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Exhibit 10.2

MAKE GOOD ESCROW AGREEMENT

 

This Make Good Escrow Agreement (the "Make Good Agreement"), dated effective as
of August 14, 2008, is entered into by and among Fashion Tech International,
Inc., a Nevada corporation (the “Company”), KUNG Yiu Fai (the “Make Good
Pledgor”), WLT Brothers Capital, Inc., as Investor agent (“Investor Agent”) and
Securities Transfer Corporation, as escrow agent (“Escrow Agent”).

 

WHEREAS, each of the investors in the private offering of securities of the
Company (the "Investors") has entered into a Securities Purchase Agreement,
dated the date of this Agreement (the "Securities Purchase Agreement"),
evidencing their participation in the Company's private offering (the
"Offering") of securities.  As an inducement to the Investors to participate in
the Offering and as set forth in the Securities Purchase Agreement, the Make
Good Pledgor has agreed to place certain shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”) owned by them into escrow for
the benefit of the Investors in the event the Company fails to satisfy certain
financial thresholds.

 

WHEREAS, pursuant to the requirements of the Stock Purchase Agreement, the
Company and 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 three 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 1,800,261shares of the Company’s
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 understand and agree that the
Investors’ right to receive 2009 Make Good Shares (as defined below) and 2010
Make Good Shares (as defined below) pursuant to Section 4.7 of the Securities
Purchase Agreement and this Make Good Agreement shall continue to run to the
benefit of each Investor even if such Investor shall have transferred or sold
all or any portion of the Shares it acquired under the Securities Purchase
Agreement, and that each Investor shall have the right to assign its rights to
receive all or any such 2009 Make Good Shares and 2010 Make Good Shares to other
Persons in conjunction with negotiated sales or transfers of any of its Shares.
 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 Investors 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 Investors are delivered to the Investors 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 Investors as soon as the 2009 Make Good Shares and 2010 Make Good
Shares have been deposited with the Escrow Agent.

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3. Representations of Make Good Pledgor.  The Make Good Pledgor (as to itself
and its Escrowed Shares) hereby represents and warrants to the Investors 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.  Upon any transfer of
Escrow Shares to Investors hereunder, Investors will receive full right, title
and authority to such shares as holders of Common Stock of the Company free and
clear of all liens other than those imposed by US Federal 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 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.

 

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4. Disbursement of Escrow Shares.

 

a.

In the event that the After Tax Net Income (as defined below) reported in the
Annual Report of the Company for the fiscal year ending March 31, 2009, as filed
with the Commission on Form 10-K (or such other form appropriate for such
purpose as promulgated by the Commission) (the “2009 Annual Report”) is less
than $13,919,707 (the “2009 Guaranteed ATNI”), the Escrow Agent (on behalf of
the Make Good Pledgor) will, without any further action on the part of the
Investors, transfer a number of 2009 Make Good Shares (as calculated below) to
the Investors on a pro rata basis (determined by dividing each Investor’s
Investment Amount by the aggregate of all Investment Amounts delivered to the
Company by the Investors under the Securities Purchase Agreement) as specified
in Exhibit A to this Agreement for no consideration other than payment of their
respective Investment Amount paid to the Company at Closing.  The “2009 Make
Good Shares” means a number of shares of Common Stock equal to 50% of the
Aggregate Shares issued pursuant to the Securities Purchase Agreement (as
equitably adjusted for any stock splits, stock combinations, stock dividends or
similar transactions).  The number of 2009 Make Good Shares issuable to
Investors shall be equal to:

 

[(2009 Guaranteed ATNI – actual After Tax Net Income of the Company for the
fiscal year ended March 31, 2009)/2009 Guaranteed ATNI]*aggregate number of 2009
Make Good Shares

 

In the event that the After Tax Net Income (as defined below) reported in the
Annual Report of the Company for the fiscal year ending March 31, 2010, as filed
with the Commission on Form 10-K (or such other form appropriate for such
purpose as promulgated by the Commission) (the “2010 Annual Report”) is less
than $18,495,315 (the “2010 Guaranteed ATNI”), the Escrow Agent (on behalf of
the Make Good Pledgor) will, without any further action on the part of the
Investors, transfer a number of 2010 Make Good Shares (as calculated below) to
the Investors on a pro rata basis (determined by dividing each Investor’s
Investment Amount by the aggregate of all Investment Amounts delivered to the
Company by the Investors under the Securities Purchase Agreement) as specified
in Exhibit A to this Agreement for no consideration other than payment of their
respective Investment Amount paid to the Company at Closing.  The “2010 Make
Good Shares” means a number of shares of Common Stock equal to 50% of the
Aggregate Shares issued pursuant to the Securities Purchase Agreement (as
equitably adjusted for any stock splits, stock combinations, stock dividends or
similar transactions).  The number of 2010 Make Good Shares issuable to
Investors shall be equal to:

 

[(2010 Guaranteed ATNI – actual After Tax Net Income of the Company for the
fiscal year ended March 31, 2010)/2010 Guaranteed ATNI]*aggregate number of 2010
Make Good Shares

 

For purposes hereof, “After Tax Net Income” shall mean the Company’s operating
income after taxes for the fiscal year ending March 31, 2009 or March 31, 2010
(as applicable) in each case determined in accordance with GAAP as reported in
the 2009 Annual Report or 2010 Annual Report (as applicable).  Notwithstanding
the foregoing or anything else to the contrary herein, for purposes of
determining whether or not the 2009 Guaranteed ATNI and 2010 Guaranteed ATNI
have been met, (i) expenses incurred as a result of the Company's fulfillment of
its obligations under Section 4.8 of the Securities Purchase Agreement shall be
excluded (i.e., costs for hiring the independent directors (including
compensation for such independent directors and costs for director’s and
officer’s insurance coverage in an amount and scope that is customary for a
company of the Company’s size and nature) and hiring of the investor relations
firm); (ii) the release of any of the 2009 Make Good Shares and/or 2010 Make
Good Shares to the Make Good Pledgor as a result of the operation of this
Section 4 shall not be deemed to be an expense, charge, or any other deduction
from revenues even though GAAP may require contrary treatment or the Annual
Report for the respective fiscal years filed with the Commission by the Company
may report otherwise; and (iii) expenses (including interests and fees) incurred
as a result of the issuance of debt for an amount no greater than the difference
between $20 million and the aggregate Investment Amount should be excluded.
  Other than as set forth in this Section 4, no other exclusions shall be made
for any non-recurring expenses of the Company in determining whether any of the
2009 Guaranteed ATNI or 2010 Guaranteed ATNI have been achieved.  

 

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If prior to the second anniversary of the filing of either of the 2009 Annual
Report or the 2010 Annual Report (as applicable), 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 After Tax Net Income of less than either of the 2009 Guarantee
ATNI or the 2010 Guaranteed ATNI (as applicable), then notwithstanding any prior
return of 2009 Make Good Shares or 2010 Make Good 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 2009 Make Good Shares or 2010 Make Good Shares to the Investors
without any further action on the part of the Investors.

 

In the event that the After Tax Net Income reported in the 2009 Annual Report is
equal to or greater than the 2009 Guaranteed ATNI, no transfer of the 2009 Make
Good Shares shall be required by the Make Good Pledgor to the Investors under
this Section and such 2009 Make Good Shares shall be returned to the Make Good
Pledgor in accordance with this Make Good Agreement.  In the event that the
After Tax Net Income reported in the 2010 Annual Report 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 Investors under this Section and such
2010 Make Good Shares shall be returned to the Make Good Pledgor in accordance
with the Make Good Agreement, subject to return as provided in the immediately
preceding sentence.  

 

Any transfer of the 2009 Make Good Shares and the 2010 Make Good Shares under
this Section shall be made to the Investors or the Make Good Pledgor, as
applicable, within 10 Business Days after the date which the 2009 Annual Report
or 2010 Annual Report, as applicable, is filed with the Commission and otherwise
in accordance with this Make Good Agreement subject to return as provided in the
immediately preceding paragraph and, in the event that any of the 2009 Make Good
Shares or 2010 Make Good Shares are required to be distributed to the Investors
in accordance with the terms of this Agreement, the Escrow Agent will deliver
such shares to the Investors in accordance with Exhibit A.  The Investor Agent
will deliver to the Escrow Agent (with a copy to the Company) a copy of the 2009
Annual Report and 2010 Annual Report, together with the calculation of whether
the 2009 Guaranteed ATNI or 2010 Guaranteed ATNI (as applicable) has been
achieved.  Escrow Agent need only rely on such letters from Investor Agent and
will disregard any contrary or further calculations or instructions in such
regard delivered by or on behalf of the Company.  

 

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b.

Pursuant to Section 4(a), if the Investor Agent delivers a notice to the Escrow
Agent that the Escrow Shares are to be transferred to the Investors, then the
Escrow Agent shall immediately forward either the 2009 Make Good Shares or 2010
Make Good Shares, as the case may be, to the Company’s Transfer Agent for
reissuance to the Investors in an amount to each Investor as set forth on
Exhibit A attached hereto and otherwise in accordance with this Make Good
Agreement. The Company covenants and agrees that upon any transfer of 2009 Make
Good Shares or 2010 Make Good Shares to the Investors in accordance with this
Make Good Agreement, the Company shall promptly instruct its Transfer Agent to
reissue such 2009 Make Good Shares or 2010 Make Good Shares in the applicable
Investor’s name and deliver the same, or cause the same to be delivered as
directed by such Investor in an amount to each Investor as set forth on Exhibit
A attached hereto.  If the Company does not promptly provide such instructions
to the Transfer Agent of the Company, then the Investor Agent is hereby
irrevocably authorized and directed by the Company to give such re-issuance
instruction to the Transfer Agent of the Company.  If a notice from the Investor
Agent pursuant to Section 4(a) indicates that the Escrow Shares are to be
returned to the Make Good Pledgor, then the Escrow Agent will promptly deliver
either the 2009 Make Good Shares or 2010 Make Good Shares, as the case may be,
to the Make Good Pledgor in accordance with instructions provided by the Make
Good Pledgor at such time.

 

c.

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 Investors 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 Investor Agent
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 Investors 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 Investors, 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 Investor’s name
and delivers the same as provided herein or otherwise directed in writing by the
applicable Investors.  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.

 

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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
Investors 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 Investors.   The Escrow Agent
shall not take any action which could impair Investors’ 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.

 

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 and/or the Investor 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 and/or the Investor Agent
are also each hereby authorized to institute an appropriate interpleader action
upon receipt of a written letter of direction executed by the parties so
directing either Escrow Agent or the Investor Agent. If Escrow Agent or the
Investor 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 Escrow
Agent and the Investor 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 and the Investor 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.  The Investor Agent’s sole obligation under this Make Good
Agreement is to provide written instruction to Escrow Agent (following such time
as the Company files certain periodic financial reports as specified in Section
4 hereof) directing the distribution of the Escrow Shares.  The Investor Agent
will provide such written instructions upon review of the relevant After Tax Net
Income amount reported in such periodic financial reports as specified in
Section 4 hereof.  The Investor Agent is not charged with any obligation to
conduct any investigation into the financial reports or make any other
investigation related thereto.  In the event of any actual or alleged mistake or
fraud of the Company, its auditors or any other person in connection with such
financial reports of the Company, the Investor Agent shall have no obligation or
liability to any party hereunder.

 

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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 each Make Good Pledgor each hereby, jointly and severally,
indemnify and hold harmless each of Escrow Agent, the Investor 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 or the Investor 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 or the
Investor Agent hereunder; except, that if Escrow Agent or the Investor Agent is
guilty of willful misconduct or gross negligence under this Make Good Agreement,
then Escrow Agent or the Investor Agent, as the case may be, 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 or the Investor
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 or the
Investor Agent, as the case may be, 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.

 

10. Resignation of Escrow Agent.  At any time, upon ten (10) Business Days'
written notice to the Company and the Investors, 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 Investor Agent with the understanding that such Escrow
Shares will continue to be subject to the provisions of this Make Good
Agreement.

 

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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. Assignment and Modification.  This Make Good Agreement and the rights and
obligations hereunder of the Company may be assigned by the Company only
following the prior written consent of the Investor Agent. This Make Good
Agreement and the rights and obligations hereunder of the Escrow Agent may be
assigned by the Escrow Agent only with the prior consent of the Company and the
Investor Agent.  This Make Good Agreement and the rights and obligations
hereunder of the Make Good Pledgor may not be assigned by any Make Good Pledgor.
 Subject to the requirements under federal and state securities laws, an
Investor may assign its rights under this Make Good Agreement without any
consent from any other party. 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
Investor Agent.  This Make Good Agreement is binding upon and intended to be for
the sole benefit of the parties hereto and their respective successors, heirs
and permitted 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 Investors under the Securities Purchase Agreement.
 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.

 

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.

 

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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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10

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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.

 

COMPANY:

 

FASHION TECH INTERNATIONAL, INC.

 

 

By: /s/ Jinlin Shi                           

Name: Jinlin Shi

Title:   Chief Executive Officer

Address: Daqing LongHeDa Food Co., Ltd.

No. 2 Wenhua Street

Dongfeng New Village, Daqing

Heilongjiang, China 163311

 

Facsimile: (86) 459-4609488

Attn.: Chief Executive Officer

 

MAKE GOOD PLEDGOR:

KUNG YIU FAI

 

/s/ Kung Yiu Fai                               

 

Address:

Flat 7, 16/F, Block 45, Heng Fa Chuen,

Chai Wan, Hong Kong

 

Facsimile:  

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK -

 SIGNATURE PAGE FOR OTHER PARTIES FOLLOWS]

 

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ESCROW AGENT:

 

Securities Transfer Corporation, as Escrow Agent

 

 

By:_/s/ Kevin Halter, Jr.________________

Name: Kevin Halter, Jr.

Title: President

 

Address: 2591 Dallas Parkway, Suite 102, Frisco, TX 75034

 

Facsimile:  

Attn.: Kevin B. Halter, Jr.

  

 

INVESTOR AGENT

 

WLT Brothers Capital, Inc., as Investor Agent

 

 

By: /s/  James H. Groh

Name:  James H. Groh

Title:  President and CEO

 

Address:

 

 

 

Facsimile:  

Attn.:

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