CLOSING ESCROW AGREEMENT
This
Escrow Agreement, dated as of December 24, 2007 (this “Agreement”),
is
entered into by and among Green Agriculture Holding Corporation, a New Jersey
corporation, (“Green”), the
investors set forth on Exhibit
A
and
signatory hereto (collectively, the “Investors”)
and
Tri-State Title & Escrow, LLC (the “Escrow
Agent”).
The
principal address of each party hereto is set forth on Exhibit
X.
Xxxxx
may be sometimes referred to herein as the Escrowing Party.
WITNESSETH:
WHEREAS,
Discovery
Technologies, Inc, a Nevada corporation (the “Company”),
through, Xxxxxx Freihofner Capital,
a
division of Xxxxx Securities, Inc, Member NASD/MSRB/SIPC
(the
“Placement
Agent”),
proposes to make a private offering to accredited institutional investors
(the “Offering”)
of the
Company’s common stock, par value $0.001 per share in
reliance upon available exemptions from the registration requirements
of the U.S. Securities Act of 1933, as amended and pursuant to the
Securities Purchase Agreement, dated as of the date hereof, by and among the
Company, the Investors and certain other parties signatory thereto (the
“Securities
Purchase Agreement”),
in a
minimum amount of twenty million dollars ($20,000,000) and a maximum amount
of
twenty six million dollars ($26,000,000) (the “Subscription
Amount”);
WHEREAS,
Green desires to deposit the Subscription Amount (the “Escrowed
Funds”)
with
the Escrow Agent, to be held in escrow until written instructions are received
by the Escrow Agent from Green and the Investors holding a majority of the
Shares to be issued at Closing pursuant to the Securities Purchase Agreement
(the “Required
Investors”),
at
which time the Escrow Agent will disburse the Escrowed Funds in accordance
with
Exhibit
C;
WHEREAS,
Escrow Agent is willing to hold the Escrowed Funds in escrow subject to the
terms and conditions of this Agreement; and
WHEREAS,
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
NOW,
THEREFORE, in consideration of the mutual promises herein contained and
intending to be legally bound, the parties hereby agree as follows:
1.
Appointment
of Escrow Agent.
Green
hereby appoints Escrow Agent as escrow agent in accordance with the terms and
conditions set forth herein and the Escrow Agent hereby accepts such
appointment.
2.
Delivery
of the Escrowed Funds.
2.1
Each Investor
hereby agrees to deliver its applicable portion of the Escrowed
Funds (which shall equal such Investor's Investment Amount) to the Escrow
Agent’s account as set forth below within one Business Day of the date of the
Securities Purchase Agreement (the “Escrow
Account”):
Account
Name: Tri-State Title & Escrow, LLC
Bank:
Access National Bank, Xxxxxx, XX 00000
Account
No.: 0000000
ABA
No:
000000000
2.2 The
Escrowed Funds shall be forwarded to the Escrow Agent by wire transfer to the
Escrow Account, together, via facsimile or e-mail, with the written account
of
subscription in the form attached hereto as Exhibit
B
(the
“Subscription
Information”).
Upon
receipt of any portion of the Escrowed Funds, the Escrow Agent shall immediately
deposit such Escrowed Funds in the Escrow Account.
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 The
Escrow Agent shall continue to hold the Escrowed Funds delivered for deposit
hereunder by or on behalf of the Investors until the earlier of: (1) receipt
of
a written notice from Green and the Required Investors, evidencing termination
under Section 6.5(a) of the Securities Purchase Agreement, (2) receipt of a
written notice from an Investor evidencing termination under Section 6.5(b)
of
the Securities Purchase Agreement (each of (1) and (2), a “Termination
Election”)
or (3)
receipt of a joint written notice from Green, the Placement Agent and the
Required Investors in the form of Exhibit
C
hereto
that the conditions to Closing under the Securities Purchase Agreement have
been
satisfied and to disburse the Escrowed Funds in accordance with Exhibit
C.
3.2 If
the
Escrow Agent receives a Termination Election prior to its receipt of the notice
contemplated under Section 3.1(3), then the Escrow Agent shall within one
business day of its receipt of such Termination Election return the Escrowed
Funds (or portion thereof) delivered by the Investor(s) as directed by the
Investor(s) without regard and irrespective of any other notices or
instructions. If the Escrow Agent receives the notice contemplated under Section
3.1(3) prior to a Termination Election (the “Disbursement
Notice”),
then
the Escrow Agent shall disburse the Escrowed Funds in accordance with the funds
flow memorandum attached hereto as Exhibit
C.
3.3 In
accordance with Exhibit
C,
upon
receipt of a Disbursement Notice, $4,250,000 of the Escrowed Funds are to be
immediately transferred to the escrow account set forth in that certain Holdback
Escrow Agreement, dated as of the date hereof, by and among the Company, the
Escrow Agent and the Investors, in the form attached hereto as Exhibit
D,
to be
held in escrow pursuant to the terms thereof.
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3.4 Should
any controversy arise among the parties hereto with respect to this Agreement
or
with respect to the right to receive the Escrowed 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 Green and the Required
Investors so directing the 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 3.4 shall be filed in any court of competent
jurisdiction in Virginia, and the portion of the Escrowed Funds in dispute
shall
be deposited with the court and in such event the Escrow Agent shall be relieved
of and discharged from any and all obligations and liabilities under and
pursuant to this Agreement with respect to that portion of the Escrowed
Funds.
4.
Exculpation
and Indemnification of Escrow Agent
4.1
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 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 by Green and the Required Investors
(and
if relevant the Placement Agent) relating to the Escrowed Funds, the Escrow
Agent shall not be obligated to recognize any other agreement between or among
the parties hereto relating to the subject matter hereof, notwithstanding that
references hereto may be made herein and whether or not it has knowledge
thereof.
4.2 Subject
to its obligations upon receipt of a Termination Election, the Escrow Agent
shall not be liable to Green, the Company 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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4.3 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
Green 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.
4.4 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 Green 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.
4.5 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 (but not any payments to the Investors or pursuant to Section
3.3) 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 Green
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.
4.6 The
Escrow Agent will be indemnified and held harmless by the Company from and
against all expenses, including all 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 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 Green, notify it thereof in writing, but the
failure by the Escrow Agent to give such notice shall not relieve any such
party
from any liability which Green may have to the Escrow Agent hereunder.
Notwithstanding any obligation to make payments and deliveries hereunder, the
Escrow Agent may retain and hold for such time as it deems necessary such amount
of monies or property as it shall, from time to time, in its sole discretion,
seem sufficient to indemnify itself for any such loss or expense and for any
amounts due it under Section 7.
4
4.7 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, counsel fees and disbursements, paid or incurred in investigating
or
defending against any such claim, demand, action, suit or proceeding.
5.
Termination
of Agreement and Resignation of Escrow Agent
5.1 This
Agreement shall terminate and be of no further force or effect on the earlier
of
(i) disbursement of all Escrowed Funds and (ii) the one year anniversary of
the
Closing Date; provided that the rights of the Escrow Agent and the Investors
and
the obligations of Green under Section 4 shall survive the termination
hereof.
5.2 The
Escrow Agent may resign at any time and be discharged from its duties as Escrow
Agent hereunder by giving Green at least five (5) business days written notice
thereof (the “Notice Period”). As soon as practicable after its resignation, the
Escrow Agent shall, if it receives notice from Green within the Notice Period,
turn over to a successor escrow agent appointed by Green 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.
6.
Form
of Payments by Escrow Agent.
All
amounts referred to herein are expressed in United States Dollars and all
payments by the Escrow Agent shall be made in such dollars.
7. Compensation.
Escrow
Agent shall be entitled to the following compensation from Green:
7.1 Documentation
Fee:
Green
shall pay a documentation fee to the Escrow Agent of $4,000.00 receipt of which
is hereby acknowledged by Escrow Agent.
7.2 Closing
Fee:
Green
shall pay a fee of $500.00 to the Escrow Agent upon its receipt of a
Disbursement Notice.
7.3 Interest :
The
Escrowed Funds shall accrue interest (the “Accrued
Interest”)
at the
available rate obtained by the Escrow Agent with respect to the period during
which such funds are held in the Escrow Account. Each
time
Escrowed Funds are disbursed to the Company in accordance with this Agreement,
Green shall be paid Accrued Interest of 2.0% per annum on the aggregate amount
of Escrowed Funds disbursed to the Company at such time and the balance of
Accrued Interest, if any, shall be retained by the Escrow Agent.
5
8. 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.
9. Further
Assurances. From
time
to time on and after the date hereof, Green 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.
10. Consent
to Service of Process .
Green
hereby irrevocably consents to the jurisdiction of the courts of the State
of
Virginia and of any Federal court located in such state 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.
11. Miscellaneous
11.1 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.
11.2 This
Agreement and the rights and obligations hereunder of Green may not be assigned.
This Agreement and the rights and obligations hereunder of the Escrow Agent
may
be assigned by the Escrow Agent, with the prior consent of Green and the
Required Investors. 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,
Green and the Investors. 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, other than
the Placement Agent.
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11.3 This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Virginia. 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.
12.
Execution
of Counterparts This
Agreement may be executed in a number of counterparts, by facsimile, 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.
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IN
WITNESS WHEREOF, the parties have executed and delivered this Closing Escrow
Agreement on the day and year first above written.
ESCROW
AGENT:
TRI-STATE
TITLE & ESCROW, LLC
By:
/s/
Xxx
X. Xxxxxx
Name:
Xxx
X. Xxxxxx
Title:
President
GREEN
AGRICULURE HOLDING CORPORATION
By:
/s/ Yinshing Xxxxx To
Name:
Yinshing
Xxxxx To
Title:
Director
NAME
OF
INVESTOR:
By:
Name:
Title:
8
EXHIBIT
A
PARTIES
TO AGREEMENT
Tri-State
Title & Escrow, LLC
000
Xxxx
Xxxxxx
X.X.
Xxx
000
Xxxxxxxxxx,
XX 00000
(000)
000-0000
Attention:
Xxxxxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Fax: (000)
000-0000
Email
xxxxxx@xxxxxxxxxxxxx.xxx
Green
Agriculture Holding Corporation
00
Xxx
Xxxxxxxxx Xxxxx, Xxxx 0,
Xxxx
Xxxxxxx, XX 00000
Attn:
Mr.
Yinshing Xxxxx To
[Insert
Investor Information]
9
EXHIBIT
B
SUBCRIPTION
INFORMATION
| Name of Subscriber | ||
| Address of Subscriber | ||
| Amount of Securities | ||
| Subscribed (US$) | ||
| Subscription Amount | ||
| Submitted Herewith | ||
| Taxpayer ID Number/ | ||
| Social Security Number |
10
EXHIBIT
C
DISBURSEMENT
REQUEST
Pursuant
to that certain Closing Escrow Agreement dated effective as of December __,
2007, among Green Agriculture Holding Corporation and Tri-State Title &
Escrow, LLC, the Escrowing Party hereby requests disbursement of funds in the
amount and manner described below from account number 5060024931, styled
Tri-State Title & Escrow, LLC Escrow Account.
| Please disburse to: | |||
| Amount to disburse: | |||
| Form of distribution: | |||
| Payee: | |||
|
Name:
|
|||
| Address: | |||
| City/State: | |||
| Zip: | |||
| Please disburse to: | |||
| Amount to disburse: | |||
| Form of distribution: | |||
| Payee: | |||
| Name: | |||
| Address: | |||
| City/State: | |||
| Zip: |
Subscriptions
Accepted From
| Subscriber | Amount | ||
|
Total:
|
|||
|
Statement
of event or condition which calls for this request for
disbursement:
|
|||
11
|
Discovery
Technologies, Inc.
|
||
| |
|
|
|
Date:
_________________________
|
By: |
Name:
Title:
|
|
Tri-State
Title & Escrow, LLC
|
||
| |
|
|
|
Date:
_________________________
|
By: |
Name:
Title:
|
|
Investors:
|
||
|
___________________________
|
||
| |
|
|
|
Date:
_________________________
|
By: |
Name:
Title:
|
12
EXHIBIT
D
HOLDBACK
ESCROW AGREEMENT
13
