Unassociated Document


     

    MAKE
      GOOD ESCROW AGREEMENT 

     

    This
      Make
      Good Escrow Agreement (the “Make Good Agreement”), dated effective as of
      December 31, 2007, is entered into by and among Energroup
      Holdings Corporation, a Nevada corporation
      (the
“Company”), the Investors (as defined below), Shine Gold Holdings Limited, a
      British Virgin Islands company (“Make Good Pledgor”) and U.S. Bank National
      Association, with an office at 225  Asylum Street, 23rd Floor,
      Hartford, CT  06103, as escrow agent (“Escrow Agent”). The
      Company and Investors are referred to collectively as the “Interested
      Parties.”

     

    WHEREAS,
      each of the investors in the private offering of securities of the Company
      (the
“Investors”) has entered into a Securities Purchase Agreement, dated December
      31, 2007 (the “SPA”), evidencing their participation in the Company's private
      offering (the “Offering”) of securities. As an inducement to the Investors to
      participate in the Offering and as set forth in the SPA, Make Good Pledgor
      agreed to place certain shares of the Company’s common stock, par value $0.001
      per share (the “Common Stock”) into escrow for the benefit of the Investors in
      the event the Company fails to satisfy certain financial thresholds.


     

    WHEREAS,
      pursuant to the requirements of the SPA, the Company and Make Good Pledgor
      have
      agreed to establish an escrow on the terms and conditions set forth in this
      Make
      Good Agreement; 

     

    WHEREAS,
      the Escrow Agent has agreed to act as escrow agent pursuant to the terms and
      conditions of this Make Good Agreement; and 

     

    WHEREAS,
      all capitalized terms used but not defined herein shall have the meanings
      assigned them in the SPA; 

     

    NOW,
      THEREFORE, in consideration of the mutual promises of the parties and the terms
      and conditions hereof, the parties hereby agree as follows: 

     

    1.
      Appointment of Escrow Agent.
      Make
      Good Pledgor and the Company hereby appoint Escrow Agent to act in accordance
      with the terms and conditions set forth in this Make Good Agreement, and Escrow
      Agent hereby accepts such appointment and agrees to act in accordance with
      such
      terms and conditions. 

     

    2.
      Establishment of Escrow.
      Within
      three Trading Days (defined below) following
      the Closing, Make Good Pledgor shall deliver, or cause to be delivered, to
      the
      Escrow Agent certificates evidencing an aggregate of 3,863,635 shares
      of
      the Company’s Common Stock (the “Escrow Shares”), along with bank signature
      stamped stock powers executed in blank (or such other signed instrument of
      transfer acceptable to the Company’s Transfer Agent). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    As
      used
      in this Agreement, “Trading Day” means (i) a day on which the Company’s common
      stock is traded on a Trading Market or (ii) if the common stock is not quoted
      on
      any trading market, a day on which the common stock is quoted in the
      over-the-counter market as reported by the OTC Bulletin Board (or any similar
      organization or agency succeeding to its functions of reporting prices);
      provided, that in the event that the common stock is not listed or quoted as
      set
      forth in (i) and (ii) hereof, then Trading Day shall mean a business day.
“Trading Market” means whichever of the New York Stock Exchange, the American
      Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market,
      the
      NASDAQ Capital Market or OTC Bulletin Board on which the Company’s common stock
      is listed or quoted for trading on the date in question. As used in this Make
      Good Agreement, “Transfer Agent” means Western States Transfer & Registrar,
      Inc. with an address at 1911 Ryan Park Avenue, Sandy, Utah 84092, at telephone
      number (801) 523-1547 and fax number (801) 523-8947, or such other entity
      hereafter retained by the Company as its stock transfer agent as specified
      in a
      writing from the Company to the Escrow Agent. 

     

    The
      Make
      Good Pledgor hereby agrees that their obligation to transfer shares of Common
      Stock to Investors pursuant to Section 4.11 of the SPA and this Make Good
      Agreement shall continue to run to the benefit of each Investor even if such
      Investor shall have transferred or sold all or any portion of its Shares, and
      that Investors shall have the right to assign its rights to receive all or
      any
      such shares of Common Stock to other Persons in conjunction with negotiated
      sales or transfers of any of its Shares. The Make Good Pledgor hereby
      irrevocably agrees that other than in accordance with Section 4.11 of the SPA
      and this Make Good Agreement, the Make Good Pledgor will not offer, pledge,
      sell, contract to sell, sell any option or contract to purchase, purchase any
      option or contract to sell, grant any option, right or warrant to purchase
      or
      otherwise transfer or dispose of, directly or indirectly, or announce the
      offering of any of the Escrow Shares (including any securities convertible
      into,
      or exchangeable for, or representing the rights to receive Escrow Shares).
      In
      furtherance thereof, the Company will (x) place a stop order on all Escrow
      Shares covered by any registration statements, (y) notify the Transfer Agent
      in
      writing of the stop order and the restrictions on such Escrow Shares under
      this
      Make Good Agreement and direct the Transfer Agent not to process any attempts
      by
      the Make Good Pledgor to resell or transfer any Escrow Shares under such
      registration statements or otherwise in violation of Section 4.11 of the SPA
      and
      this Make Good Agreement. If within ten (10) days following the Closing,
the
      Make
      Good Pledgor shall
      not
      have deposited all potential 2008 Make Good Shares and 2009 Make Good Shares
      into escrow in accordance with this Make Good Agreement along with bank
      signature stamped stock powers executed in blank (or such other signed
      instrument of transfer acceptable to the Company’s transfer agent), then, upon
      written demand from an Investor, the Company shall promptly, and in any event
      within thirty (30) days from the date of such written demand, pay to that
      Investor, as liquidated damages, an amount equal to that Investor’s entire
      Investment Amount without interest thereon. As a condition to the receipt of
      such payment, the Investor shall return to the Company for cancellation the
      certificates evidencing the Shares acquired by the Investor under the
      SPA.

     

    3. Representations
      of Make Good Pledgor and the Company.
      Make
      Good Pledgor and the Company hereby represent and warrant, severally and not
      jointly, as to itself only, to the Investors as follows: 

     

    a.
       All
      of
      the Escrow Shares are validly issued, fully paid and nonassessable shares of
      the
      Company, and free and clear of all pledges, liens and encumbrances. Upon any
      transfer of Escrow Shares to Investors hereunder, Investors will receive full
      right, title and authority to such shares as holders of Common Stock of the
      Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b.
       Performance
      of this Make Good Agreement and compliance with the provisions hereof will
      not
      violate any provision of any applicable law and will not conflict with or result
      in any breach of any of the terms, conditions or provisions of, or constitute
      a
      default under, or result in the creation or imposition of any lien, charge
      or
      encumbrance upon, any of the properties or assets of Make Good Pledgor pursuant
      to the terms of any indenture, mortgage, deed of trust or other agreement or
      instrument binding upon Make Good Pledgor, other than such breaches, defaults
      or
      liens which would not have a material adverse effect taken as a whole.


     

    4.
      Disbursement of Escrow Shares. The
      Make
      Good Pledgor agrees
      that in
      the
      event that:

     

    a.
      2008
      Make Good Escrow.
      If the
      after tax net income (calculated in accordance with GAAP) reported in the Annual
      Report on Form 10-K or 10-KSB of the Company for the fiscal year ending December
      31, 2008, as filed with the Commission (the “2008 Annual Report”), is less than
      $15,900,000 (the “2008 Guaranteed ATNI”), the
      Make
      Good Pledgor will
      provide
      written instruction to the Escrow Agent to transfer
      to the Investors on a pro rata basis
      (determined by dividing each Investor’s Investment Amount by the aggregate of
      all Investment Amounts delivered to the Company by the Investors under the
      SPA)
      for no consideration other than payment of their respective Investment Amount
      paid at Closing,
      1,931,818 shares of Common Stock (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions)
      (the
“2008 Make Good Shares”). 

     

    b.
      2009
      Make Good Escrow.
      If
      in
      the
      event that either: 

     

       (i)
       the
      earnings per share (calculated in accordance with GAAP) reported in the Annual
      Report on Form 10-K or 10-KSB of the Company for the fiscal year ending December
      31, 2009, as filed with the Commission (the “2009 Annual Report”), is less than
      $0.99 on a fully diluted basis (as equitably adjusted for any stock splits,
      stock combinations, stock dividends or similar transactions) (the “2009
      Guaranteed EPS”), or 

     

       (ii)
       the
      after
      tax net income (calculated in accordance with GAAP) reported in the 2009 Annual
      Report, is less than $20,900,000
      (the
“2009 Guaranteed ATNI”), 

     

    the
      Make
      Good
      Pledgor
      will
      provide written instruction to the Escrow Agent to transfer to the Investors
      on
      a pro rata basis (determined by dividing each Investor’s Investment Amount by
      the aggregate of all Investment Amounts delivered to the Company by the
      Investors under the SPA) for no consideration other than payment of their
      respective Investment Amount paid at Closing, 1,931,818 shares of Common Stock
      (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions)
      (the
“2009 Make Good Shares”). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c.
      Notwithstanding the foregoing, the parties agree that for purposes of
      determining whether or not the 2008 Guaranteed ATNI, the 2009 Guaranteed EPS
      or
      the 2009 Guaranteed ATNI have been achieved, the release of the 2008 Make Good
      Shares or the 2009 Make Good Shares to the Make Good Pledgor as a result of
      the
      operation of this Make Good Agreement shall not be deemed to be an expense,
      charge, or other deduction from revenues even though GAAP may require contrary
      treatment. Notwithstanding
      anything to the contrary contained herein, any direct or indirect tax breaks,
      tax holidays, tax credits or similar tax benefit(s), compensation, grant or
      any
      other remuneration or deduction granted or benefiting any of the Company
      Entities by any governmental authority or body, which are beyond and in addition
      to benefits that may exist on the Closing date, shall be excluded for
      purposes of determining whether or not the 2008 Guaranteed ATNI, 2009 Guaranteed
      ATNI, or 2009 Guaranteed EPS, as the case may be, has been achieved by
      the Company.
      In
      the
      event that the after tax net income (calculated in accordance with GAAP)
      reported in the 2008 Annual Report, is equal to or greater than the 2008
      Guaranteed ATNI,
      no
      transfer of the 2008 Make Good Shares shall be required by the Make
      Good
      Pledgor
      to the
      Investors under this Section and such 2008 Make Good Shares shall be returned
      to
      the Make
      Good
      Pledgor
      in
      accordance with this Make Good Agreement. 

     

    d.
      In
      the
      event that (i) the earnings per share (calculated in accordance with GAAP)
      reported in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed EPS and (ii) the after tax net income (calculated in accordance
      with
      GAAP) reported in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed ATNI,
      no
      transfer of the 2009 Make Good Shares shall be required by the Make
      Good
      Pledgor
      to the
      Investors under this Section and such 2009 Make Good Shares shall be returned
      to
      the Make
      Good
      Pledgor
      in
      accordance with the Make Good Agreement. 

     

    e.
      Any
      such transfer of the 2008 Make Good Shares or the 2009 Make Good Shares under
      this Section shall be made to the Investors or the Make Good Pledgor, as
      applicable, within 10
      Business
      Days after
      the date
which
      the
      2008
      or 2009, as applicable, Annual Report on Form 10-KSB for the
      Company
      is filed
      with the Commission and otherwise in accordance with this Make Good Agreement.
      

     

    f.
      Escrow
      Rules.
      The
      Escrow Agent shall release the 2008 Make Good Shares and 2009 Make Good Shares
      as follows: 

     

     (i)
      In
      the
      event that the after tax net income (calculated in accordance with GAAP)
      reported in the 2008 Annual Report is less than the 2008 Guaranteed ATNI, the
      Company has agreed that the Company and Investors that have invested a majority
      in interest of the Investment Amount (or their authorized representatives)
      (a
“Majority of Investors”) will jointly provide prompt written instruction to the
      Escrow Agent with regard to the distribution of the 2008 Make Good Shares in
      an
      amount to each Investor as set forth on Exhibit
      A
      attached
      hereto (as determined as set forth above). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     (ii)
      In
      the
      event that either (i) the earnings per share (calculated in accordance with
      GAAP) reported in the 2009 Annual Report is less than the 2009 Guaranteed EPS
      or
      (ii) the after tax net income (calculated in accordance with GAAP) reported
      in
      the 2009 Annual Report is less than the 2009 Guaranteed ATNI, the
      Company has agreed that the Company and Majority of Investors will jointly
      provide prompt written instruction to the Escrow Agent with regard to the
      distribution of the 2009 Make Good Shares in an amount to each Investor as
      set
      forth on Exhibit
      A
      attached
      hereto (as determined as set forth above). 

     

     (iii)
      In
      the
      event that the after tax net income (calculated in accordance with GAAP)
      reported in the 2008 Annual Report is equal to or greater than the 2008
      Guaranteed ATNI, the
      Company has agreed that the Company and Majority of Investors will jointly
      provide prompt written instruction to the Escrow Agent to release of the 2008
      Make Good Shares to the Make Good Pledgor. 

     

     (iv)
      In
      the
      event that (i) the earnings per share (calculated in accordance with GAAP)
      reported in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed EPS and the after tax net income (calculated in accordance with
      GAAP)
      reported in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed ATNI,
      the
      Company has agreed that the Company and Majority of Investors will jointly
      provide prompt written instruction to the Escrow Agent to release of the 2009
      Make Good Shares to the Make Good Pledgor. 

     

    The
      Escrow Agent need only rely on the letter of instruction from the Company and
      Majority of Investors in this regard and notwithstanding anything to the
      contrary contained herein will disregard any contrary instructions, and shall
      not be bound by the time constraints or other trigger dates noted herein.


     

    g. Pursuant
      to Section 4, if the Company and Majority of Investors deliver a written
      instruction pursuant to Section 4(f)(i) or 4(f)(ii) to the Escrow Agent that
      Escrow Shares are to be transferred to the Investors, then the Escrow Agent
      shall immediately forward either the 2008 Make Good Shares or 2009 Make Good
      Shares, as the case may be, to the Company’s Transfer Agent for reissuance to
      the Investors in an amount to each Investor as set forth on Exhibit
      A
      attached
      hereto and otherwise in accordance with this Make Good Agreement. The Company
      covenants and agrees that upon any transfer of 2008 Make Good Shares or 2009
      Make Good Shares to the Investors in accordance with this Make Good Agreement,
      the Company shall promptly instruct its Transfer Agent to reissue such 2008
      Make
      Good Shares or 2009 Make Good Shares in the applicable Investor’s name and
      deliver the same as directed by such Investor in an amount to each Investor
      as
      set forth on Exhibit
      A
      attached
      hereto. If a notice from if the Company and Majority of Investors pursuant
      to
      Section 4 indicates that the Escrow Shares are to be returned to the Make Good
      Pledgor, then the Escrow Agent will promptly deliver either the 2008 Make Good
      Shares or 2009 Make Good Shares, as the case may be, to the Make Good
      Pledgor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    h.
       If
      the
      Company does not provide such instructions to the Transfer Agent of the Company
      to deliver the 2008 Make Good Shares or 2009 Make Good Shares to the Investors
      pursuant to Section 4(g) within 10 days of the public release of the earnings
      and net income for 2008 or 2009 in the Company’s 2008 Annual Report and 2009
      Annual Report, respectively, then a Majority of Investors are hereby authorized
      to deliver such re-issuance instruction to the Transfer Agent of the Company.
      

     

     5.
      Duration.
      This
      Make Good Agreement shall terminate upon the distribution of all the Escrow
      Shares in accordance with the terms of this Make Good Agreement. The Company
      agrees to promptly provide the Escrow Agent written notice of the filing with
      the Commission of any financial statements or reports referenced
      herein.

     

    6.
      Escrow Shares.
      If any
      Escrow Shares are deliverable to the Investors pursuant to the SPA and in
      accordance with this Make Good Agreement, (i) Make Good Pledgor covenants and
      agrees to execute all such instruments of transfer (including stock powers
      and
      assignment documents) as are customarily executed to evidence and consummate
      the
      transfer of the Escrow Shares from Make Good Pledgor to the Investors, to the
      extent not done so in accordance with Section 2, and (ii) following its receipt
      of the documents referenced in Section 6(i), the Company and Escrow Agent
      covenant and agree to cooperate with the Transfer Agent so that the Transfer
      Agent promptly reissues such Escrow Shares in the applicable Investor’s name and
      delivers the same as directed by such Investor. Until such time as (if at all)
      the Escrow Shares are required to be delivered pursuant to the SPA and in
      accordance with this Make Good Agreement, any dividends payable in respect
      of
      the Escrow Shares and all voting rights applicable to the Escrow Shares shall
      be
      retained by Make Good Pledgor. Should the Escrow Agent receive dividends or
      voting materials, such items shall not be held by the Escrow Agent, but shall
      be
      passed immediately on to the Make Good Pledgor and shall not be invested or
      held
      for any time longer than is needed to effectively re-route such items to the
      Make Good Pledgor. In the event that the Escrow Agent receives a
      communication requiring the conversion of the Escrow Shares to cash or
      the exchange of the Escrow Shares for that of an acquiring company, the Escrow
      Agent shall solicit and follow the written instructions of the Make Good
      Pledgor; provided,
      that
      the cash or exchanged shares are instructed to be redeposited into the Escrow
      Account. Make Good Pledgor shall be responsible for all taxes resulting from
      any
      such conversion or exchange.

     

    7.
      Interpleader. 
      Should
      any controversy arise among the parties hereto with respect to this Make Good
      Agreement or with respect to the right to receive the Escrow Shares, Escrow
      Agent, the Company and/or the Investors shall have the right to consult and
      hire
      counsel and/or to institute an appropriate interpleader action to determine
      the
      rights of the parties. Escrow Agent, the Company and/or the Investors are also
      each hereby authorized to institute an appropriate interpleader action upon
      receipt of a written letter of direction executed by the parties so directing
      either Escrow Agent, the Company and/or the Investors. If Escrow Agent, the
      Company and/or the Investors is directed to institute an appropriate
      interpleader action, it shall institute such action not prior to thirty (30)
      days after receipt of such letter of direction and not later than sixty (60)
      days after such date. Any interpleader action instituted in accordance with
      this
      Section 7 shall be filed in any court of competent jurisdiction in the State
      of
      New York, and the Escrow Shares in dispute shall be deposited with the court
      and
      in such event Escrow Agent, the Company and/or the Investors shall be relieved
      of and discharged from any and all obligations and liabilities under and
      pursuant to this Make Good Agreement with respect to the Escrow Shares and
      any
      other obligations hereunder. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8. Certain
      Terms Concerning Escrowed Property. 

     

     a.
      No
      Duty to Vote or Preserve Rights in Escrow Stock.
      Neither
      the Escrow Agent nor its nominee shall be under any duty to take any action
      to
      preserve, protect, exercise or enforce any rights or remedies under or with
      respect to the Escrow Property (including without limitation with respect to
      the
      exercise of any voting or consent rights, conversion or exchange rights, defense
      of title, preservation of rights against prior matters or otherwise).


     

     b.
      Distribution
      Of Escrow Shares.
      Any
      distribution of all or a portion of the Escrow Shares shall be made by delivery
      of the stock certificate held by the Escrow Agent representing the Escrow Shares
      to the Company’s Transfer Agent, endorsed for transfer, with instruction to the
      Transfer Agent to transfer the aggregate number of Escrow Shares being
      distributed in accordance with the instructions to be provided by the Company,
      as described in Section 4(g) hereof, allocated among the Investors based upon
      their pro rata shares according to the percentages set forth on Exhibit
      A
      (as
      nearly as practicable), in each case by issuing to each such Investor a stock
      certificate representing such allocated shares, registered in his or her name
      set forth on Exhibit
      A
      and
      mailed by first class mail to each such Investor’s address set forth on
Exhibit
      A
      (or to
      such other address as such Indemnifying Stockholder may have previously
      instructed the Escrow Agent in writing), or returned to the Make Good Pledgor,
      as applicable. The Escrow Agent shall have no liability for the actions or
      omissions of, or any delay on the part of, the Company, the Transfer Agent,
      the
      Make Good Pledgor or the Investors in connection with the
      foregoing.

     

    c.
      Dividends
      and Proceeds.
      

     

    (i)
      Dividends
      Held In Escrow.
      Any
      dividends, whether cash dividends or stock dividends, stock splits, and any
      other distributions from or under the Escrow Shares, received by the Escrow
      Agent from time to time during the term of this Make Good Agreement shall be
      retained by the Make Good Pledgor. 

     

    (ii) [Reserved.]

     

    (iii) Transaction
      Confirmations.
      The
      parties hereto acknowledge that, to the extent regulations of the Comptroller
      of
      the Currency, or other applicable regulatory entity, grant the parties the
      right
      to receive individual confirmations of security transactions at no additional
      cost, as they occur, the parties specifically waive receipt of such
      confirmations to the extent permitted by law. The Escrow Agent will furnish
      the
      parties hereto with periodic cash transaction statements that include detail
      for
      all investment transactions made by the Escrow Agent hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv) Tax
      Reporting.
      The
      Company, the Make Good Pledgor and the Investors agree that, for tax reporting
      purposes, all interest or other income earned from the investment of the Escrow
      Property shall be reported by the Escrow Agent as allocated to the party to
      whom
      such interest or income is distributed.

     

    (v) Certification
      of Taxpayer Identification Number.
      Each of
      the Company, the Make Good Pledgor and the Investors hereto agrees to provide
      the Escrow Agent with a certified tax identification number by signing and
      returning a Form W-9 (or Form W-8 BEN, in case of non-U.S. persons) to the
      Escrow Agent, upon the execution and delivery of this Make Good Agreement.
      The
      Interested Parties understand that, in the event their tax identification
      numbers are not certified to the Escrow Agent, the Internal Revenue Code, as
      amended from time to time, may require withholding of a portion of any interest
      or other income earned on the investment of the Escrow Property. Each
      of
      the Interested Parties agrees
      to
      instruct the Escrow Agent in writing with respect to the Escrow Agent’s
      responsibility for withholding and other taxes, assessments or other
      governmental charges, and to instruct the Escrow Agent with respect to any
      certifications and governmental reporting that may be required under any laws
      or
      regulations that may be applicable in connection with its acting as Escrow
      Agent
      under this Make Good Agreement.

     

    d.
      Restricted
      Securities.
      The
      Company, Investors and the Make Good Pledgor agree that the Company shall be
      solely responsible for providing, at their cost and expense, any certification,
      opinion of counsel or other instrument or document necessary to comply with
      or
      satisfy any transfer restrictions to which the Escrow Shares are subject,
      including without limitation any opinion of counsel required to be delivered
      pursuant to any restrictive legend appearing on the certificate evidencing
      the
      Escrow Shares in connection with any distribution of Escrow Shares to be made
      by
      the Escrow Agent under or pursuant to this Make Good Agreement. Any such opinion
      of counsel shall include the Escrow Agent as an addressee or shall expressly
      consent to the Escrow Agent’s reliance thereon.

     

    9.
      Concerning the Escrow Agent. 

     

    a. Each
      Interested Party acknowledges and agrees that the Escrow Agent (i) shall not
      be
      responsible for any of the agreements referred to or described herein (including
      without limitation the SPA), or for determining or compelling compliance
      therewith, and shall not otherwise be bound thereby, (ii) shall be obligated
      only for the performance of such duties as are expressly and specifically set
      forth in this Make Good Agreement on its part to be performed, each of which
      is
      ministerial (and shall not be construed to be fiduciary) in nature, and no
      implied duties or obligations of any kind shall be read into this Make Good
      Agreement against or on the part of the Escrow Agent, (iii) shall not be
      obligated to take any legal or other action hereunder which might in its
      judgment involve or cause it to incur any expense or liability unless it shall
      have been furnished with acceptable indemnification, (iv) may rely on and shall
      be protected in acting or refraining from acting upon any written notice,
      instruction (including, without limitation, wire transfer instructions, whether
      incorporated herein or provided in a separate written instruction), instrument,
      statement, certificate, request or other document furnished to it hereunder
      and
      believed by it to be genuine and to have been signed or presented by the proper
      person, and shall have no responsibility to make inquiry as to or to determine
      the genuineness, accuracy or validity thereof (or any signature appearing
      thereon), or of the authority of the person signing or presenting the same,
      and
      (v) may consult counsel satisfactory to it, including in-house counsel, and
      the
      opinion or advice of such counsel in any instance shall be full and complete
      authorization and protection in respect of any action taken, suffered or omitted
      by it hereunder in good faith and in accordance with the opinion or advice
      of
      such counsel. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b. The
      Escrow Agent shall not be liable to anyone for any action taken or omitted
      to be
      taken by it hereunder except in the case of the Escrow Agent’s gross negligence
      or willful misconduct in breach of the terms of this Make Good Agreement. In
      no
      event shall the Escrow Agent be liable for indirect, punitive, special or
      consequential damage or loss (including but not limited to lost profits)
      whatsoever, even if the Escrow Agent has been informed of the likelihood of
      such
      loss or damage and regardless of the form of action.

     

    c. The
      Escrow Agent shall have no more or less responsibility or liability on account
      of any action or omission of any book-entry depository, securities intermediary
      or other subescrow agent employed by the Escrow Agent than any such book-entry
      depository, securities intermediary or other subescrow agent has to the Escrow
      Agent, except to the extent that such action or omission of any book-entry
      depository, securities intermediary or other subescrow agent was caused by
      the
      Escrow Agent’s own gross negligence or willful misconduct in breach of this Make
      Good Agreement.

     

    d. The
      Escrow Agent is hereby authorized, in making or disposing of any investment
      permitted by this Make Good Agreement, or in carrying out any sale of the Escrow
      Property permitted by this Make Good Agreement, to deal with itself (in its
      individual capacity) or with any one or more of its affiliates, whether it
      or
      such affiliate is acting as a subagent of the Escrow Agent or for any third
      person or dealing as principal for its own account.

     

    e. Notwithstanding
      any term appearing in this Make Good Agreement to the contrary, in no instance
      shall the Escrow Agent be required or obligated to distribute any Escrow
      Property (or take other action that may be called for hereunder to be taken
      by
      the Escrow Agent) sooner than two (2) Business Days after (i) it has received
      the applicable documents required under this Make Good Agreement in good form,
      or (ii) passage of the applicable time period (or both, as applicable under
      the
      terms of this Make Good Agreement), as the case may be.

     

    f. All
      payments to the Escrow Agent hereunder shall be in U.S. dollars.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.
      Compensation of Escrow Agent. 

     

    a. The
      Company hereby agrees to be the responsible party for payment of the Escrow
      Agent’s fees and expenses hereunder, including: (i) to pay or reimburse the
      Escrow Agent for its attorney’s fees and expenses incurred in connection with
      the enforcement of this Make Good Agreement, and (ii) to pay the Escrow Agent’s
      compensation for its normal services hereunder in accordance with the fee
      schedule attached hereto as Exhibit
      B
      and made
      a part hereof, which may be subject to change hereafter by the Escrow Agent
      on
      an annual basis.

     

    b. The
      Company agrees to reimburse the Escrow Agent on demand for all costs and
      expenses incurred in connection with the administration of this Make Good
      Agreement or the escrow created hereby or the performance or observance of
      its
      duties hereunder which are in excess of its compensation for normal services
      hereunder, including payment of any reasonable legal fees and expenses incurred
      by the Escrow Agent in connection with resolution of any claim by any party
      hereunder. 

     

    c. Each
      of
      the Company and the Make Good Pledgor covenant and agree, jointly and severally,
      to indemnify the Escrow Agent (and its directors, officers and employees) and
      hold it (and such directors, officers and employees) harmless from and against
      any loss, liability, damage, cost and expense of any nature incurred by the
      Escrow Agent arising out of or in connection with this Make Good Agreement
      or
      with the administration of its duties hereunder, including but not limited
      to
      attorney’s fees,
      tax
      liabilities (other than income tax liabilities associated with the Escrow
      Agent’s fees), any liabilities or damages that may result from any inaccuracy or
      misrepresentation made in any tax certification provided to the Escrow
      Agent,
      and any
      wrongly act of any such party,
      and
      other costs and expenses of defending or preparing to defend
      against any claim of liability unless and except to the extent such loss,
      liability, damage, cost and expense shall be caused by the Escrow Agent’s gross
      negligence, or willful misconduct. The foregoing indemnification and agreement
      to hold harmless shall survive the termination of this Make Good
      Agreement.

     

    11.
      Resignation of Escrow Agent.
      At any
      time, upon twenty (20) days' written notice to the Company, Escrow Agent may
      resign and be discharged from its duties as Escrow Agent hereunder. As soon
      as
      practicable after its resignation, Escrow Agent will promptly turn over to
      a
      successor escrow agent appointed by the Company the Escrow Shares held hereunder
      upon presentation of a document appointing the new escrow agent and evidencing
      its acceptance thereof. If, by the end of the 20-day period following the giving
      of notice of resignation by Escrow Agent, the Company shall have failed to
      appoint a successor escrow agent, a Majority of Investors shall entitled to
      appoint a successor escrow agent, or if no successor is named, the Escrow Agent
      may apply to a court of competent jurisdiction for appointment of a successor
      escrow agent.

     

    12.
      Dispute Resolution.
      It is
      understood and agreed that, should any dispute arise with respect to the
      delivery, ownership, right of possession, and/or disposition of the Escrow
      Property, or should any claim be made upon the Escrow Agent or the Escrow
      Property by a third party, the Escrow Agent upon receipt of notice of such
      dispute or claim is authorized and shall be entitled (at its sole option and
      election) to retain in its possession without liability to anyone, all or any
      of
      the Escrow Property until such dispute shall have been settled either by the
      mutual written agreement of the parties involved or by a final order, decree
      or
      judgment of a court in the United States of America, the time for perfection
      of
      an appeal of such order, decree or judgment having expired. The Escrow Agent
      may, but shall be under no duty whatsoever to, institute or defend any legal
      proceedings which relate to the Escrow Property.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.
      Consent to Jurisdiction and Service.
      Each of
      the Company, the Investors and the Make Good Pledgor hereby absolutely and
      irrevocably consents and submits to the jurisdiction of the courts in the State
      of New York and of any Federal court located in said State in connection with
      any actions or proceedings brought against said parties (or any of them) by
      the
      Escrow Agent arising out of or relating to this Escrow Agreement. In any such
      action or proceeding, the Company, the Investors and the Make Good Pledgor
      each
      hereby absolutely and irrevocably (i) waives any objection to jurisdiction
      or
      venue, (ii) waives personal service of any summons, complaint, declaration
      or
      other process, and (iii) agrees that the service thereof may be made by
      certified or registered first-class mail directed to such party, as the case
      may
      be, at their respective addresses in accordance with Section 17
      hereof.

     

    14.
      Waiver of Jury Trial. THE
      PARTIES HEREBY WAIVE A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION
      OR PROCEEDING BETWEEN THEM OR THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN
      CONNECTION WITH THIS AGREEMENT OR ANY OF ITS PROVISIONS OR ANY NEGOTIATIONS
      IN
      CONNECTION HEREWITH.

     

    15.
      Force Majeure.
      The
      Escrow Agent shall not be responsible for delays or failures in performance
      resulting from acts beyond its control. Such acts shall include but not be
      limited to acts of God, strikes, lockouts, riots, acts of war, terrorism,
      epidemics, governmental regulations superimposed after the fact, fire,
      communication line failures, computer viruses, power failures, earthquakes
      or
      other disasters. 

     

    16.
      Records.
      The
      Escrow Agent shall maintain accurate records of all transactions hereunder.
      The
      Escrow Agent will provide each of the Interested Parties monthly transaction
      statements for the duration of the Escrow, detailing all deposit and withdrawal
      activity, including a final statement at the termination of the Escrow showing
      the final distribution of Escrow Shares. The authorized representatives of
      each
      of the parties hereto shall have access to such books and records at all
      reasonable times during Escrow Agent’s normal business hours upon reasonable
      notice to Escrow Agent and at the requesting party’s expense. 

     

    17.
      Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile (provided the sender receives a machine-generated
      confirmation of successful transmission) at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
      on
      any Trading Day, or (c) upon actual receipt by the party to whom such notice
      is
      required to be given, if sent by any means other than facsimile transmission.
      The address for such notices and communications shall be as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	
                If
                  to the Company:

              	
                Energroup
                  Holdings Corp.

              
	 	
                No.
                  9, Xin Yi Street, Ganjingzi District

              
	 	
                Dalian
                  City, Liaoning Province

              
	 	
                PRC
                  116039

              
	 	
                Facsimile:
                  +86 411 867 166 90

              
	 	
                Attn.:
                  President

              
	 	 
	
                With
                  a copy to:

              	
                Richardson
                  & Patel, LLP

              
	 	
                Murdock
                  Plaza

              
	 	
                10900
                  Wilshire Boulevard, Suite 500

              
	 	
                Los
                  Angeles, California 90024

              
	 	
                Facsimile:
                  (310) 208-1154

              
	 	
                Attn.:
                  Kevin K. Leung, Esq.

              
	 	 
	
                If
                  to an Investor:

              	
                To
                  the address set forth under such Investor’s name

                on
                  the signature pages hereof;

              
	 	 
	
                With
                  a copy to

              	
                Bryan
                  Cave LLP

              
	
                Lead
                  Investor Counsel:

              	
                1290
                  Avenue of the Americas

              
	 	
                New
                  York, New York 10104

              
	 	
                Facsimile:
                  (212) 541-4630

              
	 	
                Attn.:
                  Eric L. Cohen, Esq.

              
	 	 
	
                If
                  to the Escrow Agent: 

              	
                US
                  Bank N.A.

              
	 	
                Asylum Street, 23rd Floor

              
	 	
                Hartford, CT  06103

              
	 	
                Facsimile:
                  (866) 350-2126

              
	 	
                Attn:
                  Arthur L. Blakeslee

              


      

    

     

    or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person. Notwithstanding the foregoing, notices addressed to the Escrow
      Agent shall be effective only upon receipt. If any notice or document is
      required to be delivered to the Escrow Agent and any other person, the Escrow
      Agent may assume without inquiry that each notice or document was received
      by
      such other person when it is received by the Escrow Agent.

     

    18.
      Wiring Instructions. Any
      funds
      to be paid to or by the Escrow Agent hereunder shall be sent by wire transfer
      pursuant to the following instructions (or by such method of payment and
      pursuant to such instruction as may have been given in advance and in writing
      to
      or by the Escrow Agent, as the case may be, in accordance with Section 17
      above):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If
      to
      the Escrow Agent:
      

    

      
        	
                Bank:

              	
                U.S.
                  Bank National Association

              
	
                ABA
                  #:

              	
                091000022

              
	
                A/C#:
                  

              	
                180121167365

              
	
                OBI:

              	
                Corporate
                  Trust

              
	
                Beneficiary:
                  

              	
                U.S.
                  Bank Trust N.A.

              
	
                Reference:

              	
                Shine
                  Gold Holdings Limited

              
	
                Attn:

              	
                Art
                  Blakeslee

              


      

    

     

    19.
      Execution in Counterparts.
      This
      Make Good Agreement may be executed in counterparts, each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. 

     

    20.
      Assignment and Modification.
      This
      Make Good Agreement and the rights and obligations hereunder of any of the
      parties hereto may not be assigned without the prior written consent of the
      other parties hereto. Subject to the foregoing, this Make Good Agreement will
      be
      binding upon and inure to the benefit of each of the parties hereto and their
      respective successors and permitted assigns. No other person will acquire or
      have any rights under, or by virtue of, this Make Good Agreement. No portion
      of
      the Escrow Shares shall be subject to interference or control by any creditor
      of
      any party hereto, or be subject to being taken or reached by any legal or
      equitable process in satisfaction of any debt or other liability of any such
      party hereto prior to the disbursement thereof to such party hereto in
      accordance with the provisions of this Make Good Agreement. This Make Good
      Agreement may be amended or modified only in writing signed by all of the
      parties hereto. 

     

    21.
      Applicable Law.
      This
      Make Good Agreement shall be governed by and construed in accordance with the
      laws of the State of New York without giving effect to the principles of
      conflicts of laws thereof. 

     

    22.
      Headings.
      The
      headings contained in this Make Good Agreement are for convenience of reference
      only and shall not affect the construction of this Make Good Agreement.


     

    23.
      Attorneys' Fees.
      If any
      action at law or in equity, including an action for declaratory relief, is
      brought to enforce or interpret the provisions of this Make Good Agreement,
      the
      prevailing party shall be entitled to recover reasonable attorneys' fees from
      the other party (unless such other party is the Escrow Agent), which fees may
      be
      set by the court in the trial of such action or may be enforced in a separate
      action brought for that purpose, and which fees shall be in addition to any
      other relief that may be awarded.

     

    24.
      Merger or Consolidation.
      Any
      corporation or association into which the Escrow Agent may be converted or
      merged, or with which it may be consolidated, or to which it may sell or
      transfer all or substantially all of its corporate trust business and assets
      as
      a whole or substantially as a whole, or any corporation or association resulting
      from any such conversion, sale, merger, consolidation or transfer to which
      the
      Escrow Agent is a party, shall be and become the successor escrow agent under
      this Make Good Agreement and shall have and succeed to the rights, powers,
      duties, immunities and privileges as its predecessor, without the execution
      or
      filing of any instrument or paper or the performance of any further act.


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    25.
      Customer
      Identification Program.
      Each of
      the Interested Parties acknowledge receipt of the notice set forth on
Exhibit
      C
      attached
      hereto and made part hereof and that information may be requested to verify
      their identities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as
      of
      the date set forth opposite their respective names.

     

    COMPANY:

    


    
      	 	
              ENERGROUP
                HOLDINGS CORP.

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Shi
                Huashan

            
	 	 	
              Chief
                Executive Officer

            


    

     

    
      	 	
              Address:

            	
              No.
                9, Xin Yi Street

            
	 	 	
              Ganjingzi
                District

            
	 	 	
              Dalian
                City, Liaoning Province

            
	 	 	
              PRC
                116039

            
	 	 	 
	 	
              Facsimile:

            	
                  
                +86 411 867 166 90

            
	
              MAKE
                GOOD PLEDGOR:

            	 	 
	 	
              SHINE
                GOLD HOLDINGS LIMITED

            
	 	
               

            
	 	
              Chong
                Shun, Director

            
	 	 	 
	 	
              Address:

            	
              15/F,
                Regent Centre

            
	 	 	
              88
                Queen’s Road

            
	 	 	
              Central,
                Hong Kong SAR

            
	 	 	 
	 	
              Facsimile:

            	
                  
                +86 411 8671 6690

            


    

    


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    ESCROW
      AGENT:

     

    
      	
              U.S.
                BANK NATIONAL ASSOCIATION

            
	 	 
	
              By:

            	 
	 	
              Arthur
                L. Blakeslee

            
	 	
              Vice
                President

            


    

     

    
      	
              Address:
                

            	
              225
                Asylum Street, 23rd Floor

            
	 	
              Hartford,
                CT 06103

            
	 	 
	
              Facsimile:
                

            	
              (866)
                350-2126

            


    

    


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    INVESTORS:

     

    
      	
              ____________________________________

            
	
              Name
                of Investor

            
	 	 
	 	 
	
              By:

            	______________________________ 
	 	
              Name:

            
	 	
              Title:

            
	
              Investment Amount: $______________________

            
	 	 
	
              Tax
                ID No.:

            
	
              ADDRESS
                FOR NOTICE

            
	
              c/o:_________________________________

            
	
              Street:_______________________________

            
	
              City/State/Zip:___________________________

            
	
              Attention:______________________________

            
	
              Tel:_________________________________

            
	
              Fax:_________________________________

            
	
              DELIVERY
                INSTRUCTIONS

            
	
              (if
                different from above)

            
	
              c/o:_________________________________

            
	
              Street:________________________________

            
	
              City/State/Zip:____________________________

            
	
              Attention:______________________________

            
	
              Tel:__________________________________