underwriter agrees that it shall deliver to the
Escrow Agent for deposit in the Escrow Account all monies received from
purchasers of the Shares by noon of the next business day after receipt together
with a written account of each sale, which account shall set forth, among other
things, (i) the purchaser’s name and address, (ii) the number of Shares
purchased by the purchaser, (iii) the amount paid therefor by the purchaser,
(iv) whether the consideration received from the purchaser was in the form of a
check, draft or money order, and (v) the purchaser’s social security or tax
identification number. The Escrow Agent agrees to hold all monies so
deposited in the Escrow Account (the “Escrow Amount”) for the benefit of the
parties hereto until authorized to disburse such monies under the terms of this
Agreement.
4. Disbursements from the
Escrow Account. In the event the Escrow Agent does not receive
minimum deposits totaling $____________ prior to the termination of the Escrow
Period, or if the Underwriter and the Company notify the Escrow Agent that the
Offering has been terminated, the Escrow Agent shall promptly refund to each
purchaser the amount received from the purchaser, without deduction, penalty, or
expense to the purchaser, and the Escrow Agent shall notify the Company and the
Underwriter of its distribution of the funds. The purchase money
returned to each purchaser shall be free and clear of any and all claims of the
Company or any of its creditors.
In the event the Escrow Agent does not
receive minimum deposits totaling $___________ prior to termination of the
Escrow Period, on the Closing Date (as defined in Section 8), the Escrow Agent
shall disburse the Escrow Amount pursuant to the provisions of Section 6, provided, however, in
no event will the Escrow Amount be released to the Company until such amount is
received by the Escrow Agent in collected funds. For purposes of this
Agreement, the term “collected funds” shall mean all funds, including fed funds,
received by the Escrow Agent which have cleared normal banking
channels.
5. Collection
Procedure.
(a) The
Escrow Agent is hereby authorized to deposit each check in the Escrow
Account.
(b) In
the event any check paid by a purchaser and deposited in the Escrow Account
shall be returned, the Escrow Agent shall notify the Underwriter by telephone of
such occurrence and advise it of the name of the purchaser, the amount of the
check returned, and any other pertinent information. The Escrow Agent
shall then transmit the returned check directly to the purchaser and shall
transmit the statement previously delivered by the Underwriter relating to such
purchase to the Underwriter.
(c) If
the Company rejects any purchase of Shares for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check to
the rejected purchaser. If the Underwriter rejects any purchase for
which the Escrow Agent has not yet collected funds but has submitted the
purchaser’s check for collection, the Escrow Agent shall promptly issue a check
in the amount of the purchaser’s check to the rejected purchaser after the
Escrow Agent has cleared such funds. If the Escrow Agent has not yet
submitted a rejected purchaser’s check for collection, the Escrow Agent shall
promptly remit the purchaser’s check directly to the purchaser.
6. Delivery of Escrow
Account.
(a) Prior
to the Closing (as defined in Section 8 of this Agreement), the Underwriter and
the Company shall provide the Escrow Agent with a statement, executed by each
party, containing the following information:
(i) The
total number of Shares sold by the Underwriter directly to purchasers and a list
of each purchaser, and the number of Shares purchased by such purchaser, and
specification of the manner in which the Shares should be issued;
and
(ii) A
calculation by the Underwriter and the Company as to the manner in which the
Escrow Account should be distributed to the Company and the Underwriter and in
the event of oversubscription or rejection of certain purchasers, the aggregate
amount to be returned to individual purchasers and a listing of the exact amount
to be returned to each such purchaser.
The
Escrow Agent shall hold the Escrow Account and distribute it in accordance with
the above-described statement on the date of Closing or such later date that it
receives the above-described statement.
(b) Upon
termination of the Offering by the Company or the Underwriter for any reason,
the Escrow Agent shall return to the purchasers who contributed to the Escrow
Account the exact amount contributed by them.
7. Investment of Escrow
Account. The Escrow Agent shall deposit funds received from
purchasers in the Escrow Account, which shall be a non-interest-bearing bank
account at SunTrust Bank.
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8. Closing
Date. The “Closing” shall be the date of closing of the
Offering, and the “Closing Date” shall be the date on or subsequent to the date
on which the Escrow Agent has received minimum deposits of at least $___________
in collected funds that is designated to the Escrow Agent by the Underwriter and
the Company as the Closing Date.
9. Compensation of Escrow
Agent. The Company shall pay the Escrow Agent a fee for its
services hereunder in an amount equal to One Thousand Five Hundred Dollars
($1,500), which amount shall be paid on the Closing Date. In the
event the Offering is canceled for any reason, the Company shall pay the Escrow
Agent its fee within ten (10) days after the Escrow Amount is refunded to
purchasers. No such fee or any other monies whatsoever shall be paid
out of or chargeable to the funds on deposit in the Escrow Account.
10. Disbursement into
Court. If, at any time, there shall exist any dispute between
the Company, the Underwriter and/or the purchasers with respect to the holding
or disposition of any portion of the Escrow Amount or any other obligations of
the Escrow Agent hereunder, or if at any time the Escrow Agent is unable to
determine, to the Escrow Agent’s sole satisfaction, the proper disposition of
any portion of the Escrow Amount or the Escrow Agent’s proper actions with
respect to its obligations hereunder, or if the Company and the Underwriter have
not within 30 days of the furnishing by the Escrow Agent of a notice of
resignation appointed a successor Escrow Agent to act hereunder, then the Escrow
Agent may, in its sole discretion, take either or both of the following
actions:
(a) suspend
the performance of any of its obligations under this Escrow Agreement until such
dispute or uncertainty shall be resolved to the sole satisfaction of the Escrow
Agent or until a successor Escrow Agent shall have been appointed (as the case
my be); provided
however, that the Escrow Agent shall continue to hold the Escrow Amount
in accordance with Section 7 hereof; and/or
(b) petition
(by means of an interpleader action or any other appropriate method) any court
of competent jurisdiction in Richmond, Virginia, for instructions with respect
to such dispute or uncertainty, and pay into court all funds held by it in the
Escrow Account for holding and disposition in accordance with the instructions
of such court.
The
Escrow Agent shall have no liability to the Company, the Underwriter or any
other person with respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed liability that may
arise, or be alleged to have arisen, out of or as a result of any delay in the
disbursement of funds held in the Escrow Account or any delay in or with respect
to any other action required or requested of the Escrow Agent.
11. Duties and Rights of the
Escrow Agent. The foregoing agreements and obligations of the
Escrow Agent are subject to the following provisions:
(a) The
Escrow Agent’s duties hereunder are limited solely to the safekeeping of the
Escrow Account in accordance with the terms of this Agreement. It is
agreed that the duties of the Escrow Agent are only such as herein specifically
provided, being purely of a ministerial nature, and the Escrow Agent shall incur
no liability whatsoever except for negligence, willful misconduct or bad
faith.
(b) The
Escrow Agent is authorized to rely on any document believed by the Escrow Agent
to be authentic in making any delivery of the Escrow Account or the certificates
representing the Shares. It shall have no responsibility for the
genuineness or the validity of any document or any other item deposited with it
and it shall be fully protected in acting in accordance with this Agreement or
instructions received.
(c) The
Company and the Underwriter hereby waive any suit, claim, demand or cause of
action of any kind which they may have or may assert against the Escrow Agent
arising out of or relating to the execution or performance by the Escrow Agent
of this Agreement, unless such suit, claim, demand or cause of action is based
upon the gross negligence, willful misconduct, or bad faith of the Escrow
Agent.
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12. Notices. It
if further agreed as follows:
(a) All
notices given hereunder will be in writing, served by registered or certified
mail, return receipt requested, postage prepaid, or by hand-delivery, to the
parties at the following addresses:
to the
Company:
269 First
Huashan Road
Jimo
City, Qingdao, Shandong, PRC
Attention: Xxx
Xxxx, Chief Executive Officer
to the
Underwriter:
Xxxxxxxx & Strudwick,
Incorporated
000 Xxxx Xxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: X. XxXxxxxx
Xxxxx, III
Facsimile: (000)
000-0000
with copy
to:
Xxxxxxx & Xxxxxxx,
P.C.
Three
Xxxxx Center
0000 Xxxx Xxxx Xxxxxx
00xx
Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X.
Xxxxxxxx, Esq.
to the Escrow
Agent:
SunTrust Bank
000 Xxxx Xxxx Xxxxxx
0xx
Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx
Xxxx
13. Miscellaneous.
(a) This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
(b) If
any provision of this Agreement shall be held invalid by any court of competent
jurisdiction, such holding shall not invalidate any other provision
hereof.
(c) This
Agreement shall be governed by the applicable laws of the Commonwealth of
Virginia.
(d) This
Agreement may not be modified except in writing signed by the parties
hereto.
(e) All
demands, notices, approvals, consents, requests and other communications
hereunder shall be given in the manner provided in this Agreement.
(f) This
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart, the executed counterparts shall together constitute a
single instrument.
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[Qingdao
Footwear, Inc. - Escrow Agreement Execution Page]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed in their respective names, all as of
the date first above written.
XXXXXXXX & XXXXXXXXX,
INCORPORATED
By: __________________________________
X. XxXxxxxx Downs, III
Managing Director
By: __________________________________
Name: Xxx
Xxxx
Title: Chief
Executive Officer
SUNTRUST BANK
By: __________________________________
Name: Xxxxxxx
Xxxx
Title: Assistant
Vice President
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