September 3, 2008
September
3, 2008
Deer
Consumer Products Inc.
c/o
Xxxxxx Xxxxxx, Counsel to Deer Consumer Products
The
Xxxxxx Law Firm
00
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
This
letter agreement (“Letter Agreement”) is being entered into by and among the
undersigned, individually and on behalf of the entity set forth below which
is
controlled by the undersigned, and Deer Consumer Products, Inc., a Nevada
corporation (the “Company”) with the intent to be legally bound. The undersigned
understands that the Company intends to commence an offering and sale (the
“Offering”) of the Company’s common stock, par value $.001 per share (the
“Common Stock”) and/or securities convertible thereto.
In
recognition of the benefit that the Offering will confer upon the undersigned
as
a stockholder of the Company, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
that, during the Lock-Up Period (as defined below), the undersigned will not,
without the prior written consent of the Company’s Board of Directors, directly
or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company’s Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by
the
undersigned (collectively, the “Lock-Up Securities”) or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Lock-Up
Securities, whether any such swap or transaction is to be settled by delivery
of
Common Stock or other securities, in cash or otherwise. The foregoing sentence
shall not apply to transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift by will or intestacy or to
a
family member or trust for the benefit of a family member; provided,
that in
case of any transfer of distribution pursuant to this sentence (i) each donee
or
distribute shall sign and deliver a lockup up letter substantially in the form
of this letter and (ii) no filing under Section 16(a) of the Securities Exchange
Act of 1934, as amended, reporting a reduction in beneficial ownership of shares
of Common Stock shall be required or shall be voluntarily made during the
Lock-Up Period.
Page
2 of 3
In
furtherance thereof, the Company will (x) place a stop order on all Shares
(as
defined below), (y) notify its transfer agent in writing of the stop order
and
the restrictions on such Shares under
this
Letter Agreement and direct the transfer agent not to process any attempts
by
the undersigned to resell or transfer any Shares in violation of this Agreement.
At the option of the Company, the undersigned shall deliver the share
certificate[s] representing the Shares so they may be held in custody during
the
Lock-Up Period by the Company’s counsel, The Xxxxxx Law Office, or such other
custodian designated by the Company.
No
provision in this letter shall be deemed to restrict or prohibit the exercise
or
exchange by the undersigned of any option or warrant to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into Common
Stock, provided that the undersigned does not transfer the Common Stock acquired
on such exercise or exchange during the Lock-Up Period, unless otherwise
permitted pursuant to the terms of this Letter Agreement.
The
undersigned hereby represents and warrants that he/she/it does not beneficially
own (as determined in accordance with Section 13(d) of the Exchange Act of
1934,
as amended, and the rules and regulations promulgated thereunder) any shares
of
Common Stock, or any economic interest therein or derivative therefrom, other
than those shares of Common Stock specified on its signature page to this
Agreement as of the date of this Agreement (the “Shares”).
The
undersigned hereby represents and warrants that the undersigned has full power
an authority to enter into this Lock-Up Agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of
the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
The
undersigned has consulted an attorney and hereby waives his/her/its right to
all
defenses of inadequate representation of counsel.
The
undersigned and the Company acknowledge and agree that this Letter Agreement
is
entered into for the benefit of and is enforceable by the investors, and their
successors and assigns, in the Offering as third party beneficiaries to this
Letter Agreement.
This
Letter Agreement shall automatically terminate upon the earliest to occur of
(i)
three years following the date the Company’s securities are listed on a
registered national securities exchange such as Nasdaq, (ii) three years and
six
months following the closing of the Offering or, if the closing of an Offering
does not occur within one year from the date hereof, then two years from the
date hereof (the “Lock-Up Period”)
This
Agreement may be executed in facsimile and in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, but all
of
which shall together constitute one and the same agreement.
If
any
provision of this Letter Agreement is held to be invalid or unenforceable for
any reason, such provision will be conformed to prevailing law rather than
voided, if possible, in order to achieve the intent of the parties and, in
any
event, the remaining provisions of this Letter Agreement shall remain in full
force and effect and shall be binding upon the parties hereto.
This
Letter Agreement may not be amended or modified in any manner except by a
written agreement executed by each of the parties hereto and a majority of
the
holders of the securities purchased in the Offering.
Page
3 of 3
The
Company and the third party beneficiaries shall have the right to specifically
enforce all of the obligations of the undersigned under this Letter Agreement
(without posting a bond or other security), in addition to recovering damages
by
reason of any breach of any provision of this Letter Agreement and to exercise
all other rights granted by law. Furthermore, the undersigned recognizes that
if
it fails to perform, observe, or discharge any of its obligations under this
Letter Agreement, any remedy at law may prove to be inadequate relief to the
Company or the third party beneficiaries. Therefore, the undersigned agrees
that
each of the Company and the third party beneficiaries shall be entitled to
seek
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages and without posting a bond or other
security.
The
terms
and provisions of this Agreement shall be construed in accordance with the
laws
of the State of New York, without giving effect to the principles of conflicts
of laws, and the federal laws of the United States of America applicable
therein. The parties agree to the exclusive laying of venue in a State or
Federal court located in New York State.
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Very
truly yours,
SINO
UNITY LIMITED
Holder
of 1,940,375 shares of Common Stock
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| By: | /s/ Yu Xxx Xxxx | |
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Name:
Yu Xxx Xxxx
Title:
President
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/s/Yu
Hai Xxxx
Xx
Xxx Xxxx, Individually
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AGREED
AND ACCEPTED
By:
/s/
Xxxx
Xx
Name:
Xxxx Xx
Title:
Chief Executive Officer & President
