LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT (the "Agreement")
is
made and entered into on December 31, 2007 between the stockholders set forth
on
the signature page to this Agreement (each, a "Holder")
and
Energroup
Holdings Corporation, a Nevada corporation
(the
"Company").
RECITALS
A. The
Company has determined that it is advisable and in its best interest to enter
into that certain Securities Purchase Agreement, dated December 31, 2007 (the
"Purchase
Agreement")
with
the Investors named therein (the "Investors")
and
certain other parties named therein, pursuant to which the Company will issue
and sell in a private offering securities of the Company (the "Offering").
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement will have the meanings given such terms in the Purchase
Agreement.
B. In
connection with the Offering, the Company has agreed to provide the Investors
certain registration rights, and in furtherance thereof has agreed to file
a
registration statement to enable the Investors to resell certain of the
securities subject of the Offering.
C. It
is a
condition to the Investors' respective obligations to close under the Purchase
Agreement and provide the financing contemplating by the Offering that the
Holder execute and deliver to the Company this Agreement.
D. In
contemplation of, and as a material inducement for the Investors to enter into,
the Purchase Agreement, the Holder and the Company have each agreed to execute
and deliver this Agreement.
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements
set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. Effectiveness
of Agreement.
This
Agreement shall become null and void if the Purchase Agreement is terminated
prior to its Closing as to all Investors.
2. Representations
and Warranties.
Each of
the parties hereto, by their respective execution and delivery of this
Agreement, hereby represents and warrants to the others and to all third party
beneficiaries of this Agreement that (a) such party has the full right, capacity
and authority to enter into, deliver and perform its respective obligations
under this Agreement, (b) this Agreement has been duly executed and delivered
by
such party and is the binding and enforceable obligation of such party,
enforceable against such party in accordance with the terms of this Agreement
and (c) the execution, delivery and performance of such party’s obligations
under this Agreement will not conflict with or breach the terms of any other
agreement, contract, commitment or understanding to which such party is a party
or to which the assets or securities of such party are bound.
3. Beneficial
Ownership.
Holder
hereby represents and warrants that it does not beneficially own (as determined
in accordance with Section 13(d) of the Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder) any shares of Common Stock,
or
any economic interest therein or derivative therefrom, other than those shares
of Common Stock specified on its signature page to this Agreement. For purposes
of this Agreement the shares of Common Stock beneficially owned by such Holder
as specified on its signature page to this Agreement are collectively referred
to as the “Holder’s
Shares.”
4. Lockup.
From
and after the date of this Agreement and through and including the earliest
to
occur of (a) such time as all of the Registrable Securities covered by such
Registration Statement have been publicly sold by the Holders of the Registrable
Securities included therein, (b) nine months after such time as all of the
Registrable Securities covered by such Registration Statement may be sold by
the
Holders without volume restrictions pursuant to Rule 144, or (c) the one year
anniversary of the Effective Date of the Registration Statement resulting in
all
Registrable Securities being registered for resale in accordance with the terms
and conditions of the Registration Rights Agreement (plus one additional day
for
each Trading Day following the Effective Date of any Registration Statement
during which either (1) the Registration Statement is not effective or
(2) the prospectus forming a portion of the Registration Statement is not
available for the resale of all Registrable Securities (as defined in the
Registration Rights Agreement) required to be covered thereby) (the
"Lockup
Period"),
the
Holder irrevocably agrees it will not offer, pledge, encumber, 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 its
Holder’s Shares (including any securities convertible into, or exchangeable for,
or representing the rights to receive, Holder’s Shares). In furtherance thereof,
the Company will (x) place a stop order with the Transfer Agent on all Holder’s
Shares, including those which are covered by a registration statement, (y)
notify its transfer agent in writing of the stop order and the restrictions
on
such Holder’s Shares under this Agreement and direct the transfer agent not to
process any attempts by the Holder to resell or transfer any Holder’s Shares
under any registration statement, Rule 144 or otherwise in violation of this
Agreement.
5. Third-Party
Beneficiaries.
The
Holder and the Company acknowledge and agree that this Agreement is entered
into
for the benefit of and is enforceable by the Investors and their successors
and
assigns. The Holder and the Company understand and agree that this Agreement
is
a material inducement to the willingness of the Investors to enter into the
Purchase agreement and the transactions contemplated thereunder, that each
of
the Company and the Holder receive benefits as a result of the investment into
the Company by the Investors.
6. No
Additional Fees/Payment.
Other
than the consideration specifically referenced herein, the parties hereto agree
that no fee, payment or additional consideration in any form has been or will
be
paid to the Holder in connection with this Agreement.
7. Enumeration
and Headings.
The
enumeration and headings contained in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction
of
any of the provisions of this Agreement.
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8. Counterparts.
This
Agreement may be executed in facsimile and in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, but all
of
which shall together constitute one and the same agreement.
9. Successors
and Assigns.
This
Agreement and the terms, covenants, provisions and conditions hereof shall
be
binding upon, and shall inure to the benefit of, the respective heirs,
successors and assigns of the parties hereto.
10. Severability.
If any
provision of this Agreement is held to be invalid or unenforceable for any
reason, such provision will be conformed to prevailing law rather than voided,
if possible, in order to achieve the intent of the parties and, in any event,
the remaining provisions of this Agreement shall remain in full force and effect
and shall be binding upon the parties hereto.
11. Amendment.
This
Agreement may not be amended or modified in any manner except by a written
agreement executed by each of the parties hereto if and only if such
modification or amendment is consented to in writing by the Investors holding
a
majority in interest of the Common Stock issued or issuable under the Purchase
Agreement.
12. Further
Assurances.
The
Company and the Holder shall each do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all
such other agreements, certificates, instruments and documents, as any Investor
or the Transfer Agent or, in the case of the Holder, the Company may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
13. No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
14. Remedies.
The
Company and the Investors shall have the right to specifically enforce all
of
the obligations of the Holder under this Agreement (without posting a bond
or
other security), in addition to recovering damages by reason of any breach
of
any provision of this Agreement and to exercise all other rights granted by
law.
Furthermore, each of the Company and the Holder recognize that if it fails
to
perform, observe, or discharge any of its obligations under this Agreement,
any
remedy at law may prove to be inadequate relief to the Company or the Investors.
Therefore, the Holder agrees that each of the Company and the Investors shall
be
entitled to seek temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages and without posting a bond
or
other security.
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15. Governing
Law.
The
terms and provisions of this Agreement shall be construed in accordance with
the
laws of the State of New York and the federal laws of the United States of
America applicable therein. Each party agrees for its benefit and the benefit
of
the Investors (who are third party beneficiaries to the obligations of the
Company and the Holder contained in this Agreement and this Section) as follows:
(a) All Proceedings concerning the interpretations, enforcement and defense
of
the transactions contemplated by this Agreement shall be commenced exclusively
in the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. (b) Each of the Company and
the
Holder hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in
any way any right to serve process in any manner permitted by law. (c) Each
of
the Company and the Holder hereby irrevocably waive, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. (d) If any party or any Investor shall commence a
Proceeding to enforce any provisions of this Agreement, then the prevailing
party in such Proceeding shall be reimbursed by the other party (and in the
case
of an Investor bringing such a Proceeding, the Company and the Holder shall
jointly and severally reimburse the Investor) for its reasonable attorneys’ fees
and other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement as of
the
day and year first above written.
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SHINE
GOLD HOLDINGS LIMITED
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Xxxxx
Xxxx, Director
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Address:
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00/X,
Xxxxxx Xxxxxx
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00
Xxxxx’x Xxxx
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Xxxxxxx,
Xxxx Xxxx SAR
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Facsimile:
x00 000 0000 0000
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Xxxxx
Xxxx, as Trustee and sole shareholder of Shine Gold Holdings Limited,
on
behalf of Shi Jing, Ma Fengqin and Shi Huashan
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ENERGROUP
HOLDINGS CORPORATION
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Shi
Huashan, Chief Executive Officer
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