INVESTOR AND PUBLIC RELATIONS ESCROW AGREEMENT
INVESTOR
AND PUBLIC RELATIONS
ESCROW AGREEMENT
This
Agreement, dated as of March 28, 2008 (this “Agreement”),
is
entered into by and among FORME Capital, Inc., a Delaware corporation (the
“Company”),
Loeb
& Loeb LLP (the “Escrow
Agent”),
Vision Opportunity China Limited Partnership, a closed-ended investment company
incorporated in Guernsey (“Vision”),
and
each of the investors as set forth on Exhibit
A
attached
hereto (together with Vision, each, a “Subscriber”,
and
collectively, the “Subscribers”)
(the
Company and the Subscribers are collectively referred to as “Escrowing
Parties”).
The
principal address of each party hereto is set forth on Exhibit
A.
WITNESSETH:
WHEREAS,
the Company proposes to make a private offering to accredited institutional
investors (the “Offering”)
of
Units, each composed of one share of the Company’s Series A Convertible
Preferred Stock and two warrants to purchase the Company’s Common Stock (the
“Offering
Securities”)
in
reliance upon available exemptions from the registration requirements of the
U.S. Securities Act of 1933, as amended and pursuant to a Securities Purchase
Agreement (the “Securities
Purchase Agreement”),
in an
aggregate amount of up to Fifteen Million Five Hundred Thousand Dollars
($15,500,000) (the “Maximum
Offering Amount”);
and
WHEREAS,
the Company has agreed to deposit at the closing (the “Closing”) of the Offering
an aggregate of Three Hundred Thousand Dollars ($300,000) from the Maximum
Offering Amount (the “Public
Relations Held-Back Escrowed Portion”)
with
the Escrow Agent, to be held and disbursed by the Escrow Agent pursuant to
this
Agreement; and
WHEREAS,
Escrow Agent is willing to hold the Public Relations Held-Back Escrowed Portion
in escrow subject to the terms and conditions of this 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.
The
Company and each Subscriber 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.
2. Delivery
of the Escrowed Funds.
a.
The
Company hereby directs that the Escrow Agent allocate the Public Relations
Held-Back Escrowed Portion separately from the Maximum Offering Amount at
the
Closing and hold the Public Relations Held-Back Escrowed Portion in the escrow
account as follows (the “Escrow Account”):
Bank:
Citigroup Private Bank
Address:
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
ABA
No.:
000000000
SWIFT:
CITI US 33
Account:
Loeb & Loeb LLP Attorney Escrow Account for Forme Capital, Inc.
Account
No.: 00000000
Reference:
Forme Capital, Inc. (210920-10001)
3. Escrow
Agent to Hold and Disburse the Public Relations Held-Back Escrowed
Portion.
The
Escrow Agent will hold and disburse the Public Relations Held-Back Escrowed
Portion received by it pursuant to the terms of this Agreement, as
follows:
a. The
Public Relations Held-Back Escrowed Portion shall remain in the Escrow Account
and shall only be released by the Escrow Agent to the Company upon the Escrow
Agent’s receipt of written notice in the form of Exhibit B hereto from the
Company that the Company has hired an investor relations firm with invoices
evidencing the investor relations related expenses for payment.
b. In
the
event this Agreement, the Escrowed Funds, or the Escrow Agent becomes the
subject of litigation, or if the Escrow Agent shall desire to do so for any
other reason, each of the Company and the Subscribers authorizes the Escrow
Agent, at its option, to deposit the Public Relations Held-Back Escrowed Portion
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. Each of the Company, and the Subscribers further authorizes
the
Escrow Agent, if it receives conflicting claims to any of the Escrowed 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 Public Relations Held-Back Escrowed Portion
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.
4. Exculpation
and Indemnification of Escrow Agent.
a. 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 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 the Escrowing Parties relating to
the
Escrowed Funds, the Escrow Agent shall not be obligated to recognize any
agreement between or among any of the Escrowing Parties, notwithstanding that
references hereto may be made herein and whether or not it has knowledge
thereof.
b. The
Escrow Agent shall not be liable to the Company, any Subscriber 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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c. 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, any Subscriber 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.
d. 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, any
Subscriber 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.
e. 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
Public Relations Held-Back Escrowed Portion, or any payment made hereunder,
the
Escrow Agent may pay such taxes; and the Escrow Agent may withhold from any
payment of the Public Relations Held-Back Escrowed Portion 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 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(f).
f. 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 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. 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.
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g. 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
a. This
Agreement shall terminate upon disbursement of all of the Public Relations
Held-Back Escrowed Portion provided that the rights of the Escrow Agent and
the
obligations of the Company and the Subscribers under Section 4 shall survive
the
termination hereof.
b. The
Escrow Agent may resign at any time and be discharged from its duties as Escrow
Agent hereunder by giving the Company and Vision 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 the Company and Vision within the Notice Period, turn
over
to a successor escrow agent appointed by the Company and Vision all Public
Relations Held-Back Escrowed Portion (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
a. Any
payments of the Public Relations Held-Back Escrowed Portion 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.
b. 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 the
Company:
a. Fees:
The
Company shall pay an annual processing fee of $500 to the Escrow Agent for
the
Public Relations Held-Back Escrowed Portion.
b. Interest:
The
Public Relations Held-Back Escrowed Portion 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.
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8. Notices.
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii)
if
mailed certified or registered mail return receipt requested, two (2) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or
(iv)
if delivered by facsimile transmission, on the business day of such delivery
if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
time,
on the next succeeding business day (as evidenced by the printed confirmation
of
delivery generated by the sending party’s telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 8), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of
the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to addresses or facsimile numbers as applicable
set
forth on Exhibit
A
hereto.
9. Further
Assurances.
From
time
to time on and after the date hereof, the Company, Vision and each of the other
Subscribers, if applicable, 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.
The
Company, the Escrow Agent and each Subscriber hereby irrevocably consent to
the
jurisdiction of the courts of the State of New York 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
a. 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 Escrow 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.
5
b. This
Agreement and the rights and obligations hereunder of the Company and each
Subscriber 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 the Company. 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,
the Company and Vision. 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.
c. 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.
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.
[THE
REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK.]
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IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement on
the
day and year first above written.
| LOEB & LOEB LLP | ||||
| By: | ||||
|
Name:
Title:
|
||||
|
FORME
CAPITAL, INC.
|
||||
| By: | ||||
|
Name:
Title:
|
||||
|
VISION
OPPORTUNITY CHINA LIMITED PARTNERSHIP
|
||||
| By: | ||||
|
Name:
Title:
|
||||
|
[Name
of Subscriber]
|
||||
| By: | ||||
|
Name:
Title:
|
||||
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EXHIBIT
A
PARTIES
TO AGREEMENT
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxxx X. Xxxxxxxx, Esq.
Tel
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
FORME
Capital, Inc.
Jing
7th
Street
Dongfeng
Xincun
Daqing
City, PRC 16300031
Attention:
Xxxx Xxxx
Tel:33.
No.: 00-000-000000000
Fax:35
No.: 00-000-000000000
Vision
Opportunity China, L.P.
c/o
Vision Capital Advisors, LLC
00
Xxxx
00xx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000-0000
Attention:
Xxxxxx Xxx
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
Other
Subscribers
Name
of Subscriber: _______________
Address:
________________________
Attention:
_______________________
Tel:
Fax:
| By: | ||||
|
Name:
Title:
|
8
EXHIBIT
B
DISBURSEMENT
REQUEST
Pursuant
Investor and Public Relations Escrow Agreement dated effective as of March
28,
2008, among FORME Capital, Inc., Vision Opportunity China Limited Partnership
and Loeb & Loeb LLP, as Escrow Agent, the Company hereby request
disbursement of funds in the amount and manner described below from account
number _____________, styled ____________________________ Escrow
Account.
|
Please
disburse to:
|
________________________________ | |||
| Amount to disburse: | ________________________________ | |||
| Form of distribution: | ________________________________ | |||
| Payee: | ||||
|
Name
|
: | ________________________________ | |||
|
Address
|
: | ________________________________ | |||
|
City/State
|
: | ________________________________ | |||
|
Zip
|
: | ________________________________ |
Statement
of event or condition which calls for this request for
disbursement:
_______________________________________________________________
_______________________________________________________________
|
FORME
CAPITAL, INC.
|
||
| |
|
|
| Date: _________________________ | By: | |
|
Name: |
||
| Title | ||
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