Document:

f8k071511ex10ii_kirin.htm

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:

 

 

  

  

  

 

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.

 

  

  

  

 

 

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.

 

  

  

  

 

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.

 

 

  

  

  

 

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

 

 

  

  

  

 

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.

 

  

  

  

 

 

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]

 

 

 

 

  

  

  

 

[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:fs1ex10xv_vendum.htm

Exhibit 10.15

 

Vendum Batteries Inc,

Accounting Worx Suite, 400 Thames Valley Park Drive, Reading RG6 1PT

 

25/06/2010

 

Private & Confidentie.

Professor Prabhakar Bandaru : C/O Department of Mechanical and Aerospace Engineering (MAE) University of California. San Diego, 9500 Gilman Drive, La Jolla. CA 92093-0411

 

Dr. Prabhakar,

 

I am pleased to confirm the terms of your appointment as a non-executive member of the Advisory Board of the Company

 

	1.	This letter records the terms on which you are to serve as a non-executive member of the Advisory Board of the Company from 25/06/2010.
	 	 
	2.	Your appointment on the terms set out in this letter, is for an initial period of 12 months from 25/06/2010, although either party may give the other three months' notice in writing to terminate your appointment at any time.
	 	 
	3.	You will return all property of the Company in your possession on the expiry or termination of this appointment
	 	 
	4.	You will be entitled to payment for your services as a non-executive member of the Advisory Board of a fee to be agreed with the consultancy company providing your services under a separate agreement, such fee to accrue from day to day and to be payable monthly in arrears subject to the deduction of tax and national insurance contributions as appropriate. You accept that such separate agreement and fee shall commence once the Company has been funded from its proposed initial round of fund raising, with the level of fee and commitment to be negotiated in good faith at that time. You will be entitled to participate in any share option arrangements. which the Company puts in place. As initial consideration for your non-executive services hereunder, the Company shall procure that you receive a number of shares (to be confirmed when shares are issued) in the Company (i.e. 0.5% of the current issued share capital).
	 	 
	5.	Remuneration will be paid in the form of a monthly retainer fee (the "Base Salary') which shall be at a rate of one thousand five hundred pounds ($2,250) per month and shall be paid on receipt of an invoice from you in accordance with the Corporation's regular payroll practices in effect from time to time, but not less frequently than in monthly instalments. The 'base salary' will be paid for 10 hours of your time per month. In addition to the 'base salary' you will be paid at a rate of one hundred dollars ($100.00) per hour for any work undertaken for Vendum Batteries Inc.
	 	 
	6.	Roles and responsibilities will include advising the board on technical viability and capabilities of proposed battery design(s), managing the specifications and production of prototypes, providing technical assistance in answering investor conference calls and discussions and establishing objectives for technical milestones, timetables and any relevant R&D considerations for creating commercially viable battery production capabilities.
	 	 
	7.	In the event that you are called on or requested to perform any special duties or responsibilities outside your ordinary duties as member of the Advisory Board, the Board may agree to pay you special remuneration.
	 	 
	8.	In addition, you will be entitled to be repaid all travel, accommodation, and other reasonable expenses (including without limitation mobile telephone expenses) properly incurred in connection with your duties as non-executive member of the Advisory Board.
	 	 
	9.	As a non-executive member of the Advisory Board you will perform the duties normally attendant on that office, including (without limitation) attending Advisory Board meetings, which are normally held quarterly. on such dates as will be notified to you. Non-executive members of the Advisory Board are expected to work with and through the Advisory Board: they are not expected to undertake executive duties or to assume executive responsibilffies,

 

  

  

  

 

 

	10.	During the term of your appointment you may not (except with the prior sanction of a resolution of the Board) be directly or indirectly employed, engaged, concerned or interested in, or hold any office in, any business or undertaking which competes directly in the same country with any of the businesses of the Company (or Group) or is a significant customer or supplier of any such businesses. For the purposes of this letter "Company" or 'Group' shall mean the Company and any subsidiary or subsidiary undertaking (such terms having the respective meanings assigned thereto by sections 736 and 258 of the Companies Act 1985, as amended) of it as exists from time to time. However, this shall not prohibit you from holding (directly or through nominees) investments listed or admitted to trading on the Official List of the United Kingdom Listing Authority ("UKLA") or in the AiM Market of the London Stock Exchange Plc ("AIM") or on any other recognised investment exchange so long as you do not hold more than 5 per cent of the issued shares or other securities of any class of any one company without the prior sanction of a resolution of the Board.
	 	 
	11.	Both during the term of your appointment and after its termination you will observe the obligations of confidentiality, which are attendant on the office of member of the Advisory Board.
	 	 
	12.	Nothing in this letter is deemed to make you an employess of the Company.
	 	 
	13.	This agreement may be executed in two or more counterparts and the counterparts shall together constitute one agreement provided that each party has executed one or more counterparts..

 

Kindly confirm your agreement to the terms set out above by signing the endorsement on the enclosed copy of this letter and returning the copy to me at the above address.

 

	Yours sincerely	 
	 	 
	/s/ Fraser Cottington	 
	Fraser Cottington	 
	CEO	 

 

Dated

 

For and on behalf of Vendum Batteries, Inc.

 

I accept my appointment as a non-executive member of the Advisory Board of the Company on the terms set out above

 

	/s/ Prabhakar Bandaru	 
	Prabhakar Bandaru	 
	 	 

 

Dated  06/24/2010

            (June 24, 2010)

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