Document:

Unassociated Document

     

    Exhibit
      10.3

     

    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”),
      Anslow & Jaclin, LLP (the “Escrow
      Agent”),
      Vision Opportunity China LP, a closed-ended investment company incorporated
      in
      Guernsey (“Vision”),
      and
      each of the purchasers as set forth on Exhibit
      A attached
      hereto (together with Vision, each, a “Purchaser”
and
      collectively, the “Purchasers”).
      The
      principal address of each party is set forth on Exhibit
      A.

     

    WITNESSETH:

     

    WHEREAS,
      Magnify Wealth Enterprise Limited, a British Virgin Island company
      (“Magnify”),
      entered into a share exchange agreement with the Company pursuant to which
      Magnify transferred all of its ownership interest in Ally Profit Investments
      Limited, a limited liability company organized under the laws of the British
      Virgin Islands (“Ally
      Profit”),
      in
      exchange for the issuance of shares of common stock, par value $0.0001 per
      share
      (the “Common
      Stock”)
      of the
      Company (the “Share
      Exchange Transaction”),
      and
      as a result of the Share Exchange Transaction, Ally Profit became a wholly-owned
      subsidiary of the Company; and

     

    WHEREAS,
      immediately following the consummation of the Share Exchange Transaction, the
      Company made a private offering to the Purchasers (the “Offering”)
      for
      the sale of units, 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 (the “Offering
      Securities”)
      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 certain other agreements,
      documents, instruments and certificates necessary to carry out the purposes
      thereof (collectively, the “Transaction
      Documents”).

     

    WHEREAS,
      the Company and the Purchasers desire to deposit all proceeds received by the
      Company from the Purchasers for the Offering Securities (the “Escrowed
      Funds”)
      with
      the Escrow Agent, to be held and disbursed by the Escrow Agent pursuant to
      this
      Agreement; and

     

    WHEREAS,
      the Escrow Agent is willing to hold the Escrowed Funds in escrow in accordance
      with, 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 each Purchaser hereby appoint Anslow & Jaclin 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 will direct each Purchaser to deliver their respective share of the
      Escrowed Funds to the Escrow Agent as follows:

    

    
      	
              Bank
                Address:

            	
              Wachovia
                Bank NA

            
	 	
              800
                West Main Street

            
	 	
              Freehold,
                New Jersey 07726

            

    

    

    ABA
      No.:
      031201467

    SWIFT:

    Account:
      Anslow & Jaclin LLP Escrow Account

    Account
      No.: 2000013292968

    Attn:
      Joseph M Lucosky, Esq.

    Reference:
      Vision-Lihua Financing

     

    (b) The
      Escrowed Funds shall be forwarded to the Escrow Agent by wire transfer, together
      with the executed Transaction Documents. The Escrowed Funds to be wired shall
      be
      wired to the account set forth in Section 2(a) above and the executed
      Transaction Documents shall be faxed or emailed to the Escrow Agent in
      accordance with the information provided on Exhibit
      A
      with
      respect to the Escrow Agent.

     

    (c) Simultaneously
      with the deposit of each Purchaser’s share of the Escrowed Funds, each Purchaser
      shall provide the Escrow Agent with the Transaction Documents, accompanied
      by a
      cover sheet setting forth the name, address and taxpayer identification number
      of such Purchaser, wire transfer instructions and the aggregate principal amount
      of Offering Securities purchased by such Purchaser.

     

    (d) In
      the
      event a wire transfer is received by the Escrow Agent and the Escrow Agent
      has
      not received the executed Transaction Documents, the Escrow Agent shall notify
      such Purchaser. If the Escrow Agent does not receive the Transaction Documents
      from such Purchaser prior to the close of business on the day which is the
      fifth
      (5th)
      business day (a day other than a Saturday or Sunday or other day on which the
      Escrow Agent is not open for business in the State of New York) after the day
      on
      which the Escrow Agent notified the Purchaser that it has not received such
      Purchaser’s executed Transaction Documents, the Escrow Agent shall return,
      within five (5) business days after such date, the funds wired by such Purchaser
      to the Purchaser by wire transfer in immediately available funds.

     

    3. Escrow
      Agent to Hold and Disburse Escrowed Funds.
      The
      Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant
      to the terms of this Agreement, as follows: 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a) Simultaneous
      with the disbursement of the Escrowed Funds to the Company, the Escrow Agent
      shall allocate a portion of the Escrowed Funds in the aggregate amount of Seven
      Hundred Fifty Thousand Dollars ($750,000) (the “Public
      Relations Escrowed Funds”)
      to be
      delivered via wire transfer to Loeb
      & Loeb, LLP, as escrow
      agent for the Public Relations Escrowed Funds pursuant to the terms and
      conditions of the Investor and Public Relations Escrow Agreement dated as of
      even date herewith. Unless otherwise specified herein, the term “Escrowed Funds”
shall include the aggregate amount of the Public Relations Escrowed
      Funds.

     

    (b) At
      such
      time that the Offering Amount is deposited all executed Transaction Documents
      have been received and upon receipt of joint instructions from the Company
      and
      Vision, in substantially the form of Exhibit
      B
      hereto,
      the Escrow Agent shall release the Escrowed Funds, in accordance with such
      disbursement instructions, provided,
      however,
      that
      One Million Dollars ($1,000,000) of the Escrowed Funds shall not be released
      from escrow in accordance with Exhibit B (the “Held
      Back Escrow Funds”).

     

    The
      Held
      Back Escrow Funds shall remain in the escrow account until the Escrow Agent
      receives joint written notice from Vision and the Company notifying the Escrow
      Agent that the Company has complied with the covenants in Section 3.23
      (Registered Capital of Lihua Copper), Section 3.35 (Environmental Authority
      Approval for Jiangsu Lihua Copper Industry Co., Ltd.), Section 3.37 (Comply
      with
      Relevant Employment Laws in PRC), Section 3.38 (Construction Works Planning
      Permit and Construction Works Execution Permit for Lihua Copper), Section 3.43
      (Intellectual Property and Commercial and Trade Secrets), Section 3.44 (Payment
      of Stamp Tax), Section 3.45 (Filing of PRC Certificates) and Section 3.46 (Lihua
      Copper Pay-Off Loan from Lihua Electron) of the Securities Purchase Agreement
      (the “Held
      Back Release Conditions”)
      and
      such joint written notice authorizes and provides instructions for the release
      of the Held Back Escrow Funds, provided,
      that,
      such Held Back Release Conditions are satisfactorily completed prior to ninety
      (90) days from the date hereof. In the event that all of the Held Back Release
      Conditions are not satisfactorily completed by the date which is ninety (90)
      days following the date hereof, Vision shall provide the Escrow Agent with
      sole
      written notice authorizing the release of the Held Back Escrow Funds to be
      disbursed pro-rata to the Purchasers, as liquidated damages.

     

    (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 to 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
      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 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 the 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.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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 Purchasers relating to the
      Escrowed Funds, the Escrow Agent shall not be obligated to recognize any
      agreement between or among any of the Purchasers, 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 liable for any action taken or omitted by him in good faith and in no
      event shall the Escrow Agent be liable or responsible except for the Escrow
      Agent’s own gross negligence or willful misconduct. 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.

     

    (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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (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 it 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 claim,
      demand, 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
      reasonably deem sufficient to indemnify itself for any such loss or
      expense.

     

    (g) For
      purposes hereof, the terms “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
      and the Purchasers under Section 4 shall survive the termination hereof.
      Notwithstanding the foregoing, in the event that the Escrow Agent does not
      receive any instructions with respect to the disbursement of any Escrowed Funds
      by November 7, 2008, this Agreement shall terminate as of such date and all
      Escrowed Funds shall be returned to the parties from which they were received
      without interest thereon or deduction therefrom within five (5) business
      days.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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
      prior 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 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 (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).

     

    6. Form
      of Payments by Escrow Agent.

     

    (a) Any
      payments of the Escrowed Funds or 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 Purchasers. 

     

    (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 the following compensation from the
      Company:

     

    (a) Documentation
      Fee:
      The
      Company shall pay a documentation fee to the Escrow Agent of $2,000 which shall
      be payable upon release of the Escrowed Funds or termination of this Agreement
      as provided in Section 5 hereof.

     

    (b) Fees:
      The
      Company shall pay a fee of $500 to the Escrow Agent upon the deposit of the
      Escrowed Funds.

     

    (c) Interest:
      The
      Escrowed Funds shall be held in separate non-interest bearing escrow
      accounts.

     

    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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    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 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 this 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 the 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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c) 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. The Escrow Agent 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 one of the Purchasers and may
      continue to act as legal counsel for such Purchaser from time to time,
      notwithstanding its duties as the Escrow Agent hereunder. The Company and the
      Purchasers consent to the Escrow Agent acting in such capacity as legal counsel
      for one of the Purchasers and waive any claim that such representation
      represents a conflict of interest on the part of the Escrow Agent. The Company
      and the Purchasers understand that the Escrow Agent is relying explicitly on
      the
      foregoing provision in entering into this Escrow
      Agreement.

     

    (d) 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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

    

    
      	
              ANSLOW
                & JACLIN LLP

            
	 
	
              By:

            	
              /s/
                Gregg E. Jaclin

            
	 	
              Name:
                Gregg E. Jaclin, Esq.

            
	 	
              Title:
                Partner

            
	 	 
	
              LIHUA
                INTERNATIONAL, INC.

            
	 
	
              By:

            	
              /s/
                Zhu Jianhua

            
	 	
              Name:
                Zhu Jianhua

            
	 	
              Title:
                Chief Executive Officer and

              President

            
	 	 
	
              [PURCHASER]

            
	 
	
              By:

            	 
	 	
              Name:

            
	 	
              Title:

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A TO THE

    SECURITIES
      PURCHASE AGREEMENT

    

    
      
        

      

    

    

    LIST
      OF PURCHASERS

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    DISBURSEMENT
      REQUEST

     

    Reference
      is made to that certain Escrow Agreement, dated as of October 31, 2008, by
      and
      among Lihua International, Inc., a Delaware corporation (the “Company”),
      Anslow & Jaclin, LLP (the “Escrow
      Agent”),
      Vision Opportunity China LP, a closed-ended investment company incorporated
      in
      Guernsey (“Vision”),
      and
      each of the purchasers as set forth on Exhibit
      A attached
      thereto. Pursuant to the terms of the Escrow Agreement, the Company and Vision
      hereby request that the Escrow Agent disburse from the escrow account the
      Escrowed Funds in the amount and manner described in the attached Flow of Funds
      Memorandum. 

    

    
      	 	 	
              LIHUA
                INTERNATIONAL, INC.

            
	 	 	 
	
              Date:
                October ___, 2008

            	 	
              By: 

            
	 	 	
              Name:
                Jianhua Zhu

            
	 	 	
              Title:
                Chief Executive Officer and President

            
	 	 	 
	 	 	
              VISION
                OPPORTUNITY CHINA LP

            
	
              Date:
                October ___, 2008_

            	 	
              By:
                ______________________________

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    
      
        
        

      

      
        11Unassociated Document

     

    Exhibit
      10.4

    SECURITIES
      ESCROW AGREEMENT

     

    THIS
      SECURITIES ESCROW AGREEMENT (the “Agreement”),
      dated
      as of October 31, 2008, is entered into by and among Lihua International, Inc.,
      a Delaware corporation (the “Company”),
      Vision Opportunity China LP, a closed-ended investment company incorporated
      in
      Guernsey, as representative of the Purchasers (the “Purchaser
      Representative”),
      Magnify Wealth Enterprise Limited, a company organized in the British Virgin
      Islands (the “Principal
      Stockholder”),
      and
      Anslow & Jaclin, LLP, with an address at 195 Route 9 South, Suite 204,
      Manalapan, New Jersey 07726 (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 Purchasers will be purchasing from the Company units consisting of 6,818,182
      shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001
      per share (the “Series
      A Preferred”),
      initially convertible into 6,818,182 shares of the Company’s common stock, par
      value $0.0001 per share (the “Common
      Stock”),
      and
      warrants to purchase, in the aggregate, 1,500,000 shares of Common Stock (the
      “Warrants”)
      pursuant to that certain Securities Purchase Agreement (the “Purchase
      Agreement”)
      dated
      as of the date hereof (the “Closing
      Date”)
      by and
      among the Company and the Purchasers (the “Financing”);
      

     

    WHEREAS,
      the Company has issued shares of its Common Stock to the Principal Stockholder
      pursuant to that certain Share Exchange Agreement dated as of October 31, 2008,
      by and among Magnify Wealth Enterprise Limited, Ally Profit Investments Limited,
      a British Virgin Islands company (“Ally
      Profit”),
      the
      Company and the original controlling stockholders of the Company (the
“Share
      Exchange Agreement”).
      Upon
      consummation of the transactions contemplated by the Share Exchange Agreement,
      Ally Profit, together with its subsidiaries, became the wholly owned
      subsidiaries of the Company (the “Share
      Exchange Transaction”);

     

    WHEREAS,
      the Company and the Purchaser Representative agree that the capitalization
      table
      upon which the transactions contemplated by this Agreement and the Purchase
      Agreement are based is set forth as Schedule
      A
      hereto;
      and 

     

    WHEREAS,
      as an inducement to the Purchasers to enter into the Purchase Agreement, the
      Principal Stockholder has agreed to place the Escrow Shares (as hereinafter
      defined) into escrow for the benefit of the Purchasers in the event the Company
      fails to achieve the following financial performance thresholds for the 12-month
      periods ending December 31, 2008 (“2008”)
      and
      December 31, 2009 (“2009”):

     

    (a) In
      2008,
      both (i) Net Income, as reported by the Company in its audited financial
      statements for 2008 (the “2008
      Financial Statements”)
      equals
      or exceeds $12.0 million, and (ii) 2008 Net Income Earnings Per Share equals
      or
      exceeds $0.50 on a fully diluted basis and adjusted for any stock split,
      dividend, or similar recapitalization. “2008
      Net Income Earnings Per Share”
is
      to
      be calculated by dividing (A) the Net Income, as reported in the 2008 Financial
      Statements (the “2008
      Net Income”)
      by (B)
      the aggregate number of shares of the then outstanding Common Stock on a
      fully-diluted basis, which number shall include, without limitation, (x) the
      number of shares of Common Stock issuable upon conversion of the Company’s then
      outstanding shares of Series A Preferred, and (y) the number of shares of Common
      Stock issuable upon the exercise of any then outstanding preferred stock,
      warrants, convertible debt, options or other convertible securities of the
      Company (the performance thresholds set forth in (a)(i) and (ii) above shall
      be
      collectively referred to herein as the “2008
      Performance Thresholds”);

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b) In
      2009,
      both (i) Net Income, as reported by the Company in its audited financial
      statements for 2009 (the “2009
      Financial Statements”)
      equals
      or exceeds $18 million, and (ii) 2009 Net Income Earnings Per Share equals
      or
      exceeds $0.76 on a fully diluted basis and adjusted for any stock split,
      dividend or similar recapitalization. “2009
      Net Income Earnings Per Share”
is
      to
      be calculated by dividing (A) the Net Income, as reported in the 2009 Financial
      Statements (the “2009
      Net Income”)
      by (B)
      the aggregate number of shares of the then outstanding Common Stock on a
      fully-diluted basis, which number shall include, without limitation, (x) the
      number of shares of Common Stock issuable upon conversion of the Company’s then
      outstanding shares of Series A Preferred, and (y) the number of shares of Common
      Stock issuable upon the exercise of any then outstanding preferred stock,
      warrants, convertible debt, options or other convertible securities,
provided,
      however,
      that
      in
      the event the Company consummates a bona fide initial public offering of Common
      Stock such shares of Common Stock that are sold up to the first Five Million
      Dollars ($5,000,000) of such initial public offering shall be excluded from
      this
      calculation (all shares sold in the initial public offering in excess of
      $5,000,000 shall be included in calculating the number of
      shares
      of Common Stock issuable upon the exercise of any then outstanding preferred
      stock, warrants, convertible debt, options or other convertible
      securities)
      (the
      performance thresholds set forth in (b)(i) and (ii) above shall be collectively
      referred to herein as the “2009
      Performance Thresholds”
and
      together with the 2008 Performance Thresholds will be referred to as the
“Performance
      Thresholds”);
      and

    

    (c) For
      the
      purposes hereof, “Net
      Income”
shall
      be as defined in accordance with US GAAP, provided, however, that Net Income
      for
      each of 2008 and 2009 shall be increased by any non-cash charges incurred (i)
      as
      a result of the Financing, including without limitation, as a result of the
      issuance of the Warrants and upon conversion of the Series A Preferred, (ii)
      as
      a result of the release of the Escrow Shares to the Principal Stockholder
      pursuant to the terms of this Agreement, and (iii) as a result of the issuance
      of ordinary shares of the Principal Stockholder to Mr. Zhu Jianhua upon the
      exercise of options granted to Mr. Zhu by the Principal Stockholder, as of
      the
      date hereof.

     

    WHEREAS,
      the Company and the Purchaser Representative 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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 (the “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 Stockholder shall deliver to the
      Escrow Agent stock certificates equal to the number of shares of Common Stock
      constituting one hundred percent (100%) of the shares of Common Stock underlying
      the Series A Preferred Shares indicated on Schedule
      A
      hereto
      (such shares of Common Stock delivered by the Principal Stockholder plus such
      additional number of shares of Common Stock as may be required to be deposited
      hereunder pursuant to Sections 1.3, 1.4 or 1.5 hereof shall be collectively
      referred to in this Agreement as the “Escrow
      Shares”),
      along
      with updated stock powers executed in blank, signature medallion guaranteed
      or
      in other form and substance acceptable for transfer.

     

    1.3. The
      parties hereby agree that the Escrow Shares shall be distributed based on and
      subject to the achievement of the 2008 Performance Thresholds as set forth
      below:

     

    (i) If
      the
      Company achieves less than 50% of each of the 2008 Performance Thresholds,
      then
      the number of the Escrow Shares to be distributed to each Purchaser shall be
      calculated as follows: 

    

    (a) A
      =
X

     
      Y

    

    (b) B
      =
      (A)(Z)

    

    
      	
            	Where:	
              A
                =
                such Purchaser’s percentage ownership of Escrow
                Shares

            

    

    

    
      
        	
              	B
                =	
                the
                  number of Escrow Shares to be distributed to such
                  Purchaser

              

      

    

    

    
      
        	
              	X
                =	
                the
                  number of shares of Series A Preferred (on an as converted basis)
                  and
                  Conversion Shares owned by such Purchaser as of the date of distribution
                  of the Escrow Shares (the “Distribution
                  Date”)

              

      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
            	Y
              =	
              number
                of Series A Preferred Shares issued on the Closing Date (on an
                as-converted basis)

            

    

    

    
      	
            	Z
              =	
              the
                Escrow Shares

            

    

    

    Within
      five (5) business days of the Purchaser Representative’s receipt of the 2008
      Financial Statements pursuant to Section 1.7 hereof, the Purchaser
      Representative shall provide sole written instructions to the Escrow Agent
      instructing the Escrow Agent to issue and deliver the Escrow Shares to the
      Purchasers in accordance with the calculation above. Any Escrow Shares remaining
      after disbursement to the Purchasers in accordance with the calculation above
      shall be returned to the Escrow Account. Within five (5) business days after
      the
      release of the Escrow Shares to the Purchasers, the Principal Stockholder shall
      deposit into the Escrow Account stock certificates equal to the number of shares
      of Common Stock necessary to maintain one hundred percent (100%) of the shares
      of Common Stock underlying the Preferred Shares initially issuable under the
      Purchase Agreement in the Escrow Account.

     

    (ii) If
      the
      Company achieves at least 50% but less than 95% of the 2008 Performance
      Thresholds, the Escrow Agent shall deliver to each Purchaser its number of
      Escrow Shares in accordance with the calculation below. 

    

    (a) A
      =
X
      

     
      Y

    

    (b) B
      =
      2*(Z*A) 

    

    
      	
            	Where:	
              A
                =
                such Purchaser’s percentage ownership of Escrow Shares

            

    

    

    
      	
            	B
              =	
              the
                number of Escrow Shares to be distributed to such
                Purchaser

            

    

    

    
      	
            	X
              =	
              the
                number of shares of Series A Preferred (on an as converted basis)
                and
                Conversion Shares owned by such Purchaser as of the Distribution
                Date

            

    

    

    
      	
            	Y
              =	
              number
                of Series A Preferred Shares issued on the Closing Date (on an
                as-converted basis)

            

    

    

    
      	
            	Z
              =	
              the
                Escrow Shares multiplied by the Lowest Threshold
                Percentage

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    For
      purposes hereof, the “Lowest
      Threshold Percentage”
means
      the percentage by which the lowest of the applicable Performance Thresholds
      was
      not achieved. By way of example, if the Company’s Earnings Per Share for 2008 is
      an amount equal to 60% of the 2008 Performance Thresholds and the Company’s Net
      Income reported on the 2008 Financial Statements is an amount equal to 70%
      of
      the 2008 Performance Thresholds, the Lowest Threshold Percentage would be 40%
      (100%-60%). Within five (5) business days of the Purchaser Representative’s
      receipt of the 2008 Financial Statements pursuant to Section 1.7 hereof, the
      Purchaser Representative shall provide sole written instructions to the Escrow
      Agent instructing the Escrow Agent to issue and deliver the Escrow Shares to
      the
      Purchasers in accordance with the calculation above. Any Escrow Shares remaining
      after disbursement to the Purchasers in accordance with the calculation above
      shall be returned to the Escrow Account. Within five (5) business days after
      the
      release of the Escrow Shares to the Purchasers, the Principal Stockholder shall
      deposit into the Escrow Account stock certificates equal to the number of shares
      of Common Stock necessary to maintain one hundred percent (100%) of the shares
      of Common Stock underlying the Preferred Shares initially issuable under the
      Purchase Agreement in the Escrow Account.

     

    (iii) If
      the
      Company achieves at least 95% of each of the 2008 Performance Thresholds, then
      the Escrow Shares shall continue to be held in escrow hereunder. 

    

    (iv) Notwithstanding
      anything to the contrary set forth herein, only those Purchasers who own shares
      of Series A Preferred or Conversion Shares of the Company at the time that
      the
      Escrow Shares are distributed hereunder shall be entitled to receive Escrow
      Shares calculated based on their ownership interest at the time such Escrow
      Shares are distributed hereunder. Any Escrow Shares not delivered to any
      Purchaser because such Purchaser no longer holds shares of Series A Preferred
      or
      Conversion Shares will be returned to the Escrow Account. If any Purchaser
      transfers Preferred Shares purchased pursuant to the Purchase Agreement, the
      rights to the Escrow Shares shall similarly transfer to such transferee,
      pursuant to the terms in this Agreement, with no further action required by
      the
      Purchaser, the transferee or the Company.

     

    1.4. The
      parties hereby agree that the Escrow Shares shall be distributed based upon
      and
      subject to the achievement of the 2009 Performance Thresholds as set forth
      below:

     

    (i) If
      the
      Company achieves less than 50% of each of the 2009 Performance Thresholds,
      then
      the number of the Escrow Shares to be distributed to each Purchaser shall be
      calculated using the same formula set forth in Section 1.3(i) above. Within
      five
      (5) business days of the Purchaser Representative’s receipt of the 2009
      Financial Statements pursuant to Section 1.7 hereof, the Purchaser
      Representative shall provide sole written instruction to the Escrow Agent
      instructing the Escrow Agent to issue and deliver the Escrow Shares to the
      Purchasers in accordance with the calculation set forth in Section 1.3(i) above.
      Any Escrow Shares remaining after disbursement to the Purchasers shall be
      returned to the Principal Stockholder. 

     

    (ii) If
      the
      Company achieves at least 50% but less than 95% of the 2009 Performance
      Thresholds, the Escrow Agent shall deliver to each Purchaser its number of
      Escrow Shares in accordance with the calculation set forth in Section 1.3(ii)
      above. Within five (5) business days of the Purchaser Representative’s receipt
      of the 2009 Financial Statements pursuant to Section 1.7 hereof, the Purchaser
      Representative shall provide sole written instruction to the Escrow Agent
      instructing the Escrow Agent to issue and deliver the Escrow Shares to the
      Purchasers in accordance with the calculation set forth in Section 1.3(ii)
      above. Any Escrow Shares remaining after disbursement to the Purchasers shall
      be
      returned to the Principal Stockholder. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (iii) In
      the
      event the Company achieves at least 95% of each of the 2009 Performance
      Thresholds, all of the Escrow Shares shall be returned to the Principal
      Stockholder at the address set forth in Section 3.2 hereof.

     

    (iv) 
      Notwithstanding anything to the contrary set forth herein, only those Purchasers
      who own shares of Series A Preferred or Conversion Shares of the Company at
      the
      time that the Escrow Shares are distributed hereunder shall be entitled to
      receive Escrow Shares calculated based on their ownership interest at the time
      when such Escrow Shares are distributed hereunder. If any Purchaser transfers
      Preferred Shares purchased hereunder, any Escrow Shares pursuant to this
      Agreement shall similarly transfer to such transferee with no further action
      required by the Purchaser, the transferee or the Company. Any Escrow Shares
      not
      delivered to any Purchaser because such Purchaser no longer holds shares of
      Series A Preferred or Conversion Shares will be returned to the Principal
      Stockholder.

     

    1.5. If
      the
      Company and the Principal Stockholder fail to timely comply with their
      respective obligations set forth in Section 3.22 of the Purchase Agreement
      (the
“Listing
      Obligation”),
      then
      upon sole written instruction by the Purchaser Representative to the Escrow
      Agent, 750,000 of the Escrow Shares (the “Penalty
      Shares”)
      shall
      be distributed from the Escrow Account. Each Purchaser shall receive such number
      of Penalty Shares calculated as follows: 

    

    A
      =
      (Z)*(X/Y)

     

    
      	
            	Where:	
              A
                =
                the number of Penalty Shares to be distributed to such Purchaser
                

            

    

    

    
      	
            	X
              =	
              the
                number of shares of Series A Preferred (on an as converted basis)
                and
                Conversion Shares owned by such Purchaser as of the Distribution
                Date

            

    

    

    
      	
            	Y
              =	
              the
                number of Series A Preferred Shares issued as of the Closing Date
                (on an
                as converted basis)

            

    

    

    
      	
            	Z
              =	
              the
                Penalty Shares

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    Within
      five (5) business days after the release of the Penalty Shares to the
      Purchasers, the Principal Stockholder shall deposit into the Escrow Account,
      stock certificates evidencing an aggregate of 750,000 shares of Common Stock.
      

     

    1.6. If
      the
      Company does not achieve either of the 2008 Performance Thresholds or either
      of
      the 2009 Performance Thresholds and/or if the Company does not comply with
      the
      Listing Obligation, the Company shall use reasonable best efforts to promptly
      cause the Escrow Shares or the Penalty Shares, as applicable, to be delivered
      to
      the Purchasers, including causing its transfer agent to promptly, but in no
      event longer than five (5) business days, transfer the certificates into the
      names of the Purchasers 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 delivery of the 2008 Financial Statements or 2009 Financial
      Statements, as applicable, to the Purchaser Representative, or, within five
      business days of October 31, 2009, in the case of the Penalty
      Shares.

     

    1.7. The
      Company will provide the Purchaser Representative with (i) the Company’s audited
      financial statements for 2008, prepared in accordance with US GAAP, no later
      than the date for filing the Company’s Annual Report on Form 10-K for 2008,
      including any extension for filing the 2008 Annual Report which may be requested
      under Rule 12b-25 of the Securities Exchange Act of 1934, as amended (the
“Annual
      Report”)
      with
      the Securities and Exchange Commission (“SEC”),
      and
      (ii) the Company’s audited financial statements for 2009, prepared in accordance
      with US GAAP, on or before the date for filing the Company’s 2009 Annual Report
      with the SEC, so as to allow the Purchaser Representative the opportunity to
      evaluate whether each of the 2008 Performance Thresholds and each of the 2009
      Performance Thresholds were attained. In the event that the Purchaser
      Representative receives the financial information prior to its dissemination
      by
      the Company in either a press release or in the Company’s periodic reports filed
      with the SEC, the Company shall issue a press release announcing the information
      or file a Form 8-K as required under Regulation FD.

      

    ARTICLE
      II

    REPRESENTATIONS
      OF THE PRINCIPAL STOCKHOLDER

     

    2.1. The
      Principal Stockholder hereby represents and warrants to the Purchasers and
      the
      Purchaser Representative as follows:

     

    (i) The
      Principal Stockholder is the record and beneficial owner of the Escrow Shares
      placed into escrow pursuant to this Agreement and owns such Escrow Shares,
      free
      and clear of all pledges, liens, claims and encumbrances, except encumbrances
      created by this Agreement and the Principal Stockholder Lock-Up Agreement
      entered into as of even date herewith and in connection with the Financing.
      There are no restrictions on the ability of the Principal Stockholder to
      transfer the Escrow Shares placed into escrow pursuant to this Agreement or
      to
      enter into this Agreement other than transfer restrictions under the Principal
      Stockholder Lock-Up Agreement and/or applicable federal and state securities
      laws. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (ii) The
      performance of this Agreement and compliance with the provisions hereof will
      not
      violate any provision of any law applicable to the Principal Stockholder and
      will not conflict with or result in any material breach of any of the terms,
      conditions or provisions of, or constitute a default under the terms of the
      certificate of incorporation or by-laws of the Principal Stockholder, or any
      indenture, mortgage, deed of trust or other agreement or instrument binding
      upon
      the Principal Stockholder or affecting the Escrow Shares or result in the
      creation or imposition of any lien, charge or encumbrance upon, any of the
      properties or assets of the Principal Stockholder, the creation of which would
      have a material adverse effect on the business and operations of the Principal
      Stockholder. 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 Stockholder, other than those
      already obtained.

     

    ARTICLE
      III

    MISCELLANEOUS

     

    3.1. The
      Company, at the time of the Closing, will pay Escrow Agent a total of $2,000
      for
      all services rendered by Escrow Agent hereunder.

     

    3.2. No
      waiver
      of, 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.

     

    3.3 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 3.3), or the refusal to accept same, the notice, demand, consent,
      request, instruction or other communication shall be deemed received on the
      third 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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

      If
        to
        Escrow
        Agent:            Anslow
        & Jaclin, LLP

      195
        Route
        9 South, Suite 204

      Manalapan,
        New Jersey 07726

      Attention:
        Joseph M. Lucosky, Esq.

      Tel
        No.:
        732-409-1212

      Fax
        No.:
        732-588-1188

    

     

    If
      to the
      Company or the Principal Stockholder:

    

    Lihua
      International, Inc.

    c/o
      Lihua
      Holdings Limited,

    Houxiang
      Five Star Industry District

    Danyang
      City, Jiangsu Province, PRC

    Attention:
      Mr. Zhu Jianhua  

    Tel.
      No.:
      86 -511-8631-7399

    Fax
      No.:
      86-511-8631-2040

     

    With
      a
      copy to (which shall not constitute notice):

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      NY 10154

    Attention:
      Mitchell S. Nussbaum, Esq.

    Tel.
      No.:
      (212) 407-4000

    Fax
      No.:
      (212) 407-4990 

     

    If
      to the
      Purchaser Representative: 

    Vision
      Opportunity China LP

    20
      W.
      55th Street, 5th Floor

    New
      York,
      New York 10019

    Attention:
      Yiting Liu

    Tel.
      No.:
      (212) 849-8238

    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.

     

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

     

    3.5. 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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    3.6. 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
      all parties had prepared the same. 

     

    3.7. 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.

     

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

     

    3.9. The
      Escrow Agent shall be obligated only for the performance of such duties as
      are
      specifically set forth herein and may rely and shall be protected in relying
      or
      refraining from acting on any instrument reasonably believed by the Escrow
      Agent
      to be genuine and to have been signed or presented by the proper party or
      parties. The Escrow Agent shall not be personally liable for any act the Escrow
      Agent may do or omit to do hereunder as the Escrow Agent while acting in good
      faith and in the absence of gross negligence, fraud or willful misconduct,
      and
      any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
      Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
      absence of gross negligence, fraud or willful misconduct.

     

    3.10. 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.

     

    3.11. The
      Escrow Agent shall not be liable in any respect on account of the identity,
      authorization or rights of the parties executing or delivering or purporting
      to
      execute or deliver any documents or papers deposited or called for thereunder
      in
      the absence of gross negligence, fraud or willful misconduct.

     

    3.12. The
      Escrow Agent shall be entitled to employ such legal counsel and other experts
      as
      the Escrow Agent may deem necessary to properly 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 one of the Purchasers and may
      continue to act as legal counsel for such Purchaser from time to time,
      notwithstanding its duties as the Escrow Agent hereunder. The Company and the
      Purchasers consent to the Escrow Agent in such capacity as legal counsel for
      one
      of the Purchasers and waive any claim that such representation represents a
      conflict of interest on the part of the Escrow Agent. The Company and the
      Purchasers understand that the Escrow Agent is relying explicitly on the
      foregoing provision in entering into this Escrow
      Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    3.13. The
      Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
      Escrow Agent shall resign by giving written notice to the Company and the
      Purchasers. In the event of any such resignation, the Purchasers 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.

     

    3.14. If
      the
      Escrow Agent reasonably requires other or further instruments in connection
      with
      this Escrow Agreement or obligations in respect hereto, the necessary parties
      hereto shall use its best efforts to join in furnishing such
      instruments.

     

    3.15. It
      is
      understood and agreed that should any dispute arise with respect to the delivery
      and/or ownership or right of possession of the documents or the Escrow 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.

     

    3.16. The
      Company agrees to indemnify and hold harmless the Escrow Agent and its partners,
      employees, agents and representatives from any and all claims, liabilities,
      costs or expenses in any way arising from or relating to the duties or
      performance of the Escrow Agent hereunder or the transactions contemplated
      hereby 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]

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO SECURITIES ESCROW AGREEMENT]

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
      31st
      day of
      October, 2008.

     

    LIHUA
      INTERNATIONAL, INC.

    

    
      	
              By:

            	
              /s/
                Zhu Jianhua

            

    

    Name:
      Zhu
      Jianhua

    Title:
      Chief Executive Officer and President

     

    PURCHASER
      REPRESENTATIVE:

     

    VISION
      OPPORTUNITY CHINA
      LP

    

    
      	
              By:

            	
              /s/
                Adam Benowitz

            

    

    Name: 
      Adam Benowitz

    Title:
      Authorized Signatory

     

    ESCROW
      AGENT:

     

    ANSLOW
      & JACLIN, LLP

    

    
      	
              By:

            	
              /s/
                Greg
                E. Jaclin

            

    

    Name:
      Gregg E. Jaclin

    Title:
      Partner

    

    PRINCIPAL
      STOCKHOLDER:

    

    
      	
              By:

            	
              
                /s/
                  Zhu Jianhua

              

            

    

    Name:
      Magnify Wealth Enterprise Limited

    Authorized
      Signatory: Zhu Jianhua

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Schedule
      A

     

    6,818,182
      shares of Common Stock to be deposited as Escrow Shares

     

    
      
        
        

      

      
        13

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