Dragon Acquisition Corporation - Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3 

HOLDBACK ESCROW AGREEMENT

          This
ESCROW AGREEMENT (the “Agreement”) is made as of April 14, 2010 by and among
Dragon Acquisition Corporation, a Cayman Islands company (the “Company”), with
its address at Shandong Motorway Building, 29 Miaoling Road, Qingdao 266000,
People’s Republic of China, Collateral Agents, LLC, a New York limited liability
company, with its address at 111 West 57th Street, Suite 1416, New
York, New York 10019 (the “Escrow Agent”), Brean Murray, Carret & Co., LLC
(the “Placement Agent”) and Access America Investments, LLC (the
“Investor Representative”). All capitalized terms used in this Agreement and not
otherwise defined herein shall have the respective meanings assigned them in the
Subscription Agreement, between the Company and each investor signatory thereto
(collectively, the “Investors”), dated April 14, 2010 (the “Subscription
Agreement”). 

W I T N E S S E T H: 

          WHEREAS,
the Company is selling investment units (“Units”), each Unit consisting of (i)
one (1) share of the Company’s 6% Convertible Preference Shares, par value
$0.002112 per share, convertible into one (1) share of the Company’s ordinary
shares, par value $0.002112 per share (the “Ordinary Shares”), and (ii) one (1)
warrant to purchase one-half of one of the Ordinary Shares, at a per share
exercise price of $6.00 (or two half-shares for $3.00 each), for aggregate gross
proceeds of a minimum of $15,000,000 (or a lower amount at the discretion of the
Company and the Placement Agent) and up to a maximum of $20,000,000 (the
“Offering”), in reliance upon an exemption from securities registration afforded
by Regulation D and/or Regulation S as promulgated under the Securities Act of
1933, as amended (the “Securities Act”) and Section 4(2) of the Securities
Act;

          WHEREAS,
such Offering is in connection with the combination (the “Combination”) of the
Company and Leewell Investment Group Limited, a Hong Kong company (“Leewell”).
The closing of the Combination is conditioned upon all of the conditions of the
Offering being met, and the Offering is conditioned upon the closing of the
Combination (the “Closing”). Leewell owns 100% of the issued and outstanding
capital stock of Qingdao Oumei Real Estate Development Co., Ltd. (“Qingdao
Oumei”), a company incorporated under the laws of the People’s Republic of China
(“China” or the “PRC”). Pursuant to the Combination, Leewell and Qingdao Oumei
will become wholly-owned subsidiaries of the Company; 

          WHEREAS,
the Company proposes to establish an escrow account (the “Escrow Account”),
which shall include (1) twenty percent (20%) of the Offering proceeds (the “20%
Holdback”), with one half of the 20% Holdback as the New Board (as defined
below) holdback described in Section 4.1 hereof (the “New Board Holdback”), and
the other half of the 20% Holdback as the Chief Financial Officer holdback
described in Section 4.2 hereof (the “CFO Holdback”), and (2) $1,000,000 of the
Offering proceeds (the “Public Company Holdback,” and together with the 20%
Holdback, the “Escrow Amount”) as the Public Company holdback described in
Section 4.3 hereof, to be held in escrow, and administered and distributed in
accordance with Section 4 of this Agreement; and the Escrow Agent is willing to
establish the Escrow Account on the terms and subject to the conditions
hereinafter set forth; and 

          WHEREAS,
the Investors have appointed the Investor Representative as such Investors’
representative to act on their collective behalf with respect to this Agreement
and all amendments thereto.

          NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows: 

          1.      
 Appointment of Escrow Agent. The Company, Placement Agent and
Investor Representative hereby appoint the Escrow Agent as escrow agent to act
in accordance with the terms and conditions set forth in this Agreement, and the
Escrow Agent hereby accepts such appointment and agrees to establish the Bank Account (as defined below) on the terms
and subject to the conditions hereinafter set forth. 




          2.    
   Establishment of the Bank Account. The Escrow Agent shall
establish an interest-bearing bank account at the branch of the bank selected by
the Escrow Agent (the “Bank Account”). The purpose of the Bank Account is for
(a) the deposit of the Escrow Amount by the Company, and (b) the disbursement of
collected funds, all as described herein. 

          3.       
Delivery of the Escrow Amount. The Company hereby directs the Escrow
Agent to receive the Escrow Amount to be transferred to it at the Closing and
hold and disburse it as provided in this Agreement. The Escrow Amount shall be
held by the Escrow Agent in the Bank Account as follows: 

Account Name: Dragon Acquisition
Corporation 
Account Number: 664685234 
Bank Name: HSBC BANK USA, N.A.

Bank Address: 9201 3rd Ave, Brooklyn, NY 11209 
ABA Number: 021001088


  Swift Number: MRMDUS 33 

          4.       
Disbursements from the Bank Account.

                
     4.1      
 Pursuant to Section 5.3 of the Subscription Agreement, no later than three
(3) months after the Closing of the Offering (the “Nomination Period”), the
Company shall nominate and effectuate the nomination of a five (5) member Board
of Directors, of which a majority shall be independent (as the term is defined
for Securities and Exchange Commission purposes and NASDAQ rules and
regulations) (the “New Board”). As soon as the Company nominates and effectuates
the nomination of the New Board, the Investor Representative and Placement Agent
shall execute and deliver to the Escrow Agent written instructions to release
the New Board Holdback to the Company (“Instructions to Release New Board
Holdback”). Within one (1) business day following its receipt of Instructions to
Release New Board Holdback (with wire instructions attached), the Escrow Agent
shall distribute the New Board Holdback in accordance with such written
instructions. 

                
     4.2    
   Pursuant to Section 5.4 of the Subscription Agreement, during
the Nomination Period, the Company shall employ an English-speaking Chief
Financial Officer who shall have experience with financial reporting companies
under the Sarbanes-Oxley Act of 2002 and other federal or state securities laws
and shall also meet the approval, which shall not be unreasonably withheld, and
requirements of the Placement Agent and the Investor Representative (a
“Qualified CFO”). To secure the hiring of a Qualified CFO, the Company has
agreed that the Escrow Amount be held in the Escrow Account until a Qualified
CFO has been appointed. Upon the Company’s appointment of a Qualified CFO, the
Investor Representative and Placement Agent shall execute and deliver to the
Escrow Agent written instructions to release the CFO Holdback to the Company
(“Instructions to Release CFO Holdback”). Within one (1) Business Day following
its receipt of Instructions to Release CFO Holdback (with wire instructions
attached), the Escrow Agent shall distribute the CFO Holdback in accordance with
such written instructions. 

                  
   4.3        Pursuant to
Section 5.12 of the Subscription Agreement, the Public Company Holdback shall be
used in payment of fees and expenses related to becoming a public company. The
Escrow Agent shall release the Public Company Holdback in incremental amounts
pursuant to written instructions provided to it by the Company. The Escrow Agent
shall provide notice to the Placement Agent of all disbursements made pursuant
to this section every month after the date of this Agreement within five (5) business days after the end of each such monthly reporting
period. The maximum disbursement per month shall be $100,000, and the minimum
disbursement per disbursement request shall be the greater of $50,000 or the
funds remaining in the Bank Account at the time of the disbursement request,
except that the Escrow Agent shall fulfill any disbursement request made
pursuant to joint written instructions from the Company and the Placement Agent
to the extent that a sufficient amount of the Public Company Holdback that is
not otherwise subject to another disbursement request made pursuant to this
section remains in the Bank Account. 

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If the entire Escrow Amount is not disbursed within two (2)
years from the date hereof, the balance of the Escrow Amount shall be returned
to the Company. Under no circumstances shall the Escrow Amount be disbursed to
anyone other than the Company unless the Company provides written instructions
to such effect. 

          5.      
 Interpleader. Should any controversy arise among the parties hereto
with respect to this Agreement or with respect to the right to receive the
Escrow Amount, 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
the parties so directing 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 5 shall be filed in any court of
competent jurisdiction in New York, New York, and the Escrow Amount in dispute
shall be deposited with the court and in such event Escrow Agent shall be
relieved of and discharged from any and all obligations and liabilities under
and pursuant to this Agreement with respect to the Escrow Amount.

          6.       
Exculpation and Indemnification of Escrow Agent.

                
     6.1        The
Escrow Agent is not a party to, and is not bound by or charged with notice of
any agreement out of which this escrow may arise. The Escrow Agent acts under
this Agreement as a depositary only and is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity of
the subject matter of the escrow, or any part thereof, or for the form or
execution of any notice given by any other party hereunder, or for the identity
or authority of any person executing any such notice. The Escrow Agent will have
no duties or responsibilities other than those expressly set forth in this
Agreement. The Escrow Agent will be under no liability to anyone by reason of
any failure on the part of any party hereto (other than the Escrow Agent) or any
maker, endorser or other signatory of any document to perform such person’s or
entity’s obligations hereunder or under any such document. Except for this
Agreement and instructions to the Escrow Agent pursuant to the terms of this
Agreement, the Escrow Agent will not be obligated to recognize any agreement
between or among any or all of the persons or entities referred to herein,
notwithstanding its knowledge thereof. The Escrow Agent shall not be required to
expend or risk any of its own funds or otherwise incur any liability, financial
or otherwise, in the performance of any of its duties hereunder. 

                
     6.2        The
Escrow Agent will not be liable for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, and may rely conclusively on, and will be protected in
acting upon, any order, notice, demand, certificate, or 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 reasonably believed
by Escrow Agent to be genuine and to be signed or presented by the proper person
or persons. The duties and responsibilities of the Escrow Agent hereunder shall
be determined solely by the express provisions of this Agreement and no other or further
duties or responsibilities shall be implied, including, but not limited to, any
obligation under or imposed by any laws of the State of New York upon
fiduciaries.

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    6.3        The Escrow
Agent will be indemnified and held harmless by the Company from and against any
expenses, including reasonable attorneys’ fees and disbursements, damages or
losses suffered by the Escrow Agent in connection with any claim or demand,
which, in any way, directly or indirectly, arises out of or relates to this
Agreement or the services of Escrow Agent hereunder; except, that if the Escrow
Agent is guilty of willful misconduct, fraud or gross negligence under this
Agreement, then the Escrow Agent will bear all losses, damages and expenses
arising as a result of such willful misconduct, fraud or gross negligence.
Promptly after the receipt by the Escrow Agent of notice of any such demand or
claim or the commencement of any action, suit or proceeding relating to such
demand or claim, the Escrow Agent will notify the other parties hereto in
writing. For the purposes hereof, the terms “expense” and “loss” will include
all amounts paid or payable to satisfy any such claim or demand, or in
settlement of any such claim, demand, action, suit or proceeding settled with
the express written consent of the parties hereto, and all costs and expenses,
including, but not limited to, reasonable attorneys’ fees and disbursements,
paid or incurred in investigating or defending against any such claim, demand,
action, suit or proceeding. The provisions of this Section 6.3 shall
survive the termination of this Agreement.

                  
   6.4        If at any time
the Escrow Agent is served with any judicial or administrative order, judgment,
decree, writ or other form of judicial or administrative process which in any
way affects the Escrow Amount (including but not limited to orders of attachment
or garnishment or other forms of levies or injunctions or stays relating to the
transfer of the Escrow Amount) (an “Order”), the Escrow Agent is authorized to
comply therewith in any manner it or legal counsel of its own choosing deems
appropriate, provided, that the Escrow Agent shall immediately provide
notice to the Company, the Placement Agent, and the Investor Representative of
such Order, and, to the extent permitted under the Order, shall defer compliance
with the Order until the Company, the Placement Agent, and the Investor
Representative have had an opportunity to dispute, appeal, or otherwise
challenge such Order. If the Escrow Agent complies with any such Order after
complying with all other requirements under this Section 6.4, Escrow Agent shall
not be liable to any of the parties hereto or to any other person or entity even
though such Order may be subsequently modified or vacated or otherwise
determined to have been without legal force or effect. 

                
     6.5        The
Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Escrow Agent (including but not limited to
any act or provision of any present or future law or regulation or governmental
authority, any act of God or war, civil unrest, local or national disturbance or
disaster, any act of terrorism, or the unavailability of the Federal Reserve
Bank wire or facsimile or other wire or communication facility), except to the
extent that it failed to act reasonably to avoid or restrict the effect of any
such occurrence on its duties, obligations, and responsibilities hereunder. 

                 
    6.6        The Escrow
Agent shall not be called upon to advise any party as to the wisdom in selling
or retaining or taking or refraining from any action with respect to any
securities or other property deposited hereunder. 

                
     6.7        The
Escrow Agent shall not be under any duty to give the Escrow Account held by it
hereunder any greater degree of care than it gives its own similar property.


                
     6.8        When the
Escrow Agent acts on any information, instructions, communications, (including,
but not limited to, communications with respect to the delivery of securities or
the wire transfer of funds) sent by telex, facsimile, email or other form of
electronic or data transmission, the Escrow Agent, absent gross negligence,
shall not be responsible or liable in the event such communication is not an authorized or authentic communication (whether due to fraud,
distortion or otherwise). In the event of any ambiguity or uncertainty hereunder
or in any notice, instruction or other communication received by the Escrow
Agent hereunder, the Escrow Agent may, in its sole discretion, refrain from
taking any action other than to retain possession of the Escrow Amount, unless
the Escrow Agent receives written instructions, signed by the Investor
Representative and Placement Agent which eliminates such ambiguity or
uncertainty.


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    6.9        The Escrow
Agent does not have any interest in the Escrow Amount deposited hereunder but is
serving as escrow holder only and having only possession thereof. The Company
shall pay or reimburse the Escrow Agent upon request for any transfer taxes or
other taxes relating to the Escrow Amount incurred in connection herewith and
shall indemnify and hold harmless the Escrow Agent from any amounts that it is
obligated to pay in the way of such taxes. Any payments of income from this
Escrow Account shall be subject to withholding regulations then in force with
respect to United States taxes. The Company will provide the Escrow Agent with
appropriate W-9 forms for tax identification number certifications, or W-8 forms
for non-resident alien certifications. It is understood that the Escrow Agent
shall only be responsible for income reporting with respect to income earned on
the Escrow Amount and will not be responsible for any other reporting. This
paragraph shall survive notwithstanding any termination of this Agreement or the
resignation or removal of the Escrow Agent. 

                
     6.10      The Escrow
Agent may generally engage in any kind of business with the Company, the
Investor Representative, the Placement Agent or any participant in the Offering
or any subsidiary or affiliate thereof as if it had not entered into this
Agreement or any other agreement with them. Escrow Agent and its affiliates and
their officers, directors, employees, and agents (including legal counsel) may
now or hereafter be engaged in one or more transactions with the Company, the
Investor Representative, the Placement Agent or any participant in the Offering
or any subsidiary or affiliate thereof or may act as trustee, agent or
representative of either the foregoing parties or otherwise be engaged in other
transactions with such parties (collectively, the “Other Activities”). Without
limiting the forgoing, Escrow Agent and its affiliates and their officers,
directors, employees, and agents (including legal counsel) shall not be
responsible to account to the Company, the Investor Representative, the
Placement Agent or any participant in the Offering or any subsidiary or
affiliate thereof for such Other Activities. 

          7.      Fees
and Expenses. The Escrow Agent shall be entitled to payment in the amount of
$1,500 per year for the services rendered hereunder. In addition, the Company
agrees to pay the Escrow Agent’s costs and expenses including reasonable
attorney’s fees in the event of any dispute or litigation threatened or
commenced which requires the Escrow Agent in its opinion to refer such matter to
its attorneys and all wire fees, packaging and postal fees and expenses
(including FedEx). Escrow Agent will incur no liability for any delay reasonably
required to obtain such advice of counsel.

          8.      Resignation
of Escrow Agent. At any time, upon five (5) days’ written notice to the
Company, the Escrow Agent may resign and be discharged from its duties as escrow
agent hereunder. As soon as practicable after its resignation, the Escrow Agent
will promptly turn over to a successor escrow agent appointed by the Company the
Escrow Amount held hereunder upon presentation of a document appointing the new
escrow agent and evidencing its acceptance thereof. If, by the end of the 5-day
period following the giving of notice of resignation by the Escrow Agent, the
Company shall have failed to appoint a successor escrow agent, the Escrow Agent
may interplead the Escrow Amount into the registry of any court having
jurisdiction.

          9.     
Records. The Escrow Agent shall maintain accurate records of all
transactions hereunder. Promptly after the termination of this Agreement or as
may reasonably be requested by the parties hereto from time to time before such
termination, the Escrow Agent shall provide the parties hereto, as the case may be, with a complete copy of such records, certified by the
Escrow Agent to be a complete and accurate account of all such transactions. The
authorized representatives of each of the parties hereto shall have access to
such books and records at all reasonable times during normal business hours upon
reasonable notice to the Escrow Agent.

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          10.      Notice.
All notices, communications and instructions required or desired to be given
under this Agreement must be in writing and shall be deemed to be duly given if
sent by registered or certified mail, return receipt requested, or overnight
courier to the following addresses:

                    
If to Escrow Agent: 

Collateral Agents, LLC 
111 West
57th Street, Suite 1416 
New York, NY 10019 
Attn: General Counsel


  Fax: (212) 245-9101

                    
If to the Company: 

Dragon Acquisition Corporation

Shandong Motorway Building 
29 Miaoling Road
Qingdao 266000


  People’s Republic of China

                    
With copies (which shall not constitute notice) to: 

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street NW
Washington, D.C. 20037
Facsimile:
202.663.8007

  Attn.: Louis A. Bevilacqua, Esq.

                    
If to the Investor Representative: 

Access America Investments, LLC

11200 Westheimer Rd., Suite 508 
Houston, Texas 77042 

  Attention: Christopher Efird, President 

               
If to the Placement Agent: 

Brean Murray, Carret & Co., LLC

570 Lexington Avenue
New York, New York 10022 

  Attention: Richard L. Serrano

or to such other address and to the attention of such other
person as any of the above may have furnished to the other parties in writing
and delivered in accordance with the provisions set forth above.

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          11.      Execution
in Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile execution and delivery of this Agreement
is legal, valid and binding for all purposes.

          12.      Assignment
and Modification. This Agreement and the rights and obligations hereunder of
any of the parties hereto may not be assigned without the prior written consent
of the other parties hereto. Subject to the foregoing, this Agreement will be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors and permitted assigns. No other person will acquire or
have any rights under, or by virtue of, this Agreement. No portion of the Escrow
Amount shall be subject to interference or control by any creditor of any party
hereto, or be subject to being taken or reached by any legal or equitable
process in satisfaction of any debt or other liability of any such party hereto
prior to the disbursement thereof to such party hereto in accordance with the
provisions of this Agreement. This Agreement may be changed or modified only in
writing signed by all of the parties hereto. No waiver of any right or remedy
hereunder shall be valid unless the same shall be in writing and signed by the
party giving such waiver. No waiver by any party with respect to any condition,
default or breach of covenant hereunder shall be deemed to extend to any prior
or subsequent condition, default or breach of covenant hereunder or affect in
any way any rights arising by virtue of any prior or subsequent such occurrence.


          13.      Applicable
Law. This Agreement shall be governed by and construed with the laws of the
State of New York applicable to contracts made and to be performed therein. Any
litigation concerning the subject matter of this Agreement shall be exclusively
prosecuted in the state or federal courts located in New York, New York, and all
parties consent to the exclusive jurisdiction and venue of those courts.

          14.     
Headings. The headings contained in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.

          15.      Attorneys’
Fees. If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys’ fees from
the other party (unless such other party is the Escrow Agent), which fees may be
set by the court in the trial of such action or may be enforced in a separate
action brought for that purpose, and which fees shall be in addition to any
other relief that may be awarded.

[Signature Page Follows] 

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

	 	ESCROW AGENT: 
	 	 	 
	 	COLLATERAL AGENTS, LLC 
	 	 	 
	 	 	 
	 	By:	/s/ Seth Fishman 
	 	 	Name: Seth Fishman 
	 	 	Title: President 
	 	 	  
	 	 	 
	 	COMPANY: 
	 	 	 
	 	DRAGON ACQUISITION CORPORATION 
	 	 	 
	 	 	  
	 	By:	/s/ Yang Chen 
	 	 	Name: Yang Chen 
	 	 	Title: Chief Financial Officer 
	 	 	  
	 	 	 
	 	INVESTOR REPRESENTATIVE: 
	 	 	 
	 	ACCESS AMERICA INVESTMENTS, LLC 
	 	 	 
	 	 	  
	 	By:	/s/ Christopher Efird 
	 	 	Name: Christopher Efird 
	 	 	Title: President 
	 	 	  
	 	PLACEMENT AGENT: 
	 	 	 
	 	BREAN MURRAY, CARRET & CO., LLC 
	 	 	 
	 	 	  
	 	By:	/s/ Richard L. Serrano 
	 	 	Name: Richard L. Serrano 
	 	 	Title: Managing Director 


[Signature Page to Holdback Escrow Agreement]