China Power Equipment (OTC BB:CPQQ)

In connection with the a private placement on November 30, 2009, the Company also entered into a Make Good Escrow Agreement where the Company committed to place 2,080,000 shares of Common Stock into escrow to be delivered to the Buyers if the Company fails to achieve the income targets:

• Fiscal year 2009: $4,500,000
• Fiscal year 2010: $7,000,000

The number of shares should be equal to the percentage of variation between the actual net income and the target net income, provided that no additional shares shall be delivered to the Buyers if such variation is 10% or less.

Source: 8K (December 4,  2009)