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
000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxx, XX 00000
(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.
1
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.
2
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:
Xxxxx Xxxxxxxx International, Xxxxxxx International, BDO Xxxxxxx, LLP, Xxxxxxxx
& 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.
3
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.
4
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 Xxxxx’x 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.
5
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.
6
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.
7
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.
8
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:
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If
to the Company:
|
|
|
Xx.
0, Xxx Xx Xxxxxx, Xxxxxxxxx Xxxxxxxx
|
|
|
Dalian
City, Liaoning Province
|
|
|
PRC
116039
|
|
|
Facsimile:
x00 000 000 000 00
|
|
|
Attn.:
President
|
|
|
With
a copy to:
|
Xxxxxxxxxx
& Xxxxx, LLP
|
|
Xxxxxxx
Plaza
|
|
|
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
|
|
|
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attn.:
Xxxxx X. Xxxxx, Esq.
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9
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If
to an Investor:
|
To
the address set forth under such Investor’s name on the signature pages
hereof;
|
|
With
a copy to
|
Xxxxx
Xxxx LLP
|
|
Lead
Investor Counsel:
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attn.:
Xxxx X. Xxxxx, Esq.
|
|
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If
to the Escrow Agent:
|
U.S.
Bank National Association
|
|
Xxxxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxxxxxxx, XX 00000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attn:
Xxxxxx X. Xxxxxxxxx
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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
: 000000000
|
||
|
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:
|
By:
|
|
|
Shi
Huashan
|
|
|
Chief
Executive Officer
|
|
|
Address:
|
Xx.
0, Xxx Xx Xxxxxx
|
|
Xxxxxxxxx
Xxxxxxxx
|
|
|
Dalian
City, Liaoning Province
|
|
|
PRC
116039
|
|
|
Facsimile:
|
x00
000 000 000 00
|
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK -
SIGNATURE
PAGE FOR OTHER PARTIES FOLLOWS]
ESCROW
AGENT:
|
U.S.
BANK NATIONAL ASSOCIATION
|
|
|
By:
|
|
|
Xxxxxx
X. Xxxxxxxxx
|
|
|
Vice
President
|
|
|
Address:
|
000
Xxxxxx Xxxxxx, 00xx Xxxxx
|
|
Xxxxxxxx,
XX 00000
|
|
|
Facsimile:
|
(000)
000-0000
|
[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:
|
|
(if
different from above)
|
|
c/o:
|
|
Street:
|
|
Attention:
|
|
Tel:
|
