ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of September 7, 2006,
by and among Gas Investment China Co., Ltd., a company organized under the laws
of the British Virgin Islands (the "Company"), Vision Opportunity Master Fund,
Ltd. ("Vision") and the other purchasers signatory hereto (collectively with
Vision, the "Purchasers"), and Kramer Levin Naftalis & Frankel LLP, with an
address at 1177 Avenue of the Americas, New York, New York 10036 (the "Escrow
Agent"). Capitalized terms used but not defined herein shall have the meanings
set forth in the Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Purchasers will be purchasing from Dolce Ventures Inc., a
Utah corporation ("Dolce"), shares of Dolce's Series B Convertible Preferred
Stock and certain warrants (collectively, the "Securities"), pursuant to a
Series B Convertible Preferred Stock Purchase Agreement to be entered into by
and among Dolce and the Purchasers (the "Purchase Agreement");
WHEREAS, simultaneously with the consummation of the transactions
contemplated by the Purchase Agreement, Dolce will issue shares of its Series A
Preferred Stock to the shareholders of the Company pursuant to a certain Share
Exchange Agreement, and upon the consummation of the transactions contemplated
by such Share Exchange Agreement, the Company will become a wholly-owned
subsidiary of Dolce;
WHEREAS, the Company and the Purchasers have requested that the Escrow
Agent hold the subscription amounts with respect to the purchase of the
Securities in escrow until the Escrow Agent has received all closing documents
and deliveries required under Article IV of the Purchase Agreement; and
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE I
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
the Securities as contemplated by the Purchase Agreement.
1.2. Upon the Escrow Agent's receipt of the aggregate subscription amounts
into its master escrow account, together with copies of counterpart signature
pages of the Transaction Documents from each Purchaser and the Company and all
other closing documents and deliveries required under Article IV of the Purchase
Agreement, it shall advise the Company and Vision, or their designated attorney
or agent, of the amount of funds it has received into its master escrow account.
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1.3. Wire transfers to the Escrow Agent shall be made as follows:
Bank: Citibank, N.A.
666 Fifth Avenue
New York, NY 10103
ABA No.: 021000089
Account Name: Kramer Levin Naftalis & Frankel LLP IOLA Account
Account No.: 37317968
Reference: Dolce Ventures Inc. / Christopher S. Auguste
1.4. The Company and Vision, promptly after being advised by the Escrow
Agent that it has received the subscription amounts for the Closing, copies of
counterpart signature pages of the Transaction Documents from each Purchaser and
the Company and all other closing documents and deliveries required under
Article IV of the Purchase Agreement, shall deliver to the Escrow Agent a
Release Notice, in the form attached hereto as Exhibit A (the "Release Notice").
1.5. Once the Escrow Agent receives the Release Notice executed by the
Company and Vision, the Escrow Agent shall wire the subscription proceeds per
the written instructions of the Company and Vision, net of fees, expenses and
any other disbursements as set forth in the Release Notice.
1.6. Wire transfers to the Company shall be made pursuant to written
instructions from the Company provided to the Escrow Agent.
1.7. Upon the written request from a Purchaser to the Escrow Agent, the
Escrow Agent shall promptly return the subscription proceeds to each Purchaser
pursuant to written wire instructions to be delivered by such Purchaser to the
Escrow Agent.
ARTICLE II
MISCELLANEOUS
2.1. No waiver or any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of the time
for performance of any other obligation or act.
2.2. All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent as set forth in the Purchase Agreement.
2.3. This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.
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2.4. This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.
2.5. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
2.6. The parties hereto expressly agree that this Escrow Agreement shall
be governed by, interpreted under and construed and enforced in accordance with
the laws of the State of New York, without regard to conflicts of law principles
that would result in the application of the substantive laws of another
jurisdiction. Any action to enforce, arising out of, or relating in any way to,
any provisions of this Escrow Agreement shall only be brought in a state or
Federal court sitting in New York City, Borough of Manhattan.
2.7. The Escrow Agent's duties hereunder may be altered, amended, modified
or revoked only by a writing signed by the Company, each Purchaser and the
Escrow Agent.
2.8. The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith and in the absence of gross negligence, fraud and willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law shall be conclusive evidence of
such good faith, in the absence of gross negligence, fraud and willful
misconduct.
2.9. The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
2.10. The Escrow Agent shall not be liable in any respect on account of
the identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder in the absence of gross negligence,
fraud and willful misconduct.
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2.11. The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor which shall be paid by the Escrow Agent. The Escrow Agent
has acted as legal counsel for 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
waives 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.
2.12. The Escrow Agent's responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by giving written notice to the
Company and the 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.
2.13. If the Escrow Agent reasonably requires other or further instruments
in connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
2.14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds 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 funds 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 funds 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.
2.15. The Company and each Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Purchase
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence, fraud or
willful misconduct of the Escrow Agent.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO ESCROW AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
this 7th day of September, 2006.
Gas Investment China Co., Ltd.
By:
------------------------------------------
Name:
Title:
ESCROW AGENT:
Kramer Levin Naftalis & Frankel LLP
By:
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Name:
Title:
[PURCHASERS' SIGNATURE PAGE FOLLOWS]
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[PURCHASER'S SIGNATURE PAGE TO ESCROW AGREEMENT]
Name of Investing Entity:
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Signature of Authorized Signatory of Investing Entity:
-------------------------
Name of Authorized Signatory:
---------------------------
Title of Authorized Signatory:
--------------------------
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Exhibit A to
Escrow Agreement
RELEASE NOTICE
The UNDERSIGNED, pursuant to the Escrow Agreement dated as of September 7,
2006 among the Company, the Purchasers signatory thereto and Kramer Levin
Naftalis & Frankel LLP, as Escrow Agent (the "Escrow Agreement"), hereby notify
the Escrow Agent that each of the conditions precedent to the purchase and sale
of the Securities have been satisfied or waived in accordance with Article IV of
the Purchase Agreement. The Company hereby confirms that all of its respective
representations and warranties contained in the Purchase Agreement remain true
and correct and authorize the release by the Escrow Agent of the funds to be
released as described in the Escrow Agreement and as set forth below. This
Release Notice shall not be effective until executed by the Company and Vision.
Capitalized terms used herein and not defined shall have the meaning
ascribed to such terms in the Escrow Agreement.
This Release Notice may be signed in one or more counterparts, each of
which shall be deemed an original.
Please release the $ that has been deposited in the escrow
------------
account pursuant to the Escrow Agreement according to the following
instructions:
[to be completed]
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IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be
duly executed and delivered as of this 7th day of September, 2006.
Gas Investment China Co., Ltd.
By:
------------------------------------------
Name:
Title:
ESCROW AGENT:
Kramer Levin Naftalis & Frankel LLP
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
Vision Opportunity Master Fund, Ltd.
By:
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Name:
Title:
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