Exhibit 10.3
ESCROW AGREEMENT
 
THIS ESCROW AGREEMENT (this “Agreement”) is made as of February 7, 2007, by and
among United National Film Corporation (the “Company”), 1st BridgeHouse
Securities, LLC (“1st BridgeHouse”) and American Stock Transfer and Trust
Company (the “Escrow Agent”).
 
ARTICLE I  
 
ESTABLISHMENT OF THE ESCROW AGENCY AND ESCROW ACCOUNT
 
1.1.  The parties hereby appoint the Escrow Agent, and the Escrow Agent hereby
accepts, the escrow agency established under this Agreement.
 
1.2.  The Escrow Agent hereby establishes a separate account to be maintained
and held in escrow pursuant to and under this Agreement.
 
1.3.  On the date hereof, the Company shall cause $750,000 (including any income
thereon, the “Escrow Funds”) to be transferred to the Escrow Agent.
 
 
ARTICLE II  
 
INVESTMENT OF ESCROW FUNDS
 
The Escrow Agent shall invest the Escrow Funds in an interest bearing bank
account with, or certificate of deposit or time deposits with, maturities of no
more than 30 days issued by, a U.S. commercial bank or such other bank or other
financial institution as it normally holds such funds. All interest earned on
the Escrow Funds shall be added to and held as part of the Escrow Funds.
 
ARTICLE III  
 
DISBURSEMENTS FROM ESCROW FUNDS
 
Upon the receipt by 1st BridgeHouse of a bill or statement for fees or expenses
in connection with investor or public relations or securities law compliance,
including related legal fees and legal fees relating to minor post-closing
corporate matters in the British Virgin Islands, 1st BridgeHouse shall prepare a
release notice in the form attached hereto as Exhibit A (the “Release Notice”)
and deliver such Release Notice to the Escrow Agent. Upon the Escrow Agent’s
receipt of each Release Notice, the Escrow Agent shall disburse the Escrow Funds
in the amount provided in, and in accordance with, such Release Notice.
 

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ARTICLE IV 
 
TERMINATION OF ESCROW AGREEMENT
 
4.1.  This Escrow Agreement shall terminate upon the earlier of:
 
(a) the disbursement of all Escrow Funds in accordance with Article III; or
 
(b) February 7, 2010.
 
4.2.  In the event that this Escrow Agreement is terminated pursuant to Section
4.1(b), the Company may request in writing that the Escrow Agent return any
remaining Escrow Funds directly to the Company; thereupon, the Escrow Agent
shall return such remaining Escrow Funds promptly to the Company.
 
 
ARTICLE V  
 
MISCELLANEOUS
 
5.1.  The Company shall pay the Escrow Agent a one-time fee of $5,000.00 for all
services rendered by the Escrow Agent hereunder.
 
5.2.  For purposes of U.S. federal and other taxes based on income, the Company
shall be treated as the owner of the Escrow Funds and shall report all income,
if any, that is earned on, or derived from, the Escrow Funds as its income, in
the taxable year or years in which such income is properly includible and pay
any taxes attributable thereto. The Escrow Agent shall for each appropriate
year, prepare tax reports on Form 1099 as to the Company’s income and deliver
the same to the Company promptly after the calendar year involved.
 
5.3.  No waiver or any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of the time
for performance of any other obligation or act.
 
5.4.  Any notice, demand, request, waiver or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (i)
upon hand delivery by telex (with correct answer back received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (ii) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
 
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If to the Company:
United National Film Corporation
c/o Wuhan Blower Co., Ltd.
Canglongdao Science Park of Wuhan
East Lake Hi-Tech Development Zone
Wuhan, Hubei 430200
People’s Republic of China
Attention: Xu Jie
Tel. No.: (86) 138 7113 6999
Fax No.: (86) 027 5970 0010
       
with copies to:
Troutman Sanders LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention: Henry I. Rothman, Esq.
Tel. No.: (212) 704-6179
Fax No.: (212) 704-5950
   
If to 1st BridgeHouse:
1st BridgeHouse Securities, LLC
161 Spring House Road
Fairfield, Connecticut 06824
Attention: John H. Starr
Tel. No.: 1 203 209 6351
Fax No.: 1 203 259 4919
   
If to the Escrow Agent:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
Attention: Herbert J. Lemmer
Tel. No.: (718) 921-8209
Fax No.: (718) 331-1852

 
Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.
 
5.5.  This Escrow Agreement shall be binding upon and shall inure to the benefit
of the permitted successors and permitted assigns of the parties hereto.
 
5.6.  This Escrow Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Escrow Agreement
may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.
 
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5.7.  Whenever required by the context of this Escrow Agreement, the singular
shall include the plural and masculine shall include the feminine. This Escrow
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles or Sections are to this Escrow Agreement.
 
5.8.  The parties hereto expressly agree that this Escrow Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of New York, without regard to conflicts of law principles
that would result in the application of the substantive laws of another
jurisdiction. Any action to enforce, arising out of, or relating in any way to,
any provisions of this Escrow Agreement shall only be brought in a state or
Federal court sitting in New York City, Borough of Manhattan.
 
5.9.  The Escrow Agent’s duties hereunder may be altered, amended, modified or
revoked only by a writing signed by each of the parties hereto.
 
5.10.  The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith and in the absence of gross negligence, fraud or willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent’s attorneys-at-law shall be conclusive evidence of
such good faith, in the absence of gross negligence, fraud or willful
misconduct.
 
5.11.  The Escrow Agent is hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
 
5.12.  The Escrow Agent shall not be liable in any respect on account of the
identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver any documents or papers deposited or called for
thereunder in the absence of gross negligence, fraud or willful misconduct.
 
5.13.  The Escrow Agent’s responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by giving written notice to the
Company and 1st BridgeHouse. In the event of any such resignation, 1st
BridgeHouse and the Company shall appoint a successor Escrow Agent and the
Escrow Agent shall deliver to such successor Escrow Agent any Escrow Funds and
other documents held by the Escrow Agent.
 
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5.14.  If the Escrow Agent reasonably requires other or further instruments in
connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
 
5.15.  It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the documents or the
Escrow Funds held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed in the Escrow Agent’s sole discretion (i) to retain in the Escrow
Agent’s possession without liability to anyone all or any part of said documents
or the Escrow Funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (ii) to deliver the
Escrow Funds and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York, Borough of Manhattan, in
accordance with the applicable procedure therefor.
 
5.16.  The Company agrees to indemnify and hold harmless the Escrow Agent and
its partners, employees, agents and representatives from any and all claims,
liabilities, costs or expenses in any way arising from or relating to the duties
or performance of the Escrow Agent hereunder other than any such claim,
liability, cost or expense to the extent the same shall have been determined by
final, unappealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, fraud or willful misconduct of the Escrow
Agent.
 
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
 

 

UNITED NATIONAL FILM CORPORATION       By:    /s/ Xu
Jie                                                                  
Name: Xu Jie
Title: President and Chief Executive Officer
              1ST BRIDGEHOUSE SECURITIES, LLC       By:    /s/ John H.
Starr                                                       Name: John H. Starr
    Title: Executive Vice-President               ESCROW AGENT:         AMERICAN
STOCK TRANSFER AND TRUST COMPANY         By:    /s/ Herbert J.
Lemmer                                            
Name: Herbert J. Lemmer
Title: Vice President
 

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Exhibit A to
Escrow Agreement

RELEASE NOTICE
 
Pursuant to the Escrow Agreement, dated as of February 7, 2007 (the “Escrow
Agreement”), by and among United National Film Corporation, 1st BridgeHouse
Securities, LLC (“1st BridgeHouse”) and American Stock Transfer and Trust
Company (the “Escrow Agent”), 1st BridgeHouse hereby instructs the Escrow Agent
to release Escrow Funds in accordance with the following instructions:
 
Recipient of
Escrow Funds
Amount of Escrow Funds
to be Disbursed
Date of
Disbursement
Transfer
Instructions
       

 
Capitalized terms used herein and not defined shall have the meanings ascribed
to such terms in the Escrow Agreement.
 

 
1ST BRIDGEHOUSE SECURITIES, LLC
              By: __________________________     Name:     Title:  
Date:
__________________________

 
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