Exhibit
      10.5

     

    INVESTOR
      AND PUBLIC RELATIONS ESCROW AGREEMENT

     

    This
      Agreement, dated as of October 31, 2008 (this “Agreement”),
      is
      entered into by and among Lihua International, Inc., a Delaware corporation
      (the
“Company”),
      Loeb
& Loeb, LLP (the “Escrow
      Agent”)
      and
      Vision Opportunity China LP, a closed-ended investment company incorporated
      in
      Guernsey (“Vision”),
      as
      the representative of each of the investors set forth on Exhibit
      A
      attached
      hereto (together with Vision, each, a “Purchaser”,
      and
      collectively, the “Purchasers”).
      The
      principal address of each party hereto is set forth on Exhibit
      A.

     

    WITNESSETH:

     

    WHEREAS,
      the Company made a private offering to the Purchasers (the “Offering”)
      for
      the sale of units (the “Offering
      Securities”),
      each
      composed of one share of the Company’s newly-designated Series A Convertible
      Preferred Stock and a warrant to purchase .22 shares of the Company’s common
      stock, par value $0.0001 per share (the “Common
      Stock”),
      in
      reliance upon available exemptions from the registration requirements of the
      U.S. Securities Act of 1933, as amended, in an aggregate amount of Fifteen
      Million Dollars ($15,000,000) (the “Offering
      Amount”);
      and

     

    WHEREAS,
      in connection with the Offering, the Company entered into a Securities Purchase
      Agreement dated as of the date hereof (the “Securities
      Purchase Agreement”),
      by
      and among the Company and the Purchasers; and

     

    WHEREAS,
      the Company has agreed to deposit on the Closing Date (as defined in the
      Securities Purchase Agreement) an aggregate amount of Seven Hundred Fifty
      Thousand Dollars ($750,000) from the Offering Amount (the “Public
      Relations Escrowed Funds”
      or
“Escrowed
      Funds”)
      with
      the Escrow Agent, to be held and disbursed by the Escrow Agent pursuant to
      the
      terms, and subject to the conditions of, this Agreement; and

     

    WHEREAS,
      the Escrow Agent is willing to hold the Public Relations Escrowed Funds in
      escrow pursuant to and 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 Vision hereby appoint Loeb & Loeb LLP as escrow agent in
      accordance with the terms and subject to the 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 provide instructions to Anslow
      & Jaclin, LLP, as escrow agent for the General Escrow Agreement, dated as of
      even date herewith, for the transfer and deposit on the Closing Date of the
      Public Relations Escrowed Funds into the escrow account as follows (the “Escrow
      Account”) maintained by the Escrow Agent by wire transfer in accordance with the
      wire transfer instructions set forth below:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Bank:
      Citi Private Bank

    Address:
      666 Fifth Avenue

    New
      York,
      NY 10103

    ABA
      No.:
      021000089

    SWIFT:
      CITI US 33

    Account
      No.: 24576266

    Reference:
      213426-10001

    Attn:
      Mitchell Nussbaum, Esq.

     

    3. Escrow
      Agent to Hold and Disburse the Public Relations Escrowed Funds.
      The
      Escrow Agent will deposit the Public Relations Escrowed Funds into a
      non-interest bearing escrow account and disburse the Public Relations Escrowed
      Funds pursuant to the terms of this Agreement, as follows:

     

    a. One
      Hundred Twenty Five Thousand Dollars ($125,000) from the Public Relations
      Escrowed Funds shall be released to the Company once the Company appoints a
      Vice
      President of Investor Relations pursuant to Section 3.28 of the Securities
      Purchase Agreement, and upon the Escrow Agent’s receipt of joint written notice
      from the Company and Vision in the form of Exhibit
      B
      hereto.
      An additional Two Hundred Fifty Thousand Dollars ($250,000) from the Public
      Relations Escrowed Funds shall be released to the Company once the Company
      has
      complied with all Nasdaq Corporate Governance standards, including, but not
      limited to, appointment of three (3) independent directors who are acceptable
      to
      the Company, Vision and CMHJ Technology Fund II, L.P., the establishment of
      an
      audit committee of at least three (3) members that has adopted a formal written
      charter of the Audit Committee pursuant to Section 3.29 of the Securities
      Purchase Agreement and upon the Escrow Agent’s receipt of joint written notice
      from the Company and Vision in the form of Exhibit
      C
      hereto.
      The remaining Three Hundred Seventy Five Thousand Dollars ($375,000) from the
      Public Relations Escrowed Funds shall be released to the Company as invoices
      become due for the purpose of any investor and public relations activities
      pursuant to Section 3.27 of the Securities Purchase Agreement and upon the
      Escrow Agent’s receipt of joint written notice from the Company and Vision in
      the form of Exhibit
      D
      hereto.

     

    b. If
      the
      Company fails to timely comply with its obligations set forth in any of Sections
      3.27, 3.28, 3.29, 3.31 or 3.32 of the Securities Purchase Agreement, then upon
      written request from Vision, the amount of the liquidated damages payable under
      any such section, as applicable, shall be distributed from the Public Relations
      Escrowed Funds to the Purchasers in the manner set forth in the Securities
      Purchase Agreement. Within fifteen (15) business days after the release of
      the
      liquidated damages amount to the Purchasers from the Escrow Account, the Company
      shall replenish the Escrow Account and deposit an amount equal to the amount
      of
      liquidated damages paid, back into the Escrow Account.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    c. 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, the Offering or the Securities
      Purchase Agreement, each of the Company and the Purchasers authorizes the Escrow
      Agent, at its option if not otherwise so required, to deposit the Public
      Relations 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, and the Purchasers 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 Public Relations 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, any Purchaser 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.

     

    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 Purchaser 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.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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
      Purchaser 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 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
      Public Relations 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.

     

    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.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    5. Termination
      of Agreement and Resignation of Escrow Agent.

     

    a. This
      Agreement shall terminate upon disbursement of all of the Public Relations
      Escrowed Funds provided that the rights of the Escrow Agent and the obligations
      of the Company and the Purchasers 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 ten (10) 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 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 Public Relations 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 not be entitled to any compensation for its services
      rendered under this Agreement.

     

    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.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    9. Further
      Assurances.
      From
      time to time on and after the date hereof, the Company, Vision and each of
      the
      other Purchasers, 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 Purchaser 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.

     

    b. This
      Agreement and the rights and obligations hereunder of the Company and each
      Purchaser 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 and Vision, 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.


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    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.]


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

    


    
      	
              Loeb
                & Loeb, LLP

            
	 	 
	
              By:

            	
              /s/
                Mitchell
                Nussbaum

            
	 	
              Name:
                Mitchell Nussbaum, Esq.

            
	 	
              Title:
                Partner

            
	 	 
	
              LIHUA
                INTERNATIONAL, INC.

            
	 	 
	
              By:
                

            	
              /s/
                Zhu Jianhua

            
	
              Name:
                Zhu Jianhua

            
	
              Title:
                Chief Executive Officer and President 

            
	 	 
	
              [PURCHASER]

            
	 	 
	
              By:

            	       

	
              Name:

            	 
	
              Title:

            	 
	 	 
	
              [PURCHASER]

            
	 	 
	
              By:

            	      

	
              Name:

            	 
	
              Title:

            	 


    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A TO THE

    SECURITIES
      PURCHASE AGREEMENT

     

    
      
        

      

       

    

    LIST
      OF PURCHASERS


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

     

    DISBURSEMENT
      REQUEST

     

    Pursuant
      to that Investor and Public Relations Escrow Agreement dated as of October
      31,
      2008, among Lihua International, Inc. (the “Company”),
      Vision Opportunity China LP and Loeb & Loeb, LLP, as Escrow Agent, the
      Company hereby certifies that the Company has appointed a Vice President of
      Investor Relations, and hereby requests disbursement of funds in the amount
      of
      one hundred twenty-five thousand dollars ($125,000) from the escrow funds
      maintained by Loeb & Loeb LLP in the following manner.

    


    
      	 	 
	
              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:

            
	 
	 


    

    


    
      	 	
              LIHUA
                INTERNATIONAL, INC.

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            
	 	
              [PURCHASER]

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            


    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    DISBURSEMENT
      REQUEST

     

    Pursuant
      to that Investor and Public Relations Escrow Agreement dated as of October
      31,
      2008, among Lihua International, Inc. (the “Company”),
      Vision Opportunity China LP and Loeb & Loeb, LLP, as Escrow Agent, the
      Company hereby certifies that the Company has complied with the Nasdaq Corporate
      Governance standards, and hereby requests disbursement of funds in the amount
      of
      two hundred fifty thousand dollars ($250,000) from the escrow funds maintained
      by Loeb & Loeb LLP in the following manner.

    


    
      	 	 
	
              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:

            
	 
	 


    

    


    
      	 	
              LIHUA
                INTERNATIONAL, INC.

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            
	 	
              [PURCHASER]

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            


    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    DISBURSEMENT
      REQUEST

     

    Pursuant
      to that Investor and Public Relations Escrow Agreement dated as of October
      31,
      2008, among Lihua International, Inc. (the “Company”),
      Vision Opportunity China LP and Loeb & Loeb, LLP, as Escrow Agent, the
      Company hereby certifies that the Company has hired _________________________
      as
      its investor relations firm, and hereby requests disbursement of funds in the
      amount and manner described below.

    


    
      	 	 
	
              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:

            
	 
	 


    

    


    
      	 	
              LIHUA
                INTERNATIONAL, INC.

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            
	 	
               

              [PURCHASER]

            
	 	 
	
              Date:
                _________________________

            	
              By:

            	 	 
	 	
              Name:

            
	 	
              Title:

            


    


    
      
        
        

      

      
        12