SECURITIES ESCROW AND PLEDGE AGREEMENT
Exhibit
99.5
This
SECURITIES ESCROW AND PLEDGE AGREEMENT (this “Agreement”), dated as of
January 5, 2010, is entered into by and among Link Resources, Inc., a Nevada
corporation (the “Company”), Euro Pacific
Capital, Inc., as representative of the Investors (the “Investor Representative”),
Glory Period Limited, a company organized in the British Virgin Islands (the
“Principal
Stockholder”), and Escrow, LLC (the “Escrow
Agent”). Capitalized terms used but not defined herein shall have
the meanings set forth in the Purchase Agreement (as defined
below).
WHEREAS, concurrently with the
execution hereof, the Company is consummating a private placement transaction
with certain accredited investors (the “Investors”), whereby the
Company will issue units, with each unit consisting of: (i) an eight (8%)
percent senior convertible promissory note (the “Notes”) of the Company in the
aggregate principal amount of $2.00, which Notes shall be convertible into
shares of the Company’s common stock, par value $0.001 per share (together with
any securities into which such shares may be reclassified, the “Common Stock”) and (ii) a
common stock purchase warrant to purchase one (1) share of Common
Stock (the “Financing
Transaction”);
WHEREAS, in connection with
the Financing Transaction, the Company has entered into a Securities Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), by and
among the Company and the Investors;
WHEREAS, in order to provide
security to the Investors in the event of an occurrence of an Event of Default
(as defined in the Notes) under the Notes , the Principal Stockholder has agreed
to pledge and deposit stock certificate(s) representing 1,000,000 shares of
Common Stock (the “Escrow
Shares”) into escrow for the benefit of the Investors; and
WHEREAS, the Company and the
Investor Representative (acting as the lawful agent and attorney-in-fact of the
Investors) have requested that the Escrow Agent hold the Escrow Shares on the
terms and conditions set forth in this Agreement and the Escrow Agent has agreed
to act as escrow agent pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, in
consideration of the covenants and mutual promises contained herein and other
good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged and intending to be legally bound hereby, the parties agree
as follows:
ARTICLE
I.
TERMS
OF THE ESCROW
Section
1.01 Appointment of Escrow
Agent. The parties hereby agree to appoint the Escrow Agent as
escrow agent to act in accordance with the terms and conditions set forth in
this Agreement, and Escrow Agent hereby accepts such appointment and agrees to
act in accordance with such terms and conditions.
1
Section
1.02 Establishment of Escrow
Account.
(a) Upon
the execution of this Agreement, the Principal Stockholder shall, as a pledge of
securities, deposit the Escrow Agent a certificate or certificates
representing the Escrow Shares, together with duly executed stock powers or
other appropriate transfer documents executed in blank by the Principal
Stockholder (such certificates and such transfer documents, collectively, the
“Escrow
Materials”). The Escrow Agent shall hold the Escrow Materials
and distribute the same as contemplated by this Agreement.
(b) The
Principal Stockholder and the Investor Representative (as the lawful agent and
attorney-in-fact of the Investors) hereby agree that the deposit by the
Principal Stockholder of the Escrow Materials with the Escrow Agent on the terms
and conditions set forth herein is intended to be a bona fide pledge of
securities by an affiliate of the Company for the benefit of the Investors (as
pledgees), in each case within the meaning of and as contemplated by Rule
144(d)(3)(iv) promulgated by the Securities and Exchange
Commission.
Section
1.03 Release of Escrow
Shares.
(a) Release Upon an Event of
Default. Upon and anytime after the occurrence of an Event of Default
(following the expiration of applicable cure periods, as the case may be, as
provided for in the Notes), and provided that the Investors have incurred
damages as a result of the occurrence of such Event of Default, the Investor
Representative shall have the right to provide written notice of such Event of Default (the
“Default Notice”) to the
Escrow Agent, with copies to the Principal Stockholder and the
Company. The Default Notice shall contain a written description of:
(i) the specific Event of Default(s) which occurred and (ii) a recitation of the
damages incurred by the Investors as a result thereof. As soon as is
practicable after receipt of the Default Notice, the Escrow Agent shall deliver
to the Investor Representative the Escrow Materials held by the Escrow Agent
hereunder. Upon receipt of the Escrow Materials, the Investor
Representative shall have the right to distribute the Escrow Shares to the
Investors then holding Notes based on their pro rata participation in the
Financing Transaction, provided that any such distribution shall be undertaken
in full compliance with all applicable federal, state or foreign laws, rules and
regulations. The Investor Representative shall indemnify and hold
harmless the Company, the Principal Stockholder and their respective affiliates
from and against (and shall pay for, on demand, the cost of) all claims,
damages, costs, fees and expenses incurred by them as a result of the failure by
the Investor Representative to distribute the Escrow Shares in compliance with
applicable federal, state or foreign laws, rules and regulations.
(b) Release and Termination Upon
Payment or
Conversion. Upon the earlier to occur of: (i) the full payment
of all amounts due to the Investors under the Notes by repayment in accordance
with the terms of the Notes or (ii) the conversion of fifty percent (50%) of the
principal face value of Notes into shares of Common Stock in accordance with the
terms of the Notes (the date of earlier to occur of such two events being
referred to as the “Release
Date”), all parties hereto (including the Investor Representative on
behalf of all Investors) shall notify the Escrow Agent to such effect in
writing. Upon receipt of such written notice, the Escrow Agent shall
return all Escrow Materials to the Principal Stockholder, whereupon any and all
rights of Investor Representative and the Investors in the Escrow Materials
shall be terminated. Notwithstanding anything to the contrary
contained herein, upon the Release Date, this Agreement and the Investors’
rights in and to the Escrow Shares shall terminate.
2
Section
1.04 Compensation. For
services rendered pursuant to this Agreement, the Company shall pay a
documentation fee to the Escrow Agent of $1,000.00 out of the proceeds of the
Financing Transaction.
ARTICLE
II.
REPRESENTATIONS
OF THE PRINCIPAL STOCKHOLDER
Section
2.01 Representations and
Warranties. The Principal Stockholder hereby represents and warrants
to the Investors and the Investor Representative as follows:
(a) The
Principal Stockholder is the record and beneficial owner of the Escrow Shares
placed into escrow and owns the Escrow Shares, free and clear of all pledges,
liens, claims and encumbrances, except encumbrances created by this
Agreement. There are no restrictions on the ability of the Principal
Stockholder to transfer the Escrow Shares, other than transfer restrictions
under the Lock-Up Agreement and/or applicable federal and state securities
laws.
(b) 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. Upon the transfer of the Escrow Shares to the Investors
pursuant to this Agreement, the Investors will be the record and beneficial
owners of all of such shares and have good and valid title to all of such
shares, free and clear of all encumbrances.
ARTICLE
III.
ESCROW
AGENT
Section
3.01 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 Investor Representative
and the Escrow Agent.
Section
3.02 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
Section
3.03 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.
Section
3.04 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.
Section
3.05 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.
Section
3.06 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 Investors. In the
event of any such resignation, the Investors 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.
Section
3.07 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.
Section
3.08 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 or Escrow
Materials 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.
Section
3.09 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.
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ARTICLE
IV.
MISCELLANEOUS
Section
4.01 Investor Representative
Status. Investor Representative hereby represents and warrants
to the Company, the Principal Stockholder and the Escrow Agent that, pursuant to
the terms of the Purchase Agreement, it is the lawful agent and attorney-in-fact
of each of the Investors and has the due power and authority to act on behalf of
the Investors under this Agreement.
Section
4.02 Waiver. 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.
Section
4.03 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 fax machine).
If any notice, demand, consent, request, instruction or other
communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this Section 4.02), or the refusal to
accept same, the notice, demand, consent, request, instruction or other
communication shall be deemed received on the second business day the notice is
sent (as evidenced by a sworn affidavit of the sender). All such notices,
demands, consents, requests, instructions and other communications will be sent
to the following addresses or facsimile numbers as applicable.
If to
Escrow Agent:
Escrow,
LLC
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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If to the
Company or the Principal Stockholder:
▇/▇
▇▇▇▇▇▇ ▇▇▇▇▇ Pharmaceuticals Group Co. Ltd.
▇▇. ▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention:
Hongwei Qu
Fax
Number: ▇▇▇-▇▇▇▇-▇▇▇▇▇▇▇
With a
copy to (which shall not constitute notice):
Ellenoff
▇▇▇▇▇▇▇▇ & Schole LLP
▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇
If to the
Investor Representative:
Euro
Pacific Capital, Inc.
▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Mr. ▇▇▇▇▇▇ ▇▇▇
Fax
Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a
copy to (which shall not constitute notice):
Pillsbury
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇
▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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.
6
Section
4.04 Successors and
Assigns. This Escrow Agreement shall be binding upon and shall inure to
the benefit of the permitted successors and permitted assigns of the parties
hereto.
Section
4.05 Entire Agreement;
Amendment. This Agreement contains the entire understanding and agreement
of the parties relating to the subject matter hereof and supersedes all prior
and/or contemporaneous understandings and agreements of any kind and nature
(whether written or oral) among the parties with respect to such subject matter.
This Escrow Agreement may not be modified, changed, supplemented, amended 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. Notwithstanding anything
to the contrary in this Agreement, none of the provisions of Article I hereof or
this Section 4.4 may be modified, changed, supplemented, amended or terminated,
nor may any such provision be waived, without the prior written consent of the
Investors holding a majority of the Preferred Shares as of the date of such
modification, change, supplement, amendment, termination or waiver (based on the
aggregate number of Preferred Shares held by all of the Investors as of the date
of such modification, change, supplement, amendment, termination or
waiver).
Section
4.06 Headings. The section
headings contained in this Agreement are inserted for reference purposes only
and shall not affect in any way the meaning, construction or interpretation of
this Agreement. Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate. References to the
singular shall include the plural and vice versa.
Section
4.07 Governing Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York, without giving effect to any of the conflicts of
law principles which would result in the application of the substantive law of
another jurisdiction. This Agreement shall not be interpreted or construed with
any presumption against the party causing this Agreement to be
drafted.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties hereto have executed this Securities Escrow and Pledge Agreement as of
date first written above.
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COMPANY:
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LINK
RESOURCES INC.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President
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INVESTOR
REPRESENTATIVE:
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EURO
PACIFIC CAPITAL, INC.
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By:
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/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Head
of Capital Markets
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PRINCIPAL
STOCKHOLDER:
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GLORY
PERIOD LIMITED
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By:
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/s/ Hongwei Qu
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Name:
Hongwei QU
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Title: President
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ESCROW
AGENT:
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ESCROW,
LLC
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice
President
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