Unassociated Document


     

    SECURITIES ESCROW
AGREEMENT

    


    THIS
SECURITIES ESCROW AGREEMENT (the “Agreement”), dated as
of April 5, 2010, is entered into by and among Sunway Global, Inc., a Nevada
corporation (the “Company”), certain
holders of the Company’s warrants as listed on Schedule A of the
Securities Exchange Agreement (individually, the “Holder” or
collectively the “Holders”), Vision
Opportunity Master Fund, Ltd. a Cayman Islands corporation, as representative of
the Holders (the “Holder
Representative”), each entity listed on Schedule A hereto
(collectively, the “Principal
Shareholders”), and Sichenzia Ross Friedman Ference LLP, with an address
at 61 Broadway New York, New York 10006 (the “Escrow Agent”).
Capitalized terms used but not defined herein shall have the meanings set forth
in the Purchase Agreement (as defined below).

     

    WITNESSETH:

     

    WHEREAS,
the Holders will be exchanging with the Company their Warrants into shares of
Common Stock, par value $0.0000001 per share (the “Common
Stock”);

     

    WHEREAS,
as an inducement to the Holders to enter into the Securities Exchange Agreement,
the Principal Shareholders have agreed to place the Escrow Shares (as
hereinafter defined) into escrow for the benefit of the Holders in the event the
Company fails to achieve the Milestones (as hereinafter defined) by December 31,
2010 (the “Due Date”); and

     

    WHEREAS,
the Company, the Holder Representative and the Holders have requested that the
Escrow Agent hold the Escrow Shares on the terms and conditions set forth in
this Agreement and the Escrow Agent has agreed to act as escrow agent pursuant
to the terms and conditions of this Agreement.

     

    NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:

     

    ARTICLE
I


     

    TERMS OF
THE ESCROW

     

    1.1.           The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this
Agreement.

     

    1.2.           Upon
the execution of this Agreement, the Principal Shareholders shall deliver to the
Escrow Agent stock certificates evidencing an amount of Common Stock equal to
one million (1,000,000) shares as set forth on Schedule A hereto
(the “Escrow
Shares”), along with updated stock powers executed in blank.

     

    1.3.           The
Escrow Shares shall be delivered as set forth below:

     

      (i)           First Milestone. Upon
Company achieving a public listing and trading of its Common Stock on NASDAQ,
AMEX or NYSE (each, a “Qualified Exchange”) by Due Date (“First Milestone”),
five hundred thousand (500,000) Escrow Shares shall be released back to the
Principal Shareholders pro rata.  If the Company does not achieve the
First Milestone by Due Date, five hundred thousand (500,000) Escrow Shares shall
be distributed to the Holders pro rata based on Schedule A of the Securities
Exchange Agreement.

     

      (ii)           Second Milestone. If
the Company’s stock has traded on a Qualified Exchange with a closing price of
$3.75 or more for twenty (20) trading days out of the last thirty (30) trading
days with an average daily trading volume of at least 70,000 shares, measured on
December 31, 2010, (“Second Milestone”) five hundred thousand (500,000) Escrow
Shares shall be released back to the Principal Shareholders pro
rata.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     
(iii)         If the Company does
not achieve the Second Milestone by Due Date, five hundred thousand (500,000)
Escrow Shares shall be distributed to the Holders pro rata based on Schedule A
of the Securities Exchange Agreement.

     

    1.4.           If
the Company does not achieve the First Milestone or the Second Milestone the
Company shall use best efforts, in each case, to promptly cause the Escrow
Shares to be delivered to the Holders, including causing its transfer agent
promptly to issue the certificates in the names of the Holders and causing its
securities counsel to provide any written instruction required by the Escrow
Agent in a timely manner so that the issuances and delivery contemplated above
can be achieved within five business days following the Due Date to the
Holder.

     

    1.5.           Upon
the written request of the Company and Holder Representative, the Escrow Agent
shall deliver the Escrow Shares, to each Holder and/or each Principal
Shareholder pursuant to the written instructions of the Company and Holder
Representative.

     

    ARTICLE
II

    REPRESENTATIONS
OF THE PRINCIPAL SHAREHOLDERS

     

    2.1.           Each
Principal Shareholder hereby represents and warrants to the Holders and the
Holder Representative as follows:

     

     
(i)           The
Escrow Shares placed into escrow hereunder by the Principal Shareholder are
validly issued, fully paid and nonassessable shares of the Company. The
Principal Shareholder is the record and beneficial owner of the Escrow Shares
placed into escrow pursuant to this Agreement by the Principal Shareholder and
has good title to such Escrow Shares, free and clear of all pledges, liens,
claims and encumbrances, except encumbrances created by this Agreement. There
are no restrictions on the ability of the Principal Shareholder to transfer the
Escrow Shares placed into escrow pursuant to this Agreement by the Principal
Shareholder or to enter into this Agreement other than transfer restrictions
under applicable federal and state securities laws. Upon any delivery of Escrow
Shares placed into escrow pursuant to this Agreement by the Principal
Shareholder to the Holders hereunder, the Holders will acquire good and valid
title to such Escrow Shares, free and clear of any pledges, liens, claims and
encumbrances.

     

     
(ii)           The
performance of this Agreement and compliance with the provisions hereof will not
violate any provision of any law applicable to the Principal Shareholder and
will not conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon, any of the properties or
assets of the Principal Shareholder pursuant to the terms of the certificate of
incorporation or by-laws of the Company or any indenture, mortgage, deed of
trust or other agreement or instrument binding upon the Principal Shareholder or
affecting the Escrow Shares. No notice to, filing with, or authorization,
registration, consent or approval of any governmental authority or other person
is necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by the Principal
Shareholder.

     

    ARTICLE
III

    MISCELLANEOUS

     

    3.1.           The
Company will pay Escrow Agent a total of $1,000 for all services rendered by
Escrow Agent hereunder.

     

    3.2.           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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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 4), 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 the following addresses or facsimile numbers as applicable.

     

    If to
Escrow Agent: Sichenzia Ross Friedman Ference LLP,

    


    Sichenzia
Ross Friedman Ference LLP

    61
Broadway, 32nd Floor

    New York,
NY 10006

    Attention:  Marc
J. Ross, Esq.

    Tel.
No.:  (212) 930-9700

    Fax
No.:  (212) 930-9725

     

    If to the
Company or the Principal Shareholders:

    


    Tel.
No.:

    Fax
No.:

     

    With a
copy to:

     

    If to the
Holder Representative:

    Vision
Opportunity Master Fund, Ltd.

    20 W.
55th Street, 5th Floor

    New York,
New York 10019

    Attention:
Carl Kleidman

    Tel. No.:
(212) 849-8246

    Fax No.:
(212) 867-1416

     

    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.

     

    3.3.           This
Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and permitted assigns of the parties hereto.

     

    3.4.           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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.5.           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 are to this Escrow Agreement.

     

    3.6.           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.

     

    3.7.           The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, the Principal Shareholders, the Holder
Representative and the Escrow Agent.

     

    3.8.           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 and 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 and willful misconduct.

     

    3.9.           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.

     

    3.10.           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 and willful misconduct.

     

    3.11.           The
Escrow Agent shall be entitled to employ such legal counsel and other experts as
the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation therefor which
shall be paid by the Escrow Agent. The Escrow Agent has acted as legal
counsel for the Company and may continue to act as legal counsel for the Company
from time to time, notwithstanding its duties as the Escrow Agent hereunder. The
Company and the Holders consent to the Escrow Agent in such capacity as legal
counsel for the Company and waive any claim that such representation represents
a conflict of interest on the part of the Escrow Agent. The Company and the
Holders understand that the Escrow Agent is relying explicitly on the foregoing
provision in entering into this Escrow Agreement.

     

    3.12.           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 the
Holders. In the event of any such resignation, the Holders 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.

     

    3.13.           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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.14.           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
Shares held by the Escrow Agent hereunder, the Escrow Agent is authorized and
directed in the Escrow Agent’s sole discretion (1) to retain in the Escrow
Agent’s possession without liability to anyone all or any part of said documents
or the Escrow Shares 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 (2) to deliver
the Escrow Shares 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.

     

    3.15.           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 or the transactions contemplated
hereby or by the Purchase Agreement 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]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
PAGE TO SECURITIES ESCROW AGREEMENT]

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
5th
day of April, 2010.

    
      


      
        
          	
                  SUNWAY
      GLOBAL INC.

                
	 
      	 
      
	
                  By:

                	
                  /s/ Bo Liu

                
	 
      	
                   
      Name:

                
	 
      	
                   
      Title:

                


        

      

      


      
        
          
            	
                    HOLDER
      REPRESENTATIVE:

                  
	 
      
	
                    VISION
      OPPORTUNITY MASTER FUND, LTD.

                  
	 
	
                    By:

                  	
                    /s/ Adam Benowitz

                  
	 
      	
                     
      Name: Adam Benowitz

                  
	 
      	
                     
      Title: Director

                  


          

        

      

      


      
        
          	
                  ESCROW
      AGENT:

                
	 
      
	
                  SICHENZIA
      ROSS FRIEDMAN FERENCE LLP

                
	 
      	 
      
	
                  By:

                	
                  /s/ Marc Ross

                
	 
      	
                   
      Name: Marc Ross

                
	 
      	
                   
      Title: Partner

                


        

      

      


      
        
          	
                  PRINCIPAL
      SHAREHOLDER:

                
	 
      
	
                  RISE
      ELITE INTERNATIONAL LIMITED

                
	 
      	 
      
	
                  By:

                	
                  /s/ Bo Liu

                
	 
      	
                   
      Name:

                
	 
      	
                    
      Title:

                


        

      

       

      
        
          
          

        

        
          6