Make Good Escrow Agreement, dated October 19, 2010, by and among the Company, Guoqing Zhuang and Securities Transfer Corporation, as escrow agent

EX-10.3 6 exhibit10-3.htm EXHIBIT 10.3 8888 Acquisition Corporation - Exhibit 10.3 - Filed by newsfilecorp.com

Exhibit 10.3

MAKE GOOD ESCROW AGREEMENT

          This Make Good Escrow Agreement (the “Make Good Agreement”), dated effective as of October 19, 2010, is entered into by and among 8888 Acquisition Corporation, a Nevada corporation (the “Company”), Guoqing Zhuang (the “Make Good Pledgor”) and Securities Transfer Corporation, as escrow agent (“Escrow Agent”).

          WHEREAS, the Make Good Pledgor has agreed to place 7,492,154 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) owned by him into escrow for the benefit of each of the Glenn A. Little, Shiping Liu, Advance Insight Ltd., a British Virgin Islands corporation, and the investors participated in the private offering of securities of the Company pursuant to a securities purchase agreement (the “Securities Purchase Agreement”), dated the date of this Agreement (the “Investors”, together with Glenn A. Little, Shiping Liu and Advance Insight Ltd., the “Make Good Beneficiaries”) in the event the Company fails to satisfy certain financial thresholds.

          WHEREAS, the Company and the Make Good Pledgor have agreed to establish an escrow on the terms and conditions set forth in this Make Good Agreement;

          WHEREAS, the Escrow Agent has agreed to act as escrow agent pursuant to the terms and conditions of this Make Good Agreement; and

          WHEREAS, all capitalized terms used but not defined herein which are defined in the Securities Purchase Agreement shall have the respective meanings given to such terms in the Securities Purchase Agreement;

          NOW, THEREFORE, in consideration of the mutual promises of the parties and the terms and conditions hereof, the parties hereby agree as follows:

1. Appointment of Escrow Agent. The Make Good Pledgor and the Company hereby appoint Escrow Agent to act as Escrow Agent in accordance with the terms and conditions set forth in this Make Good Agreement, and Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent in accordance with such terms and conditions.

2. Establishment of Escrow. Within five Trading Days following the Closing, the Make Good Pledgor shall deliver, or cause to be delivered, to the Escrow Agent certificates evidencing an aggregate of 7,492,154 shares of the Common Stock (the “Escrow Shares”), along with stock powers executed in blank (or such other signed instrument of transfer acceptable to the Company’s Transfer Agent). As used in this Make Good Agreement, “Transfer Agent” means Securities Transfer Corporation, or such other entity hereafter retained by the Company as its stock transfer agent as specified in a writing from the Company to the Escrow Agent. The Make Good Pledgor hereby irrevocably agrees that, other than in accordance with Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement, the Make Good Pledgor will not offer, pledge, 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 the Escrow Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive Escrow Shares). In furtherance thereof, the Company will (x) place a stop order on all Escrow Shares which shall expire on the date the Escrow Shares are delivered to the Make Good Beneficiaries or returned to the Make Good Pledgor, (y) notify the Transfer Agent in writing of the stop order and the restrictions on such Escrow Shares under this Make Good Agreement and direct the Transfer Agent not to process any attempts by any Make Good Pledgor to resell or transfer any Escrow Shares before the date the Escrow Shares that should be delivered to the Make Good Beneficiaries are delivered to the Make Good Beneficiaries or returned to the Make Good Pledgor, or otherwise in violation of Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement. The Company shall notify the Make Good Beneficiaries as soon as the Escrow Shares have been deposited with the Escrow Agent.


3. Representations of Make Good Pledgor. The Make Good Pledgor (as to itself and its Escrowed Shares) hereby represents and warrants to the Make Good Beneficiaries as follows:

(i) All of the Escrow Shares are validly issued, fully paid and nonassessable shares of the Company, and free and clear of all Liens, except for those imposed by the applicable U.S. federal and state securities laws. Upon any transfer of Escrow Shares to the Make Good Beneficiaries hereunder, the Make Good Beneficiaries will receive full right, title and authority to such shares as holders of Common Stock free and clear of all Liens other than those imposed by the applicable federal and state securities laws.

(ii) Performance of this Make Good Agreement and compliance with the provisions hereof will not violate any provision of any applicable law and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any of the properties or assets of the Make Good Pledgor pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon Make Good Pledgor or such properties or assets, other than such breaches, defaults or Liens which would not have a material adverse effect taken as a whole.

(iii) The Make Good Pledgor has carefully considered and understands its obligations and rights under Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement, and in furtherance thereof (x) has consulted with its legal and other advisors with respect thereto and (y) hereby forever waives and agrees that it may not assert any equitable defenses in any Proceeding involving the Escrow Shares.

4. Disbursement of Escrow Shares.

          a.           In the event that the 2010 Reviewed ATNI (as defined below) reported in the Quarterly Report of the Company for the fiscal period ending December 31, 2010, as filed with the Commission on Form 10-Q (or such other form appropriate for such purpose as promulgated by the Commission) (the “2010 Report”), is less than RMB 45,997,157 (the “2010 Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will, upon written instruction from the Company and without any further action on the part of the Make Good Beneficiaries, transfer a number of Escrow Shares (as calculated below) to the Make Good Beneficiaries on a pro rata basis (determined by dividing (1) the number of shares of Common Stock purchased by each Investor under the Securities Purchase Agreement or held by each non-Investor Make Good Beneficiaries by (2) the sum total number of shares of Common Stock purchased by the Investors under the Securities Purchase Agreement plus the number of shares of Common Stock held by each non-Investor Make Good Beneficiaries) as specified in Exhibit A to this Agreement for no consideration other than the Investors’ payment of their respective Investment Amount to the Company at Closing (the “2010 Make Good Shares”). The aggregate number of “2010 Make Good Shares” means a number of shares of Common Stock (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions) calculated using the following formula:

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5,023,816 x [1 – (RMB 24,002,843 + 2010 Reviewed ATNI) / RMB 70,000,000)]2 x 8.4542

Notwithstanding anything else to the contrary herein or in Section 4.7 of the Securities Purchase Agreement, in no event shall the Make Good Pledgor be obligated to transfer more than 7,492,154 shares of the Common Stock to the Make Good Beneficiaries, as a combined group.

          b.           For purposes hereof, “2010 Reviewed ATNI” shall mean the Company’s net income after taxes for the six (6) month period ending December 31, 2010 determined in accordance with GAAP as reported in the 2010 Report, after converting into Renminbi (“RMB”) using the applicable currency translation rate as set forth in the 2010 Report, with adjustments described in this paragraph below. Notwithstanding the foregoing or anything else to the contrary herein or in Section 4.7 of the Securities Purchase Agreement, for purposes of determining whether or not the 2010 Guaranteed ATNI have been met, (i) non-operating expenses incurred as a result of the Company’s U.S. public company status shall be excluded (i.e., filing fees, costs for hiring independent directors (including compensation for such independent directors and costs for directors’ and officers’ insurance coverage in an amount and scope that is customary for an entity of the Company’s size and nature), and hiring of investor relations firm, independent auditor and U.S. securities counsel), and (ii) expenses and/or other charges relating to the release of any of the Escrow Shares as a result of the operation of this Make Good Agreement, shall not be deemed to be an expense, charge, or any other deduction from revenues even though GAAP may require contrary treatment or the 2010 Report may report otherwise.

If prior to the first anniversary of the filing of the 2010 Report, the Company or their auditors report or recognize that the financial statements contained in such report are subject to amendment or restatement such that the Company would recognize or report adjusted 2010 Reviewed ATNI of less than the 2010 Guaranteed ATNI, then notwithstanding any prior return of Escrow Shares to the Make Good Pledgor, the Make Good Pledgor will, within 10 Business Days following the earlier of the filing of such amendment or restatement or recognition, deliver the relevant 2010 Make Good Shares to the Make Good Beneficiaries without any further action on the part of the Make Good Beneficiaries.

In the event that the 2010 Reviewed ATNI is equal to or greater than the 2010 Guaranteed ATNI, no transfer of the 2010 Make Good Shares shall be required by the Make Good Pledgor to the Make Good Beneficiaries under this Section and all Escrow Shares shall be returned to the Make Good Pledgor in accordance with this Make Good Agreement, subject to return as provided in the immediately preceding paragraph.

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In the event that the 2010 Reviewed ATNI is less than the 2010 Guaranteed ATNI and the total number of 2010 Make Good Shares to be transferred to the Make Good Beneficiaries is less than the total number of Escrow Shares, the remaining number of Escrow Shares shall be returned to the Make Good Pledgor in accordance with the Make Good Agreement, subject to return as provided in the two paragraphs above.

Any transfer of the 2010 Make Good Shares under this Section shall be made to the Make Good Beneficiaries or the Make Good Pledgor, as applicable, within 10 Business Days after the date which the 2010 Report is filed with the Commission and otherwise in accordance with this Make Good Agreement subject to return as provided for herein and, in the event that any of the 2010 Make Good Shares are required to be distributed to the Make Good Beneficiaries in accordance with the terms of this Make Good Agreement, the Escrow Agent will deliver such shares to the Make Good Beneficiaries as determined in Section 4.1(a) hereof. The Company will deliver to the Escrow Agent a copy of the 2010 Report, together with the calculation of whether the 2010 Guaranteed ATNI has been achieved. Escrow Agent need only rely on such letters from the Company.

          c.           Pursuant to Section 4(a), if the Company delivers a notice to the Escrow Agent that all or a portion of the Escrow Shares are to be transferred to the Make Good Beneficiaries, then the Escrow Agent shall immediately forward the 2010 Make Good Shares to the Company’s Transfer Agent for reissuance to Make Good Beneficiaries in an amount to each Make Good Beneficiary as determined in Section 4(a) hereof and otherwise in accordance with this Make Good Agreement. The Company covenants and agrees that upon any transfer of 2010 Make Good Shares to the Make Good Beneficiaries in accordance with this Make Good Agreement, the Company shall promptly instruct its Transfer Agent to reissue such 2010 Make Good Shares in the applicable Make Good Beneficiary’s name and deliver the same, or cause the same to be delivered as directed by such Make Good Beneficiary in an amount to each Make Good Beneficiary as determined in Section 4.1(a) hereof. If a notice from the Company pursuant to Section 4(a) indicates that all or a portion of the Escrow Shares are to be returned to the Make Good Pledgor, then the Escrow Agent will promptly deliver the Escrow Shares to the Make Good Pledgor in accordance with instructions provided by the Make Good Pledgor at such time.

          d.           Each of the Make Good Beneficiaries understands and agrees that the Make Good Beneficiaries’ right to receive 2010 Make Good Shares is a unique and personal right of such Make Good Beneficiary which requires such Make Good Beneficiary to continue to own the shares when the 2010 Reviewed ATNI is determined for purposes of this Make Good Agreement. The right of a Make Good Beneficiary to receive any Make Good Shares will be proportionately reduced if such Make Good Beneficiary does not continue to own the same number of shares on the 2010 Reviewed ATNI determination date as are owned on the date hereof. Furthermore, the right to receive Make Good Shares shall not run to the benefit of any transferee of any Shares transferred by any Make Good Beneficiary to a third party (other than an entity affiliated with such Make Good Beneficiary, family member or heir of a Make Good Beneficiary or to a trust or similar vehicle established by a Make Good Beneficiary in connection with estate planning purposes). Notwithstanding anything to the contrary herein, if Advanced Insight Ltd. transfers any of its shares of Common Stock to a third party within 30 days after the Closing, its right to receive Make Good Shares shall run to the benefit of such third party as if the third party owned the shares on the date hereof and Advanced Insight Ltd.’s right to the Make Good Shares, if any, will be appropriately and proportionally reduced. Advanced Insight Ltd. shall inform the Company such transfer within 5 Business Days after the completion of the transfer.

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          e.           The Company and Make Good Pledgor covenant and agree to provide the Escrow Agent with certified tax identification numbers by furnishing appropriate forms W-9 or W-8 and such other forms and documents that the Escrow Agent may request, including appropriate W-9 or W-8 forms for each Investor. The Company, Make Good Pledgor and the Make Good Beneficiaries understand that if such tax reporting documentation is not provided and certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder, to withhold a portion of any interest or other income earned on the investment of the Escrow Property.

5. Notice of Filings. The Company agrees to promptly provide the Make Good Beneficiaries written notice of the filing with the Commission of any financial statements or reports referenced herein.

6. Escrow Shares. If any Escrow Shares are deliverable to the Make Good Beneficiaries in accordance with this Make Good Agreement, (i) Make Good Pledgor covenants and agrees to execute all such instruments of transfer (including stock powers and assignment documents) as are customarily executed to evidence and consummate the transfer of the Escrow Shares from Make Good Pledgor to the Make Good Beneficiaries, to the extent not done so in accordance with Section 2, and (ii) following its receipt of the documents referenced in Section 6(i), the Company and Escrow Agent covenant and agree to cooperate with the Transfer Agent so that the Transfer Agent may promptly reissue such Escrow Shares in the applicable Make Good Beneficiary’s name and delivers the same as provided herein or otherwise directed in writing by the applicable Make Good Beneficiary. Until such time as (if at all) the Escrow Shares are required to be delivered pursuant to the Securities Purchase Agreement and in accordance with this Make Good Agreement, (i) any dividends payable in respect of the Escrow Shares and all voting rights applicable to the Escrow Shares shall be retained by Make Good Pledgor and (ii) should the Escrow Agent receive dividends or voting materials, such items shall not be held by the Escrow Agent, but shall be passed immediately on to the Make Good Pledgor and shall not be invested or held for any time longer than is needed to effectively re-route such items to the Make Good Pledgor. In the event that the Escrow Agent receives a communication requiring the conversion of the Escrow Shares to cash or the exchange of the Escrow Shares for that of an acquiring company, the Escrow Agent shall solicit and follow the written instructions of the Make Good Pledgor; provided, that the cash or exchanged shares are instructed to be redeposited into the Escrow Account. Make Good Pledgor shall be responsible for all taxes resulting from any such conversion or exchange.

Assuming the Make Good Pledgor provides good and valid title to the Escrow Shares to be transferred and delivered on behalf of the Make Good Pledgor to the Make Good Beneficiaries hereunder, free and clear of all liens, encumbrances, equities or claims, the Escrow Agent will ensure that upon delivery of the Escrow Shares, good and valid title to the Escrow Shares, free and clear of all liens, encumbrances, equities or claims will pass to the Make Good Beneficiaries. The Escrow Agent shall not take any action which could impair the Make Good Beneficiaries’ rights in the Escrow Shares. The Escrow Agent shall not sell, transfer, assign or otherwise dispose of (by operation of law or otherwise) or grant any option with respect to any Escrow Shares prior to the termination of this Agreement.

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7. Interpleader. Should any controversy arise among the parties hereto with respect to this Make Good Agreement or with respect to the right to receive the Escrow Shares, Escrow Agent shall have the right to consult and hire counsel and/or to institute an appropriate interpleader action to determine the rights of the parties. Escrow Agent is also hereby authorized to institute an appropriate interpleader action upon receipt of a written letter of direction executed by the parties so directing the Escrow Agent. If Escrow Agent is directed to institute an appropriate interpleader action, it shall institute such action not prior to thirty (30) days after receipt of such letter of direction and not later than sixty (60) days after such date. Any interpleader action instituted in accordance with this Section 7 shall be filed in any court of competent jurisdiction in the State of New York, and the Escrow Shares in dispute shall be deposited with the court and in such event the Escrow Agent shall be relieved of and discharged from any and all obligations and liabilities under and pursuant to this Make Good Agreement with respect to the Escrow Shares and any other obligations hereunder.

8. Exculpation and Indemnification of Escrow Agent.

          a.           Escrow Agent is not a party to, and is not bound by or charged with notice of any agreement out of which this escrow may arise. Escrow Agent acts under this Make Good Agreement as a depositary only and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution of any notice given by any other party hereunder, or for the identity or authority of any person executing any such notice. Escrow Agent will have no duties or responsibilities other than those expressly set forth herein. Escrow Agent will be under no liability to anyone by reason of any failure on the part of any party hereto (other than Escrow Agent) or any maker, endorser or other signatory of any document to perform such person’s or entity’s obligations hereunder or under any such document. Except for this Make Good Agreement and instructions to Escrow Agent pursuant to the terms of this Make Good Agreement, Escrow Agent will not be obligated to recognize any agreement between or among any or all of the persons or entities referred to herein, notwithstanding its knowledge thereof.

          b.           Escrow Agent will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, absent gross negligence or willful misconduct. Escrow Agent may rely conclusively on, and will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel (including counsel chosen by Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The duties and responsibilities of the Escrow Agent hereunder shall be determined solely by the express provisions of this Make Good Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any obligation under or imposed by any laws of the State of New York upon fiduciaries. THE ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

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          c.           The Company and Make Good Pledgor each hereby, jointly and severally, indemnify and hold harmless the Escrow Agent and any of their principals, partners, agents, employees and affiliates from and against any expenses, including reasonable attorneys’ fees and disbursements, damages or losses suffered by Escrow Agent in connection with any claim or demand, which, in any way, directly or indirectly, arises out of or relates to this Make Good Agreement or the services of Escrow Agent hereunder; except, that if Escrow Agent is guilty of willful misconduct or gross negligence under this Make Good Agreement, then Escrow Agent will bear all losses, damages and expenses arising as a result of its own willful misconduct or gross negligence. Promptly after the receipt by Escrow Agent of notice of any such demand or claim or the commencement of any action, suit or proceeding relating to such demand or claim, Escrow Agent will notify the other parties hereto in writing. For the purposes hereof, the terms “expense” and “loss” will include all amounts paid or payable to satisfy any such claim or demand, or in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties hereto, and all costs and expenses, including, but not limited to, reasonable attorneys’ fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding. The provisions of this Section 8 shall survive the termination of this Make Good Agreement, and the resignation or removal of the Escrow Agent.

9. Compensation of Escrow Agent. Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as Exhibit B, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder is intended as full compensation for Escrow Agent’s services as contemplated by this Make Good Agreement; provided, however, that in the event that Escrow Agent renders any material service not contemplated in this Make Good Agreement, or there is any assignment of interest in the subject matter of this Make Good Agreement, or any material modification hereof, or if any material controversy arises hereunder, or Escrow Agent is made a party to any litigation pertaining to this Make Good Agreement, or the subject matter hereof, then Escrow Agent shall be reasonably compensated by the Company for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney’s fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Company. Prior to incurring any costs and/or expenses in connection with the foregoing sentence, Escrow Agent shall be required to provide written notice to the Company of such costs and/or expenses and the relevancy thereof and Escrow Agent shall not be permitted to incur any such costs and/or expenses which are not related to litigation prior to receiving written approval from the Company, which approval shall not be unreasonably withheld.

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10. Resignation of Escrow Agent. At any time, upon ten (10) Business Days’ written notice to the Company and the Make Good Beneficiaries, Escrow Agent may resign and be discharged from its duties as Escrow Agent hereunder. As soon as practicable after its resignation, Escrow Agent will promptly turn over to a successor escrow agent appointed by the Company the Escrow Shares held hereunder upon presentation of a document appointing the new escrow agent and evidencing its acceptance thereof. If, by the end of the 10 Business Day period following the giving of notice of resignation by Escrow Agent, the Company shall have failed to appoint a successor escrow agent, Escrow Agent shall deposit the Escrow Shares as directed by the Make Good Beneficiaries holding at least a majority of the shares of Common Stock then held by them with the understanding that such Escrow Shares will continue to be subject to the provisions of this Make Good Agreement.

11. Records. Escrow Agent shall maintain accurate records of all transactions hereunder. Promptly after the termination of this Make Good Agreement or as may reasonably be requested by the parties hereto from time to time before such termination, Escrow Agent shall provide the parties hereto, as the case may be, with a complete copy of such records, certified by Escrow Agent to be a complete and accurate account of all such transactions. The authorized representatives of each of the parties hereto shall have access to such books and records at all reasonable times during normal business hours upon reasonable notice to Escrow Agent and at the requesting party’s expense.

12. Notice. All notices, communications and instructions required or desired to be given under this Make Good Agreement must be in writing and shall be deemed to be duly given if sent by registered or certified mail, return receipt requested, or overnight courier, to the addresses listed on the signature pages hereto.

13. Execution in Counterparts. This Make Good Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14. Amendment and Modification. This Make Good Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent, the Company, the Make Good Pledgor and the Make Good Beneficiaries potentially entitled to receive a majority of the 2010 Make Good Shares upon the operation of Section 4(a) hereof. This Make Good Agreement is binding upon and intended to be for the sole benefit of the parties hereto and their permitted successors, heirs and assigns, and none of the provisions of this Make Good Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person, except for the Make Good Beneficiaries. No portion of the Escrow Shares shall be subject to interference or control by any creditor of any party hereto, or be subject to being taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such party hereto prior to the disbursement thereof to such party hereto in accordance with the provisions of this Make Good Agreement.

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15. Applicable Law. This Make Good Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Make Good Agreement shall survive the execution and delivery hereof and any investigations made by any party. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Make Good Agreement shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (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, and hereby irrevocably waives, and agrees not to assert in any such 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. Each party hereto 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 Make Good 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.

16. Headings. The headings contained in this Make Good Agreement are for convenience of reference only and shall not affect the construction of this Make Good Agreement.

17. Attorneys' Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Make Good Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees from the other party (unless such other party is the Escrow Agent), which fees may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which fees shall be in addition to any other relief that may be awarded.

18. Merger or Consolidation. Any corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the successor escrow agent under this Make Good Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.

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          IN WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as of the date set forth opposite their respective names.

  8888 ACQUISITION CORPORATION
     
     
  By: /s/ Guoqing Zhuang
  Name: Guoqing Zhuang
  Title: Chief Executive Officer
     
  Address: c/o Jinjiang Chengchang Shoes Co., Ltd.
  Qingyanglianyu Industrial Area
  Jinjiang City, Fujian Province
  People’s Republic of China
  Facsimile: (86) 595-85689208
  Attn.: Chief Executive Officer
     
     
     
  GUOQING ZHUANG
     
     
  /s/ Guoqing Zhuang
     
  Address: c/o Jinjiang Chengchang Shoes Co., Ltd.
  Qingyanglianyu Industrial Area
  Jinjiang City, Fujian Province
  People’s Republic of China
  Facsimile: (86) 595-85689208
     
     
     
  SECURITIES TRANSFER CORPORATION
     
     
  By: /s/ Kevin B. Halter, Jr.
  Name: Kevin B. Halter, Jr.
  Title:
     
  Address: 2591 Dallas Parkway
  Suite 102
  Frisco, TX 75034
  Facsimile:
  Attn.: Kevin B. Halter, Jr.

[Signature Page to Make Good Escrow Agreement]


Exhibit A

SHARES HELD BY MAKE GOOD BENEFICIARIES
AS OF THE DATE OF THE MAKE GOOD AGREEMENT


Make Good Beneficiary’s Legal Name
Shares held by Make Good
Beneficiary
Advanced Insight, Ltd. 1,168,600
Glenn A. Little 305,700
Wang Wenling 3,226,833
Shiping Liu 322,683
Total: 5,023,816


Exhibit B

ESCROW AGENT FEE SCHEDULE

 

ESCROW AGENT SERVICES

Escrow Agent Account fee............……………………………............…. $170.00 per month
Examine, Process and issue share distribution as per the Agreements.......… $25.00 per Shareholder.
Envelopes & Postage.................................................................................. Included