Exhibit 10.2
 
INVESTOR RELATIONS HOLDBACK ESCROW AGREEMENT
 
This INVESTOR RELATIONS HOLDBACK ESCROW AGREEMENT (this “Agreement”) dated as of
July 15, 2011 is entered into by and among Kirin International Holding, Inc.
(the “Company”), Hunter Wise Securities, LLC (the “Placement Agent”), Ground
Floor Capital Management Ltd. (the “Investor Representative”) and Anslow &
Jaclin, LLP (the “Escrow Agent”).
 
WITNESSETH:
 
WHEREAS, the Company is offering to certain investors investment units, each
composed of (i) four (4) shares of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), (ii) one (1) three-year series A warrant
exercisable for shares of the Company’s Common Stock at a price of $6.25 per
share and (iii) one (1) three-year series B warrant exercisable for shares of
the Company’s Common Stock at a price of $7.50 per share, in an aggregate amount
of up to a minimum of One Million Dollars ($1,000,000) and a maximum of Ten
Million Dollars ($10,000,000) (the “Offering”);
 
WHEREAS, the Company completed an initial closing under the Offering with total
gross proceeds to the Company of $1,380,000 (the “First Closing”);
 
WHEREAS, the Company, Placement Agent and the Investor Representative expects
that one or more additional closings under the Offering (each, an “Additional
Closing” and collectively, the “Additional Closings”) will occur on or before
September 30, 2011 (the “Expiration Date”);
 
WHEREAS, the Company has agreed to deposit, upon each Additional Closing,
fourteen percent (14%) of the gross proceeds of each Additional Closing, not to
exceed the aggregate amount of Five Hundred Thousand Dollars ($500,000) (the
“Escrowed Funds”) with the Escrow Agent, to be held and disbursed by the Escrow
Agent pursuant to the terms and conditions of this Agreement;
 
WHEREAS, the Escrow Agent is willing to hold the Escrowed Funds in escrow
pursuant to and subject to the terms and conditions of this Agreement; and
 
WHEREAS, the investors of the Offering have appointed the Investor
Representative to act on their collective behalf with respect to this Agreement
and all amendments thereto.
 
NOW, THEREFORE, in consideration of the mutual promises herein contained and
intending to be legally bound, the parties hereto hereby agree as follows:
 
1.    Appointment of Escrow Agent. The Company, Placement Agent and the Investor
Representative hereby appoint Anslow & Jaclin, LLP as escrow agent in accordance
with the terms and subject to the conditions set forth herein and Anslow &
Jaclin, LLP hereby accepts such appointment.
 
2.    Delivery of the Escrowed Funds.  Upon each Additional Closing of the
Offering, the Escrowed Funds shall be delivered into an escrow account
maintained by the Escrow Agent (the “Escrow Account”) by wire transfer in
accordance with the wire transfer instructions set forth on Schedule A
hereto.  In no event shall the aggregate amount of Escrowed Funds delivered to
the Escrow Account exceed Five Hundred Thousand Dollars ($500,000).
 
3.    Escrow Agent to Hold and Disburse the Escrowed Funds. The Escrow Agent
will deposit the Escrowed Funds into a non-interest bearing escrow account and
disburse the Escrowed Funds pursuant to the terms of this Agreement, as follows:
 
 
 
 

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a. The Company shall engage an investor relations firm which shall meet the
approval and requirements of the Investor Representative (an “Approved IR
Firm”).  Such approval shall not be unreasonably withheld. Following the
engagement of an Approved IR Firm, the Escrow Agent shall disburse the Escrowed
Funds in incremental amounts to such investor relations firm pursuant to joint
written instructions executed by the Company, the Placement Agent and the
Investor Representative.  If the Escrowed Funds are not disbursed within one (1)
year from the Expiration Date, the balance of the Escrowed Funds will be
returned to the Company.
 
b. In the event this Agreement, the Escrowed Funds, or the Escrow Agent, in its
capacity as escrow agent under this Agreement, becomes the subject of
litigation, or if the Escrow Agent determines it is necessary do so for any
other reason relating to litigation arising out of this Agreement or the
Offering, each of the Company, the Placement Agent and the Investor
Representative authorizes the Escrow Agent, at its option if not otherwise so
required, to deposit the Escrowed Funds with the clerk of the court in which the
litigation is pending, and thereupon the Escrow Agent shall be relieved and
discharged of any further responsibility with regard thereto to the extent
determined by any such court. Each of the Company, the Placement Agent and the
Investor Representative further authorizes the Escrow Agent, if it receives
conflicting claims to any of the Escrowed Funds, is threatened with litigation,
in its capacity as escrow agent under this Agreement, or if the Escrow Agent
determines it is necessary  to do so for any other reason relating to this
Agreement, 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 relieved and discharged of any further
responsibility hereunder to the parties from which they were received to the
extent determined by such court.
 
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 thereto may be made herein and the Escrow Agent
has knowledge thereof.
 
b. The Escrow Agent shall not be liable to the Company, the Placement Agent, the
Investor Representative 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, the Placement Agent, the Investor Representative 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,
the Placement Agent, the Investor Representative 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 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
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 proceeding
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 reckless misconduct by the Escrow Agent or breach of this
Agreement by the Escrow Agent, or the monies or other property held by it
hereunder. Promptly, but no later than three (3) business days, after the
receipt by 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 by the Escrow Agent against the Company, notify the
Company in writing, but the failure by the Escrow Agent to give such notice
shall not relieve the Company from any liability which the Company may have to
the Escrow Agent hereunder, unless the failure of the Escrow Agent to give such
notice prejudices or otherwise impairs the Company’s ability to defend any
demand, claim, action suit or proceeding. 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, reasonably deem sufficient to indemnify itself for any such loss
or expense.
 
 
 

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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 Escrowed Funds
provided that the rights of the Escrow Agent and the obligations of the Company,
the Placement Agent and the Investor Representative 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, the Placement Agent and the
Investor Representative 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, the Placement Agent and the
Investor Representative within the Notice Period, turn over to a successor
escrow agent appointed by the Company, the Placement Agent and the Investor
Representative all Escrowed Funds (less such amount as the Escrow Agent is
entitled to continue to retain and hold in escrow pursuant to Section 4(f) and
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 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.
 
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 $2,500 as compensation
for its services rendered under this Agreement, which amount shall be delivered
to an account designated by the Escrow Agent on the same date when the Escrowed
Fund is delivered into the Escrow Account.
 
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 hereunder.
 
 
 
 

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If to the Company, to:

Kirin International Holding, Inc.
Attn: Longlin Hu
Room 1506
South Building of China Overseas Plaza
No. 8 Guanghua Dongli Road
Chaoyang District, Beijing, 100020
People’s Republic of China
Phone: +86 (10) 6577-2050
Facsimile: +86 (10) 6577-2050

If to the Placement Agent, to:

Hunter Wise Securities, LLC
Attn: Dan McClory
2361 Campus Drive, Suite 100
Irvine, CA 92612
Phone: (949) 732-4102
Facsimile: (949) 266-5789

If to the Investor Representative, to:

Ground Floor Capital Management Ltd.
Attn: Dave Steele
3111 Del Rio Drive
North Vancouver, BC
Canada V7N 4C3
Phone: (604) 980-8407
Facsimile: (604) 980-8463

If to the Escrow Agent, to:

Anslow & Jaclin LLP
Attn: Gregg E. Jaclin, Esq.
195 Route 9 South, 2nd Floor
Manalapan, NJ 07726
Phone: (732) 409-1212
Facsimile: (732) 577-1188
 
 
 
 

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9.        Further Assurances. From time to time on and after the date hereof,
the Company, the Placement Agent and the Investor Representative 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 Placement Agent, the
Investor Representative and the Escrow Agent 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 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.
 
b. This Agreement and the rights and obligations hereunder of the Company, the
Placement Agent and the Investor Representative may not be assigned without the
consent of the Escrow Agent, other than by laws of descent or operation of law.
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, the
Placement Agent and the Investor Representative, which consent shall not be
unreasonably withheld. 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.
 
 
 

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12.      Execution of Counterparts. This Agreement may be executed in any number
of counterparts, by facsimile or other form of electronic transmission, 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 parties hereto.
 
[THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK]

 
 
 
 
 
 

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[SIGNATURE PAGE TO IR HOLDBACK ESCROW AGREEMENT]
 

 
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on
the day and year first above written.

ESCROW AGENT:

ANSLOW & JACLIN, LLP
 
By:  /s/ Gregg E. Jaclin                                         
Name: Gregg E. Jaclin, Esq.
Title: Partner

COMPANY:

KIRIN INTERNATIONAL HOLDING, INC.

By: /s/ Longlin Hu_                                                      
Name: Longlin Hu
Title:  Chief Executive Officer

PLACEMENT AGENT:

HUNTER WISE SECURITIES, LLC
 
By: /s/ Fred Jager                                                      
Name: Fred Jager
Title: President

 
INVESTOR REPRESENTATIVE:
 
GROUND FLOOR CAPITAL MANAGEMENT LTD.

By: /s/ Dave Steele                                                      
Name: Dave Steele
Title:
 

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