Unassociated Document


    


    HOLDBACK
      ESCROW AGREEMENT

     

    This
      Holdback Escrow Agreement, dated as of December 31, 2007 (this “Agreement”),
      is
entered
      into by and among Energroup
      Holdings Corporation, a Nevada corporation
      (the
“Company”),
      the
      investors set forth on Exhibit
      A
      signatory hereto (the “Investors”),
      and
U.S.
      Bank
      National Association, with an office at
      225 Asylum Street, 23rd Floor,
      Hartford, CT 06103
      (the
“Escrow
      Agent”).
      The
      Company is sometimes referred to herein as the Escrowing Party.
      The Company and Investors are referred to collectively as the “Interested
      Parties.”

     

    WITNESSETH:
      

     

    WHEREAS,
      the Company proposes
      to make a private offering to the Investors
      (the
“Offering”)
      of the
      Company’s common stock, par value $0.001 per share,
      in
      reliance upon available exemptions from the registration requirements
      of the U.S. Securities Act of 1933, as amended and pursuant to that
      certain Securities Purchase Agreement, dated as of the date hereof, by and
      among
      the Company, the Investors and certain other parties signatory thereto
      (the
      “Securities
      Purchase Agreement”),
      in an
      aggregate amount of approximately Sixteen
      Million Nine Hundred Twenty-Five Thousand U.S. Dollars
      ($16,925,000);

     

    WHEREAS,
      the Investors have agreed to deposit at the closing of the transactions
      contemplated by the Securities Purchase Agreement (the “Closing”)
      an
      aggregate of $4,250,000 of the proceeds received
      from subscriptions made by the Investors in the Offering, as
      more
      fully specified in this Agreement (the “Escrowed
      Funds”),
      and
      $12,675,000 of said proceeds (the “Closing
      Funds”)
      with
      the Escrow Agent, to be held in escrow
      and administered and distributed as described in Section 4.12 of the Securities
      Purchase Agreement and Section 3 of this Agreement;

     

    WHEREAS,
      Escrow Agent is willing to hold the Escrowed Funds in escrow subject
      to the terms and conditions of this Agreement;

     

    WHEREAS,
      in contemplation of, and as a material inducement for the Investors to
      enter
      into the Securities Purchase Agreement, the Company and Escrow Agent have each
      agreed to execute and deliver this Agreement; and

     

    WHEREAS,
      capitalized terms used but not otherwise defined herein shall have the
      respective meanings given to such terms in the Securities Purchase
      Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises herein contained and
      intending to be legally bound, the parties hereby agree as follows:

     

    1. Appointment
      of Escrow Agent.
      The
      Company hereby appoints Escrow Agent as escrow
      agent in accordance with the terms and conditions set forth herein and the
      Escrow Agent
      hereby accepts such appointment.

     

    
      
        
        

      

      
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    2. Deposit
      of Escrow Funds.
      On or
      prior to the date of Closing, the Investors shall deposit with the Escrow Agent
      in immediately available funds the amount of (i) US $4,250,000 (the
“Escrow
      Funds”)
      and
      (ii) US $12,675,000 (the “Closing
      Funds”),
      ((i)
      and (ii), together with any investment income or proceeds received by the Escrow
      Agent from the investment thereof from time to time pursuant to Section 4 below,
      collectively, the “Escrow
      Property”),
      and
      the Escrow Agent agrees to hold the Escrow Property in an account established
      with the Escrow Agent (the “Escrow Account”), and to administer the Escrow
      Property in accordance with the terms of this Agreement.

    


    3. Escrow
      Agent to Hold and Disburse Escrowed Funds.
      Promptly following the Closing, the Escrow Agent will provide written notice
      to
      the Company (for simultaneous distribution to the Investors) that the Escrow
      Agent has received the entire amount of Escrowed Funds in the Escrow Account.
      The Escrow Agent shall, on the Closing date, disburse the Closing Funds (less
      the Escrow Agent’s fees under Section 6), via wire transfer to the parties and
      their corresponding bank accounts as set forth in a Closing disbursement letter
      in the form attached as Exhibit
      D
      attached
      hereto and executed by a Majority in Interest of the Investors and the Company.
      

    


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

     

    3.1 Board
      Holdback Escrow.
      Pursuant to Section 4.14(a) of the Securities Purchase Agreement, the Company
      has undertaken that
      no
      later than 120 days following the Closing Date, the Board of Directors of the
      Company shall be comprised of a minimum of six members, a majority of which
      shall be “independent directors” as such term is defined in NASDAQ Marketplace
      Rule 4200(a)(15). Accordingly, $2,000,000
      (the
      “Board
      Holdback Escrow
      Amount”)
      of the
      Escrowed Funds is to be held in the Escrow Account subject to the satisfaction
      of the Company’s obligations under Section 4.14(a) of the Securities Purchase
      Agreement. Upon the Company’s satisfaction of the aforesaid obligations in this
      Section 3.1 and Section 4.14(a) of the Securities Purchase Agreement, the
      Company and Investors that have invested at least a majority of the total
      Investment Amount under the Securities Purchase Agreement (a “Majority in
      Interest of the Investors”) shall execute and deliver written instructions with
      reference to this Section 3.1 to release the Board Holdback Escrow Amount to
      the
      Company (“Instructions
      to Release Board Holdback”).
      The
      Escrow Agent shall, upon receipt of Instructions to Release Board Holdback
      jointly executed by the Company and a Majority in Interest of the Investors,
      pay
      the Board Holdback Escrow Amount in accordance with such written instructions,
      such payment or payments to be made by wire transfer within one (1) business
      day
      of receipt of such written instructions.

     

    
      
        
        

      

      
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    3.2 CFO
      Holdback Escrow.
      Pursuant
      to Section 4.14(b) of the Securities Purchase Agreement, the Company has
      undertaken that no later than 90
      days
      following the Closing Date, the Company will hire a chief financial officer
      who
      is a
      certified public accountant or possesses experience such that he or she can
      reasonably serve as a chief financial officer, fluent in English, and
who
      has a
      working familiarity with
      (i) US
      GAAP and (ii) auditing procedures and compliance for United States public
      companies.
      The
      Company shall enter into an employment agreement with the CFO for a term of
      no
      less than two years. Accordingly,
      $1,500,000
      (the
      “CFO
      Holdback Escrow
      Amount”)
      of the
      Escrowed Funds is to be held in the Escrow Account subject to the satisfaction
      of the Company’s obligations under Section 4.14(b) of the Securities Purchase
      Agreement. Upon the Company’s satisfaction of the aforesaid obligations in this
      Section 3.2 and Section 4.14(b) of the Securities Purchase Agreement, the
      Company and a Majority in Interest of the Investors shall execute and deliver
      written instructions with reference to this Section 3.2 to release the CFO
      Holdback Escrow Amount to the Company (“Instructions
      to Release CFO Holdback”).
      The
      Escrow Agent shall, upon receipt of Instructions to Release CFO Holdback jointly
      executed by the Company and a Majority in Interest of the Investors, pay the
      CFO
      Holdback Escrow Amount in accordance with such written instructions, such
      payment or payments to be made by wire transfer within one (1) business day
      of
      receipt of such written instructions. 

     

    3.3 IR
      Holdback Escrow.
      Pursuant to Section 4.14(c) of the Securities Purchase Agreement, the Company
      has undertaken that by the thirtieth day following the Closing Date, the Company
      shall hire either of CCG Elite, Hayden Communications, or Integrated Corporate
      Relations as the Company’s investor relations firm. Accordingly, $250,000
      (the
      “IR
      Holdback Escrow
      Amount”)
      of the
      Escrowed Funds is to be held in the Escrow Account subject to the satisfaction
      of the Company’s obligations under Section 4.14(c) of the Securities Purchase
      Agreement. The
      IR
      Holdback Escrow Amount shall remain in the Escrow Account and shall only be
      released by the Escrow Agent to the Company upon the Escrow Agent’s receipt of
      written notice from the Company and a Majority in Interest of the Investors
      that
      the Company has hired one of the aforementioned investor relations firms and
      then only to the extent that the Company provides evidence of investor relations
      related expenses. From time to time as the Company incurs investor relations
      related expenses, it shall reflect such amount on written instructions with
      reference to this Section 3.3 to release a portion of the IR Holdback Escrow
      Amount to the Company (“Instructions
      to Release IR Holdback”),
      which
      shall specify the dollar amount and payee bank account to which the applicable
      amount shall be transferred. The Escrow Agent shall, upon receipt of
      Instructions to Release IR Holdback (on one or more occasions) jointly executed
      by the Company and a Majority in Interest of the Investors, pay the IR Holdback
      Escrow Amount in accordance with such written instructions, such payment or
      payments to be made by wire transfer within one (1) business day of receipt
      of
      such written instructions.

     

    3.4 Auditing
      Firm Holdback Escrow.
      Pursuant to Section 4.14(d) of the Securities Purchase Agreement, the Company
      has undertaken that no
      later
      than 120 days following the Closing Date, the Company shall hire and retain
      one
      of the following auditing firms as its independent public accountant of record:
      Moore Stephens International, Horwath International, BDO Seidman, LLP, Weinberg
      & Company, or such other auditor as may be agreed between the Company and a
      Majority in Interest of the Investors. Accordingly,
      $500,000
      (the “Audit
      Firm Holdback Escrow Amount”)
      of
      the
      Escrowed Funds
      shall
      remain in the Escrow Account subject to the satisfaction of the Company’s
      obligations under Section 4.14(d) of the Securities Purchase Agreement.
Upon
      the
      Company’s satisfaction of the aforesaid obligations in this Section 3.4 and
      Section 4.14(d) of the Securities Purchase Agreement, the Company and a Majority
      in Interest of the Investors shall execute and deliver written instructions
      with
      reference to this Section 3.4 to release the Audit Firm Holdback Escrow Amount
      to the Company (“Instructions
      to Release Audit Firm Holdback”).
      The
      Escrow Agent shall, upon receipt of Instructions to Release Audit Firm Holdback
      jointly executed by the Company and a Majority in Interest of the Investors,
      pay
      the Audit Firm Holdback Escrow Amount in accordance with such written
      instructions, such payment or payments to be made by wire transfer within one
      (1) business day of receipt of such written instructions. 

     

    
      
        
        

      

      
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    3.5 If
      for
      any or no reason whatsoever, the Escrow Agent does not receive written notice
      from the Company and the Required Investors relating to the release of either
      (i) the Board Holdback Escrow Amount on or prior to 120 calendar days following
      the Closing Date (the “Board
      Compliance Period”)
      or
      (ii) CFO Holdback Escrow Amount on or prior to 90 calendar days following the
      Closing Date (the “CFO
      Compliance Period”)
      (each
      such failure or breach being referred to as an “Event,”
and
      for purposes of this Section the date such Event occurs being referred to as
      “Event
      Date”),
      then
      in addition to any other rights the Investors may have hereunder, under the
      Securities Purchase Agreement or under applicable law, on each such Event Date
      and on each monthly anniversary of such Event Date (if the applicable Event
      shall not have been cured by such date) until the applicable Event is cured,
      the
      Escrow Agent (on behalf of the Company) will deliver and pay to each Investor
      by
      wire transfer an amount in immediately available funds, as partial liquidated
      damages and not as a penalty, equal to 0.5% of the aggregate Investment Amount
      paid by such Investor for Shares pursuant to the Securities Purchase Agreement
      (“Partial
      Liquidated Damages”).
      The
      Partial Liquidated Damages pursuant to the terms hereof shall apply on a daily
      pro-rata basis for any portion of a month prior to the cure of an Event. In
      no
      event will the Company be liable for Partial Liquidated Damages under this
      Agreement in excess of 0.5% of the aggregate Investment Amount of the Investors
      in any 30-day period in respect of any single Event (it being understood that
      if
      the Company suffers an Event relating to its failure to comply with Section
      4.14(a) of the Securities Purchase Agreement and an Event relating to its
      failure to comply with Section 4.14(b) of the Securities Purchase Agreement
      in a
      30-day period it will be responsible for 1% of partial liquidated damages under
      this provision in a 30-day period). It is further understood that partial
      liquidated damages under this Agreement are limited to the Board Holdback Escrow
      Amount as to that Event and the CFO Holdback Escrow Amount as to that Event;
      provided that the Investors are entitled to all other remedies available under
      applicable law. On any Event Date, the Company will deliver to each Investor
      and
      the Escrow Agent a written notice which shall set forth the relevant Event.
      Schedule
      1
      attached
      hereto shall set forth the name, address, Investment Amount and delivery
      instructions for any partial liquidated damages contemplated hereby of each
      Investor.

     

    3.6 In
      the
      event that the Escrow Agent does not timely receive the written notice from
      the
      Company and the Required Investors in accordance with the terms hereof prior
      to
      the expiration of either of the Board Compliance Period and/or the CFO
      Compliance Period, as relevant, the Company hereby irrevocably directs the
      Escrow Agent to automatically, and without any action on the part of the parties
      hereto, disburse the partial liquidated damages applicable to any such Event
      to
      the Investors as contemplated herein until the earlier of (i) such time as
      all
      Escrowed Funds applicable to such Event have been disbursed to the Investors
      or
      (ii) such time as the Escrow Agent receives written notice from the Company
      and
      the Required Investors that the obligations of the Company under the Securities
      Purchase Agreement applicable to such Event have been adequately complied
      with.

    


    
      
        
        

      

      
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    4.
       Investment
      of Funds.
      

     

    a. Investment
      Instructions.
      If the
      Escrow Agent shall have received specific written investment instruction from
      the Company (which shall include instruction as to term to maturity, if
      applicable), on a timely basis, the Escrow Agent shall invest the Escrow
      Property in Eligible Investments, pursuant to and as directed in such
      instruction.

     

    b. Definition
      of Eligible Investments.
      “Eligible Investments” shall mean (i) obligations issued or guaranteed by the
      United States of America or any agency or instrumentality thereof (provided
      that
      the full faith and credit of the United States is pledged in support thereof);
      (ii) repurchase obligations for underlying securities of the type described
      in
      clause (i); (iii) commercial paper at the time of the investment rated A-1
      by
      Standard & Poors Corporation or P-1 by Moody’s Investor Services, Inc.; (iv)
      shares of a money market fund investing only in underlying securities described
      in clauses (i) through (iii) above; (v) obligations (including certificates
      of
      deposit and banker’s acceptances) of any domestic commercial bank having capital
      and surplus in excess of $500,000,000; (vi) investment in the Escrow Agent’s
“Insured Money Market Account” (“IMMA”), as described in Annex A hereto. If
      otherwise qualified, obligations of the Escrow Agent or any of its affiliates
      shall qualify as Eligible Investments. Notwithstanding the foregoing, Eligible
      Investments shall be limited to those instruments readily obtainable and
      routinely offered by the Escrow Agent’s Corporate Trust Services.

     

    c. Escrow
      Agent Not Responsible For Investment Decisions.
      Absent
      its timely receipt of such specific written investment instruction from the
      Company, the Escrow Agent shall have no obligation or duty to invest (or
      otherwise pay interest on) the Escrow Property; provided, however, that in
      the
      event the Escrow Agent shall not have received such written investment
      instruction, the Escrow Agent shall be authorized to invest any of the Escrow
      Property in the Escrow Agent’s “Insured
      Money Market Account” (“IMMA”) until
      such investment instruction is received. All earnings received from the
      investment of the Escrow Property shall be credited to, and shall become a
      part
      of, the Escrow (and any losses on such investments shall be debited to the
      Escrow Account). The Escrow Agent shall have no liability for any investment
      losses, including without limitation any market loss on any investment
      liquidated prior to maturity in order to make a payment required
      hereunder.

     

    d. 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.

     

    
      
        
        

      

      
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    e. Tax
      Reporting.
      The
      Interested Parties agree that, for tax reporting purposes, the Company shall
      be
      treated as the owner of the Escrow Fund, in accordance with Proposed Treasury
      Regulations §1.468B-8 for federal and state tax purposes while it is held by the
      Escrow Agent, and the Escrow Agent shall, for each calendar year (or portion
      thereof) for which the Escrow Fund is so held report the interest earned on
      the
      Escrow Amount on Internal Revenue Service Form 1099 and corresponding state
      income tax forms in accordance with applicable law and regulations.

     

    The
      Interested Parties agree that, for tax reporting purposes, any distribution
      from
      the Escrow Fund to the Investors shall be reportable as a return of investment
      and will be reported on Internal Revenue Service Form 1099B for the tax year
      in
      which the distribution is made. 

     

    f. Certification
      of Taxpayer Identification Number.
      Each of
      the Interested Parties 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 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 Agreement.

     

    5. Concerning
      the Escrow Agent.
      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 Securities Purchase Agreement), 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 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 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 or duty 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. 

     

    
      
        
        

      

      
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    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 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.

     

    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
      Agreement.

     

    The
      Escrow Agent is hereby authorized, in making or disposing of any investment
      permitted by this 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.

     

    Notwithstanding
      any term appearing in this 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 Agreement in good form, or (ii) passage of the
      applicable time period (or both, as applicable under the terms of this
      Agreement), as the case may be.

     

    Unless
      and except to the extent otherwise expressly set forth herein, all deposits
      and
      payments hereunder, or pursuant to the terms hereof (including without
      limitation all payments to the Escrow Agent pursuant to Section 6,
      shall be
      in U.S. dollars.

     

    6. Compensation,
      Expense Reimbursement and Indemnification.

     

    The
      Company hereby agrees to be the responsible party for payment of the Escrow
      Agent’s fees and expenses hereunder. Notwithstanding the foregoing, each of the
      Interested Parties agrees, jointly and severally (i) to pay or reimburse the
      Escrow Agent for its attorney’s fees and expenses incurred in connection with
      the preparation of this 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.

     

    
      
        
        

      

      
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    The
      Company hereby agrees to reimburse the Escrow Agent on demand for all costs
      and
      expenses incurred in connection with the administration of this 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
      without limitation, payment of any legal fees and expenses incurred by the
      Escrow Agent in connection with resolution of any claim by any party
      hereunder.

     

    The
      Company covenants and agrees 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
      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
      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 Agreement.

     

    7. Resignation.
      The
      Escrow Agent may at any time resign as Escrow Agent hereunder by giving thirty
      (30) days’ prior written notice of resignation to the Company and the Investors.
      Prior to the effective date of the resignation as specified in such notice,
      the
      Company will issue to the Escrow Agent a written instruction authorizing
      redelivery of the Escrow Property to a bank or trust company that it selects
      as
      successor to the Escrow Agent hereunder subject to the consent of the Investors
      (which consent shall not be unreasonably withheld or delayed). If, however,
      the
      Company and Investors shall fail to select and consent to such a successor
      escrow agent within twenty (20) days after the notice of resignation from the
      Escrow Agent, the Escrow Agent shall be entitled to name such successor escrow
      agent, or the Escrow Agent may apply to a court of competent jurisdiction for
      appointment of a successor escrow agent.

     

    8. 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.

     

    
      
        
        

      

      
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    9. Consent
      to Jurisdiction and Service.
      Each of
      the Interested Parties hereby absolutely and irrevocably consents and submits
      to
      the jurisdiction of the courts in the State of Connecticut and of any Federal
      court located in said state in connection with any actions or proceedings
      brought against the Interested 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 Interested Parties 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 12 hereof.

     

    10. Waiver
      of Jury Trial.
      THE
      ESCROW AGENT AND THE INTERESTED 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.

     

    11. 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, epidemics,
      governmental regulations superimposed after the fact, fire, communication line
      failures, computer viruses, power failures, earthquakes or other
      disasters.

     

    12. Notices;
      Wiring Instructions.

     

    a. Notice
      Addresses.
      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.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              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: 

            	
              U.S.
                Bank National Association

            
	 	
              Asylum Street, 23rd Floor

            
	 	
              Hartford, CT  06103

            
	 	
              Facsimile:
                (866) 350-2126

            
	 	
              Attn:
                Arthur L. Blakeslee

            


    

     

    b. 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 12(a) above):

     

    If
      to
      the Investors:

     

    To
      the
      accounts set forth on the signature pages hereto. 

     

    If
      to
      the Company:
      

     

    
      	 	
              Bank:
                [name,
                city, state]

            	 
	 	
              ABA #: 

            	 	 
	 	
              Acct. #: 

            	 	 


    

    
      	 	
              Attn:
                

            	 	 


    

    
      	 	
              Ref:
                

            	 	 


    

     

    
      	 	
              If
                to the Escrow Agent:

            	 
	 	 	 
	 	
              Bank: U.S.
                Bank National Association

            	 
	 	
              ABA
                : 091000022

            	 
	 	
              BNF: U.S.
                Bank Trust N.A.

              A/C:
                173103321050

            	 
	 	
              OBI:
                Corporate Trust Services

            	 
	 	
              Ref:
                Energroup
                Holdings Corp.

              Attn:
                Chitra Burju

            	 


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13. Miscellaneous.
      

     

    a. Binding
      Effect; Successors.
      This
      Agreement shall be binding upon the respective parties hereto and their heirs,
      executors, successors and assigns. If the Escrow Agent consolidates, merges
      or
      converts into, or transfers all or substantially all of its corporate trust
      business (including the escrow contemplated by this Agreement) to, another
      corporation, the successor corporation without any further act shall be the
      successor Escrow Agent.

     

    b. Modifications.
      This
      Agreement may not be altered or modified without the express written consent
      of
      the parties hereto. No course of conduct shall constitute a waiver of any of
      the
      terms and conditions of this Escrow Agreement, unless such waiver is specified
      in writing, and then only to the extent so specified. A waiver of any of the
      terms and conditions of this Escrow Agreement on one occasion shall not
      constitute a waiver of the other terms of this Escrow Agreement, or of such
      terms and conditions on any other occasion. Notwithstanding any other provision
      hereof, consent to an alteration or modification of this Agreement may not
      be
      signed by means of an e-mail address. 

     

    c. Governing
      Law.
      THIS
      ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      INTERNAL LAWS OF THE STATE OF NEW YORK.

     

    d. Reproduction
      of Documents.
      This
      Agreement and all documents relating thereto, including, without limitation,
      (a)
      consents, waivers and modifications which may hereafter be executed, and (b)
      certificates and other information previously or hereafter furnished, may be
      reproduced by any photographic, photostatic, microfilm, optical disk,
      micro-card, miniature photographic or other similar process. The parties agree
      that any such reproduction shall be admissible in evidence as the original
      itself in any judicial or administrative proceeding, whether or not the original
      is in existence and whether or not such reproduction was made by a party in
      the
      regular course of business, and that any enlargement, facsimile or further
      reproduction of such reproduction shall likewise be admissible in
      evidence.

     

    e. Counterparts
      and Facsimile Execution.
      This
      Escrow Agreement may be executed in several counterparts, each of which shall
      be
      deemed to be one and the same instrument. The exchange of copies of this
      Agreement and of signature pages by facsimile transmission shall constitute
      effective execution and delivery of this Agreement as to the parties and may
      be
      used in lieu of the original Agreement for all purposes. Signatures of the
      parties transmitted by facsimile shall be deemed to be their original signatures
      for all purposes.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    f. 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.

     

    [Signature
      Page to Follow]

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Holdback Escrow 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

            


    

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK -

    SIGNATURE
      PAGE FOR OTHER PARTIES FOLLOWS]

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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

            


    

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK -

    SIGNATURE
      PAGE FOR OTHER PARTIES FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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: