INDEMNIFICATION ESCROW AGREEMENT


 


This Escrow Agreement
(this “Agreement”) is entered into as of _______ __, 2012 by and between Eastern Resources, Inc., a Delaware corporation
(the “Parent”), Patrick W.M. Imeson (the “Indemnification Representative”) and Gottbetter & Partners,
LLP (the “Escrow Agent”).


 


WHEREAS, the
Parent has entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Elkhorn Goldfields,
LLC, a Delaware limited liability company (the “Seller”), Montana Tunnels Mining, Inc., a Delaware corporation and
wholly-owned subsidiary of Seller (“Company A”) and Elkhorn Goldfields, Inc., a Montana corporation and wholly-owned
subsidiary of Seller (“Company B” and, together with Company A, the “Companies”), (i) pursuant to which
a wholly-owned subsidiary of the Parent will merge with and into Company A, with Company A surviving the merger, and another wholly-owned
subsidiary of the Parent will merge with and into Company B, with Company B surviving the merger, (ii) each Company will become
a wholly-owned subsidiary of the Parent, and (iii) the stockholders of the Companies (the “Company Stockholders”) will
receive shares of common stock of the Parent (the “Merger Shares”);


 


WHEREAS, the
Merger Agreement provides that 95% of the Merger Shares (the “Initial Shares”) to be issued to such Company Stockholders
shall be delivered to such Company Stockholders and 5% of the Merger Shares (the “Escrow Shares”) to be issued to such
Company Stockholders shall be delivered to the Escrow Agent to secure the indemnification obligations of the Company Stockholders
as of the Closing Date, as such term is defined in the Merger Agreement (collectively, the “Indemnifying Stockholders”),
to the Parent; and


 


WHEREAS, the
Merger Agreement provides for the execution of this Agreement and the establishment of an escrow account and the parties hereto
desire to establish the terms and conditions pursuant to which such escrow account will be established and maintained.


 


NOW, THEREFORE,
the parties hereto hereby agree as follows:


 


1.            Escrow
and Indemnification.


 


(a)          Escrow
of Shares. Simultaneously with the execution of this Agreement, the Parent shall cause to be issued and shall deposit with
the Escrow Agent certificates representing an aggregate number of shares of common stock of the Parent, as determined pursuant
to Section 1.8(b) of the Merger Agreement, issued in the name of the Escrow Agent. The shares deposited with the Escrow Agent pursuant
to this Section 1(a) are referred to herein as the “Escrow Shares.” The Escrow Shares shall be held as a trust fund
and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto.
The Escrow Agent agrees to hold the Escrow Shares in an escrow account (the “Escrow Account”), subject to the terms
and conditions of this Agreement.


 


(b)          Indemnification.
The Indemnifying Stockholders have agreed in Section 6.1 of the Merger Agreement to indemnify and hold harmless the Parent from
and against certain Damages (as defined in Section 6.1 of the Merger Agreement). The Escrow Shares shall be (i) security for such
indemnity obligation of the Indemnifying Stockholders, subject to the limitations, and in the manner provided, in this Agreement
and the Merger Agreement and (ii) shall be the exclusive means for the Parent to collect any Damages with respect to which the
Parent is entitled to indemnification under Article VI of the Merger Agreement.


 



    	 



    	 



    

 


(c)          Dividends,
Etc. Any securities distributed in respect of or in exchange for any of the Escrow Shares, whether by way of stock dividends,
stock splits or otherwise, shall be issued in the name of the Escrow Agent or its nominee and shall be delivered to the Escrow
Agent, who shall hold such securities in the Escrow Account. Such securities shall be considered Escrow Shares for purposes hereof.
Any cash dividends or property (other than securities) distributed in respect of the Escrow Shares shall be distributed within
five business days by the Escrow Agent to the Indemnifying Stockholders in accordance with Section 3(c) hereof.


 


(d)          Voting
of Shares. The Indemnification Representative shall have the right, in his sole discretion, on behalf of the Indemnifying Stockholders,
to direct the Escrow Agent in writing as to the exercise of any voting rights pertaining to the Escrow Shares, and the Escrow Agent
shall comply with any such written instructions. In the absence of such instructions, the Escrow Agent shall not vote any of the
Escrow Shares. The Indemnification Representative shall have no obligation to solicit consents or proxies from the Indemnifying
Stockholders for purposes of any such vote.


 


(e)          Transferability.
The respective interests of the Indemnifying Stockholders in the Escrow Shares shall not be assignable or transferable, other than
by operation of law. Notice of any such assignment or transfer by operation of law shall be given to the Escrow Agent and the Parent,
and no such assignment or transfer shall be valid until such notice is given.


 


2.            Intentionally
Omitted.


 


3.            Distribution
of Escrow Shares.


 


(a)          The
Escrow Agent shall distribute the Escrow Shares only in accordance with (i) a written instrument delivered to the Escrow Agent
that is executed by both the Parent and the Indemnification Representative and that instructs the Escrow Agent as to the distribution
of some or all of the Escrow Shares, (ii) an order of a court of competent jurisdiction, a copy of which is delivered to the Escrow
Agent by either the Parent or the Indemnification Representative, that instructs the Escrow Agent as to the distribution of some
or all of the Escrow Shares, or (iii) the provisions of Section 3(b) hereof.


 


(b)          Within
five business days after _________ __, 2014 (the “Termination Date”), the Escrow Agent shall distribute to the Indemnifying
Stockholders all of the Escrow Shares then held in escrow, registered in the names of the Indemnifying Stockholders. Notwithstanding
the foregoing, if the Parent has previously delivered to the Escrow Agent a copy of a Claim Notice (as hereinafter defined) and
the Escrow Agent has not received written notice of the resolution of the claim covered thereby, or if the Parent has previously
delivered to the Escrow Agent a copy of an Expected Claim Notice (as hereinafter defined) and the Escrow Agent has not received
written notice of the resolution of the anticipated claim covered thereby, the Escrow Agent shall retain in escrow after the Termination
Date such number of Escrow Shares as have a Value (as defined in Section 4 below) equal to the Claimed Amount (as hereinafter defined)
covered by such Claim Notice or equal to the estimated amount of Damages set forth in such Expected Claim Notice, as the case may
be. Any Escrow Shares so retained in escrow shall be distributed only in accordance with the terms of clauses (i) or (ii) of Section
3(a) hereof. For purposes of this Agreement, a Claim Notice means a written notification under the Merger Agreement given by the
Parent to the Indemnifying Stockholders which contains (i) a description and the amount (the “Claimed Amount”) of any
Damages incurred or reasonably expected to be incurred by the Parent, (ii) a statement that the Parent is entitled to indemnification
under Article 6 of the Merger Agreement for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand
for payment (in the manner provided in Section 6.3 of the Merger Agreement) in the amount of such Damages. For purposes of this
Agreement, an Expected Claim Notice means a notice delivered pursuant to the Merger Agreement by the Parent to an Indemnifying
Stockholder, before expiration of a representation or warranty, to the effect that, as a result a legal proceeding instituted by
or written claim made by a third party, the Parent reasonably expects to incur Damages as a result of a breach of such representation
or warranty.


 



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(c)          Any
distribution of all or a portion of the Escrow Shares (or cash or other property pursuant to Section 2(c)) to the Indemnifying
Stockholders shall be made by delivery of stock certificates issued in the name of the Indemnifying Stockholders (or cash or other
property), covering such percentage of the Escrow Shares (or cash or other property) being distributed as is calculated in accordance
with the percentages set forth opposite each such Indemnifying Stockholder’s name on Attachment A attached hereto
(which Attachment A shall be updated after the date hereof if the Parent deposits additional Escrow Shares in the Escrow
Account on behalf of additional Company Stockholders after the Closing Date). Distributions to the Indemnifying Stockholders shall
be made by mailing stock certificates to such holders at their respective addresses shown on Attachment A (or such other
address as may be provided in writing to the Escrow Agent by any such Indemnifying Stockholder). No fractional Escrow Shares shall
be distributed to Indemnifying Stockholders pursuant to this Agreement. Instead, the number of shares that each Indemnifying Stockholder
shall receive shall be rounded up or down to the nearest whole number (provided that the Indemnification Representative shall have
the authority to effect such rounding in such a manner that the total number of whole Escrow Shares to be distributed equals the
number of Escrow Shares then held in the Escrow Account).


 


4.            Valuation
of Escrow Shares. For purposes of this Agreement, the “Value” of any Escrow Shares shall be $_.__ per share, multiplied
by the number of such Escrow Shares.


 


5.            Fees
and Expenses of Escrow Agent. The Parent shall pay the $2,500 fee of the Escrow Agent for the services to be rendered by the
Escrow Agent hereunder.


 


6.            Limitation
of Escrow Agent’s Liability.


 


(a)          The
Escrow Agent shall incur no liability with respect to any action taken or suffered by it in reliance upon any notice, direction,
instruction, consent, statement or other documents believed by it to be genuine and duly authorized, nor for other action or inaction
except its own willful misconduct or gross negligence. The Escrow Agent shall not be responsible for the validity or sufficiency
of this Agreement. In all questions arising under the Escrow Agreement, the Escrow Agent may rely on the advice of counsel, and
the Escrow Agent shall not be liable to anyone for anything done, omitted or suffered in good faith by the Escrow Agent based on
such advice. The Escrow Agent shall not be required to take any action hereunder involving any expense unless the payment of such
expense is made or provided for in a manner reasonably satisfactory to it. In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damages.


 



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(b)          The
Parent and the Indemnifying Stockholders agree to indemnify the Escrow Agent for, and hold it harmless against, any loss, liability
or expense incurred without gross negligence or willful misconduct on the part of Escrow Agent, arising out of or in connection
with its carrying out of its duties hereunder. The Parent, on the one hand, and the Indemnifying Stockholders, on the other hand,
shall each be liable for one-half of such amounts.


 


7.            Liability
and Authority of Indemnification Representative; Successors and Assignees.


 


(a)          The
Indemnification Representative shall not incur any liability with respect to any action taken or suffered by him in reliance upon
any note, direction, instruction, consent, statement or other documents believed by him to be genuinely and duly authorized, nor
for other action or inaction except his own willful misconduct or gross negligence. The Indemnification Representative may, in
all questions arising under the Escrow Agreement, rely on the advice of counsel and the Indemnification Representative shall not
be liable to the Indemnifying Stockholders for anything done, omitted or suffered in good faith by the Indemnification Representative
based on such advice.


 


(b)          In
the event of the death or permanent disability of the Indemnification Representative, or his or her resignation or termination
as an Indemnification Representative, a successor Indemnification Representative shall be elected by a majority vote of the Indemnifying
Stockholders, with each such Indemnifying Stockholder (or his, her or its successors or assigns) to be given a vote equal to the
number of votes represented by the shares of stock of the Company held by such Indemnifying Stockholder immediately prior to the
effective time of the Merger Agreement. Each successor Indemnification Representative shall have all of the power, authority, rights
and privileges conferred by this Agreement upon the original Indemnification Representative, and the term “Indemnification
Representative” as used herein shall be deemed to include each successor Indemnification Representative.


 


(c)          The
Indemnification Representative shall have full power and authority to represent the Indemnifying Stockholders, and their successors,
with respect to all matters arising under this Agreement and Article 6 of the Merger Agreement and all actions taken by the Indemnification
Representative hereunder or under Article 6 of the Merger Agreement shall be binding upon the Indemnifying Stockholders, and their
successors, as if expressly confirmed and ratified in writing by each of them. Without limiting the generality of the foregoing,
the Indemnification Representative shall have full power and authority to interpret all of the terms and provisions of this Agreement,
to compromise any claims asserted hereunder and to authorize any release of the Escrow Shares to be made with respect thereto,
on behalf of the Indemnifying Stockholders and their successors.


 


(d)          After
Closing Date, the majority vote of the Indemnifying Stockholders may terminate the Indemnification Representative and appoint a
successor Indemnification Representative in accordance with the terms of Section 7(b) above.


 


(e)          The
Escrow Agent may rely on the Indemnification Representative as the exclusive agent of the Indemnifying Stockholders under this
Agreement and shall incur no liability to any party with respect to any action taken or suffered by it in good faith reliance thereon.


 



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8.            Amounts
Payable by Indemnifying Stockholders. The amounts payable by the Indemnifying Stockholders under this Agreement (i.e., the
indemnification obligations pursuant to Section 6(b)) shall be payable solely as follows. The Escrow Agent shall notify the Indemnification
Representative of any such amount payable by the Indemnifying Stockholders as soon as it becomes aware that any such amount is
payable, with a copy of such notice to the Parent. On the sixth business day after the delivery of such notice, the Escrow Agent
shall sell such number of Escrow Shares (up to the number of Escrow Shares then available in the Escrow Account), subject to compliance
with all applicable securities laws, as is necessary to raise such amount, and shall be entitled to apply the proceeds of such
sale in satisfaction of such indemnification obligations of the Indemnifying Stockholders; provided that if the Indemnification
Representative delivers to the Escrow Agent (with a copy to the Parent), within five business days after delivery of such notice
by the Indemnification Representative, a written notice contesting the legitimacy or reasonableness of such amount, then the Escrow
Agent shall not sell Escrow Shares to raise the disputed portion of such claimed amount except in accordance with the terms of
clauses (i) or (ii) of Section 3(a).


 


9.            Termination.
This Agreement shall terminate upon the distribution by the Escrow Agent of all of the Escrow Shares in accordance with this Agreement;
provided that the provisions of Sections 6 and 7 shall survive such termination.


 


10.          Notices.
All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid,
or (ii) via a reputable nationwide overnight courier service, in each case to the address set forth below. Any such notice, instruction
or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service.


 


If to the Parent: 


______________


______________


Attn:   


Facsimile:  _______________


 


with a copy to (which
shall not constitute notice hereunder):


 


Gottbetter & Partners, LLP


488 Madison Avenue, 12th Floor


New York, NY 10022


Attn:  Adam S. Gottbetter,
Esq. 


Facsimile:  212.400.6901


 


If to the Indemnification Representative:


 


Patrick W.M. Imeson


1610 Wynkoop Street, #400


Denver, CO 80202 


Facsimile:  303.957.5536-


 



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with a copy
to (which shall not constitute notice hereunder):


 


Messner & Reeves, LLC


1430 Wynkoop Street, Suite 400


Denver, CO 80205


Attn: Steven N. Levine, Esq. 


Facsimile: 303.623.0552


 


If to the Escrow Agent:


 


Gottbetter & Partners, LLP


488 Madison Avenue, 12th Floor


New York, NY 10022


Attn:  Adam S. Gottbetter,
Esq. 


Facsimile:  212.400.6901


 


Any party may give any notice, instruction
or communication in connection with this Agreement using any other means (including personal delivery, telecopy or ordinary mail),
but no such notice, instruction or communication shall be deemed to have been delivered unless and until it is actually received
by the party to whom it was sent. Any party may change the address to which notices, instructions or communications are to be delivered
by giving the other parties to this Agreement notice thereof in the manner set forth in this Section 10.


 


11.         Successor
Escrow Agent. In the event the Escrow Agent becomes unavailable or unwilling to continue in its capacity herewith, the Escrow
Agent may resign and be discharged from its duties or obligations hereunder by delivering a resignation to the parties to this
Escrow Agreement, not less than 60 days prior to the date when such resignation shall take effect. The Parent may a successor Escrow
Agent with the consent of the Indemnification Representative, which shall not be unreasonably withheld. If, within such notice
period, the Parent provides to the Escrow Agent written instructions with respect to the appointment of a successor Escrow Agent
and directions for the transfer of any Escrow Shares then held by the Escrow Agent to such successor, the Escrow Agent shall act
in accordance with such instructions and promptly transfer such Escrow Shares to such designated successor. If no successor Escrow
Agent is named as provided in this Section 11 prior to the date on which the resignation of the Escrow Agent is to properly take
effect, the Escrow Agent may apply to a court of competent jurisdiction for appointment of a successor Escrow Agent.


 


12.         General.


 


(a)          Governing
Law; Assigns. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York
without regard to conflict-of-law principles and shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.


 


(b)          Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.


 



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(c)          Entire
Agreement. Except for those provisions of the Merger Agreement referenced herein, this Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter of this Agreement and supersedes all prior agreements or understandings,
written or oral, between the parties with respect to the subject matter hereof.


 


(d)          Waivers.
No waiver by any party hereto of any condition or of any breach of any provision of this Agreement shall be effective unless in
writing. No waiver by any party of any such condition or breach, in any one instance, shall be deemed to be a further or continuing
waiver of any such condition or breach or a waiver of any other condition or breach of any other provision contained herein.


 


(e)          Amendment.
This Agreement may be amended only with the written consent of the Parent, the Escrow Agent and the Indemnification Representative.


 


(f)          Consent
to Jurisdiction and Service. The parties hereby absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the State of New York and of any Federal court located in the State of New York in connection with any actions or proceedings
brought against any party hereto by the Escrow Agent arising out of or relating to this Escrow Agreement. In any such action or
proceeding, the parties hereby absolutely and irrevocably waive personal service of any summons, complaint, declaration or other
process and hereby absolutely and irrevocably agree that the service thereof may be made by certified or registered first-class
mail directed to such party, at their respective addresses in accordance with Section 10 hereof.


 


[signature
page follows]


 



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IN WITNESS WHEREOF,
the parties have duly executed this Agreement as of the day and year first above written.


 


	 	EASTERN RESOURCES, INC.
	 	 
	 	By:	 
	 	Name:	  Thomas H. Hanna
	 	Title:	  President
	 	 	 
	 	 
	 	Patrick W.M. Imeson, Individually and as

Indemnification Representative
	 	 	 
	 	GOTTBETTER & PARTNERS, LLP
	 	 	 
	 	By:	 
	 	Name:	  Adam S. Gottbetter
	 	Title:	  Managing Partner


 



    	 



    	 



    

 


ATTACHMENT A 


(Company Stockholders’ information)


 


	Name	 	 Escrow Shares	 	Address
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	TOTAL Escrow Shares (5%)	 	xxxx