Exhibit 10.8
REAL ESTATE SHARE ESCROW
AGREEMENT
REAL ESTATE SHARE ESCROW AGREEMENT (the “
Agreement ”), dated as of August 26, 2008, is entered
into by and among CHINA VALVES TECHNOLOGY, INC., a Nevada
corporation (the “ Company ”), BIN FANG (the
“ Principal ”), BREAN MURRAY, CARRET & CO.,
LLC, as representative (together with its successors and assigns,
the “ Investor Representative ”) of the
Investors who are parties to the Purchase Agreement (as defined
below), and Escrow, LLC, with an address at 20 Rock Pointe, Suite
204, Warrenton, VA 20186 (the “ Escrow Agent ”).
Capitalized terms used, but not defined herein shall have the
meanings set forth in the Securities Purchase Agreement, dated as
of the date hereof among the Company, Hong Kong, WFOE and the
Investors (the “ Purchase Agreement
”).
BACKGROUND
The Principal owns all of the issued and
outstanding equity interests in Kaifeng High Pressure Valve Steel
Casting Limited Liability Company, a corporation formed under the
laws of the People’s Republic of China (the “
Casting Company ”). The Casting Company has
entered into an agreement, dated on or about the date hereof which,
as translated to English, is substantially in the form of
Exhibit A (the “ Real Estate Transfer Agreement
”), relating to the transfer to Henan Kaifeng High Pressure
Valve Co., Ltd., a Chinese subsidiary of the Company (the “
PRC Sub ”), of the real estate (the “ Real
Estate ”) described in the Real Estate Transfer
Agreement.
In order to ensure that the Real Estate is
transferred to the PRC Sub promptly and in accordance with the
terms of the Real Estate Transfer Agreement, the Investors have
requested that the Principal enter into this Agreement pursuant to
which he will personally agree to take any and all actions
necessary to consummate the transfer of the Real Estate in
accordance with the Real Estate Transfer Agreement. In
consideration for the agreement of the Principal to cause the
Casting Company to transfer the Real Estate, the Company will issue
to the Principal, or his designee, Five Million, Five Hundred
Thousand Shares (the “ Escrow Shares ”) of the
Company’s Common Stock on the date hereof. The
Escrow Shares will be held in escrow in accordance with the terms
of this Agreement to further ensure the consummation of the
transactions contemplated by the Real Estate Transfer
Agreement.
The execution and delivery of this Agreement is
a condition precedent to the consummation of the transactions
contemplated by the Purchase Agreement and the Investors would not
consummate the transactions, but for the existence of this
Agreement.
NOW, THEREFORE, in consideration of the
covenants and mutual promises contained herein and other good and
valuable consideration, the receipt and legal sufficiency of which
are hereby acknowledged and intending to be legally bound hereby,
the parties agree as follows:
ARTICLE I
TERMS OF THE ESCROW
1.1. The parties to
this Agreement hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares
as contemplated by this Agreement.
1.2. On the date
hereof, the Company shall issue to the Principal, or his designee,
the Escrow Shares in consideration for the various agreements of
the Principal set forth in this Agreement. The Escrow
Shares shall be delivered by the Company directly to the Escrow
Agent. On the date hereof, the Principal or his
designee, as applicable, shall deliver to the Escrow Agent an
undated medallion guaranteed stock power (or such other instrument
or document as may be required by the Company’s transfer
agent to effectuate the transfer of the Escrow Shares as
contemplated by this Agreement).
1.3. The Principal
shall use his best efforts to effectuate the transfer of the Real
Estate to the PRC Sub in accordance with the Real Estate Transfer
Agreement within ten (10) months following the date hereof (the
“ Outside Date ”) and will not take any action
which could frustrate or delay such transfer. In
addition, the Principal shall, and shall cause the Casting Company
to, perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement, the Real Estate Transfer
Agreement and the consummation of the transactions contemplated
hereby and thereby.
1.4. The Escrow Shares
will be released from the escrow as follows:
(a) If the Real
Estate has not been transferred to the PRC Sub in accordance with
the Real Estate Transfer Agreement on or before the Outside Date,
then the Investor Representative may instruct the Escrow Agent to
release the Escrow Shares to the Company and, promptly upon receipt
of such instructions, the Escrow Agent will so release the Escrow
Shares to the Company. The Escrow Agent need only rely
on the instruction from the Investor Representative in this regard
and will disregard any contrary instructions. In such
event the Company shall immediately deliver the certificates
representing the Escrow Shares to the Company’s transfer
agent along with written instructions to the transfer agent
instructing the transfer agent to cancel the Escrow Shares
whereupon such Escrow Shares shall no longer be issued and
outstanding.
(b) If the Real
Estate has been transferred to the PRC Sub in accordance with the
Real Estate Transfer Agreement on or before the Outside Date, then
the Principal and the Investor Representative shall jointly
instruct the Escrow Agent to release the Escrow Shares to the
Principal or his designee and, promptly upon receipt of such
instructions, the Escrow Agent will so release the Escrow Shares to
the Principal or his designee.
(c) Notwithstanding
any other provision of this Agreement, if at any time Escrow Agent
shall receive from the Principal and the Investor Representative
(prior to being directed to take action by a court) joint written
instructions as to the delivery of the Escrow Shares or any portion
thereof, Escrow Agent shall deliver the Escrow Shares in accordance
with such joint written instructions.
ARTICLE II
ESCROW AGENT
2.1 Interpleader . In the event this
Agreement or the Escrow Shares becomes the subject of litigation,
or if the Escrow Agent shall desire to do so for any other reason,
the Company authorizes the Escrow Agent, at its option, to deposit
the Escrow Shares with the clerk of the court in which the
litigation is pending, or a court of competent jurisdiction if no
litigation is pending, and thereupon the Escrow Agent shall be
fully relieved and discharged of any further responsibility with
regard thereto. The Company also authorizes the Escrow
Agent, if it receives conflicting claims to the Escrow Shares, is
threatened with litigation or if the Escrow Agent shall desire to
do so for any other reason, to interplead all interested parties in
any court of competent jurisdiction and to deposit the Escrow
Shares with the clerk of that court and thereupon the Escrow Agent
shall be fully relieved and discharged of any further
responsibility hereunder to the parties from which they were
received.
2.2
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 o
