Document:

Unassociated Document

     

    MAKE
      GOOD ESCROW AGREEMENT 

     

    This
      Make
      Good Escrow Agreement (the "Make Good Agreement"), dated effective as of March
      12, 2008, is entered into by and among First
      Growth Investors, Inc., a Nevada corporation
      (the
      "Company"), HFG International, Limited, a Hong Kong company (“HFG”), Mr. Kunio
      Yamamoto, in his individual capacity ("Make Good Pledgor") and Interwest
      Transfer Company, Inc., as escrow agent ("Escrow Agent"). 

     

    WHEREAS,
      each of the investors in a private offering of securities of the Company has
      entered into a Securities Purchase Agreement, dated March 12, 2008 (the “SPA”),
      evidencing their participation in the Company's private offering (the
“Offering”) of securities. As an inducement to the investors (the “Investors” as
      defined in the SPA) to participate in the Offering and as set forth in the
      SPA,
      Make Good Pledgor has agreed to place certain shares of the Company’s common
      stock, par value $0.001 per share (the “Common Stock”) into escrow for the
      benefit of the Investors in the event the Company fails to satisfy certain
      financial thresholds.

     

    WHEREAS,
      to facilitate such arrangements described above, a Make Good Escrow Agreement
      (the “PIPE Make Good Escrow Agreement”), dated effective as of March 12, 2008,
      has been entered into by and among the Company, the Investors, Mr. Kunio
      Yamamoto, in his individual capacity as a make good pledgor therein,
      Roth Capital
      Partners, LLC (“Roth”) and Tri-State Title & Escrow, LLC (“Tri-State”), as
      escrow agent therein. 

     

    WHEREAS,
      HFG and Make Good Pledgor now agree that, for the purpose of this Make Good
      Agreement, the Escrow Agent herein shall conclusively refer to the instructions
      by Roth made
      in
      accordance with the PIPE Make Good Escrow Agreement; 

     

    WHEREAS,
      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 shall have the meanings
      assigned them in the SPA; 

     

    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.
      Make
      Good Pledgor and the Company hereby appoint Escrow Agent to act 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 in accordance with
      such
      terms and conditions. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.
      Establishment of Escrow.
      Within
      three Trading Days following the Closing, Make Good Pledgor shall deliver,
      or
      cause to be delivered, to the Escrow Agent certificates evidencing an aggregate
      of 6,917,540 shares 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 Interwest Transfer Company, Inc., 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 understands and agrees that HFG’s right to receive 2008 Make Good Shares
      (as defined below) and 2009 Make Good Shares (as defined below) pursuant to
      and
      this Make Good Agreement shall continue to run to the benefit of HFG
      even if
      such Investor shall have transferred or sold all or any portion of its Shares,
      and that HFG shall have the right to assign its rights to receive all or any
      such shares of Common Stock 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 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) or engage in any Short Sales with respect
      to any security of the Company. 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 HFG 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 the Make Good Pledgor to resell or transfer
      any
      Escrow Shares before the date the Escrow Shares delivered to HFG are delivered
      to HFG or returned to the Make Good Pledgor, or otherwise in violation of this
      Make Good Agreement. The Company shall notify HFG as soon as the 2008 Make
      Good
      Shares and 2009 Make Good Shares have been deposited with the Escrow Agent.
      For
      purposes hereof, “Short
      Sales”
      include,
      without limitation, all “short sales” as defined in Rule 200 promulgated under
      Regulation SHO under the Exchange Act and all types of direct and indirect
      stock
      pledges, forward sale contracts, options, puts, calls, swaps and similar
      arrangements (including on a total return basis), and sales and other
      transactions through non-US broker dealers or foreign regulated
      brokers.

     

    3. Representations
      of Make Good Pledgor and the Company.
      Make
      Good Pledgor and the Company hereby represent and warrant, severally and not
      jointly, as to itself only, to HFG 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 pledges, liens and encumbrances. Upon
      any
      transfer of Escrow Shares to HFG hereunder, HFG will receive full right, title
      and authority to such shares as holders of Common Stock of the
      Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (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, charge
      or
      encumbrance 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, 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 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. The
      Make
      Good Pledgor agrees
      that 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 December 31, 2008, as filed
      with the Commission on Form 10-K (or such other form appropriate for such
      purpose as promulgated by the Commission) (the “2008 Annual Report”), is less
      than $9,000,000 (the “2008 Guaranteed ATNI”), the
      Escrow Agent (on behalf of the Make Good Pledgor) will
      transfer all of the 2008 Make Good Shares to HFG on a pro rata basis
      (determined by dividing HFG’s Investment Amount by the aggregate of all
      Investment Amounts delivered to the Company by HFG under the SPA) for no
      consideration other than payment of their respective Investment Amount paid
      to
      the Company at Closing.
      The
“2008 Make Good Shares” means 3,458,770 shares of Common Stock (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions)
      required
      to be deposited with the Escrow Agent pursuant to the terms of this Make Good
      Agreement. In
      the
      event that either (i) the Earnings Per Share (as defined below) reported in
      the
      2009 Annual Report is less than $0.740 on a fully diluted basis (as equitably
      adjusted for any stock splits, stock combinations, stock dividends or similar
      transactions) (the “2009 Guaranteed EPS”) or (ii) the After Tax Net Income
      reported in the 2009 Annual Report is less than 95% of $13,000,000 (the “2009
      Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will
      transfer all of the 2009 Make Good Shares to HFG on a pro rata basis (determined
      by dividing HFG’s
      Investment Amount by the aggregate of all Investment Amounts delivered to the
      Company by HFG under the SPA) for no consideration other than payment of their
      respective Investment Amount paid to the Company at Closing. The “2009 Make Good
      Shares” means the 3,458,770 shares of Common Stock (as equitably adjusted for
      any stock splits, stock combinations, stock dividends or similar transactions)
      required to be deposited with the Escrow Agent pursuant to the terms of this
      Make Good Agreement. Notwithstanding
      the foregoing or anything else to the contrary herein, for purposes of
      determining whether or not the 2008 Guaranteed ATNI, 2009 Guaranteed EPS and
      2009 Guaranteed ATNI have been met, the following items 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:

     

    (a) the
      release of any of the 2008 Make Good Shares and/or 2009 Make Good Shares to
      the
      Make Good Pledgor as a result of the operation of this Section 4 (for
      additional clarity, the Company may disregard any compensation charge or expense
      required to be recognized by the Company under GAAP resulting from the release
      of the 2008 Make Good Shares or 2009 Make Good Shares (as relevant) to Make
      Good
      Pledgor if and to the extent such charge or expense is specified in the
      Company's audited financial statements for the relevant year, as filed with
      the
      Commission);
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    No
      other
      exclusions shall be made for any non-recurring expenses of the Company in
      determining whether any of the 2008 Guaranteed ATNI, 2009 Guaranteed EPS, or
      2009 Guaranteed ATNI have been achieved. For
      purposes of determining whether any of the 2008 Guaranteed ATNI, 2009
      Guaranteed EPS,
      or 2009
      Guaranteed ATNI have been achieved, the Company may not include any
      non-operating income including, but not limited to, government grants, research
      grants, proceeds from asset sales, etc. in the calculation of the 2008
      Guaranteed ATNI, 2009
      Guaranteed EPS,
      or 2009
      Guaranteed ATNI, as applicable. If
      prior
      to the second anniversary of the filing of either of the 2008 Annual Report
      or
      the 2009 Annual Report (as relevant), 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 2008 Guarantee ATNI
      or
      the 2009 Guaranteed ATNI (as relevant) or Earnings Per Share of less than the
      2009 Guaranteed EPS, then notwithstanding any prior return of
      2008
      Make Good Shares or 2009 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 2008 Make Good Shares or 2009 Make Good Shares to
      HFG.
      In
      the
      event that the After Tax Net Income reported in the 2008 Annual Report, is
      equal
      to or greater than the 2008 Guaranteed ATNI,
      no
      transfer of the 2008 Make Good Shares shall be required by the Make
      Good
      Pledgor
      to HFG
      under this Section and such 2008 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 2009 Annual Report is equal
      to or greater than the 2009 Guaranteed ATNI and the Earnings Per Share reported
      in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed EPS,
      no
      transfer of the 2009 Make Good Shares shall be required by the Make
      Good
      Pledgor
      to HFG
      under this Section and such 2009 Make Good Shares shall be returned to the
      Make
      Good
      Pledgor
      in
      accordance with the Make Good Agreement. 

    

    Any
      such
      transfer or return of the 2008 Make Good Shares or the 2009 Make Good Shares
      under this Section shall be made to HFG or the Make Good Pledgor, as applicable,
      within 10
      Business
      Days after
      the date
which
      the
      2008
      Annual Report or 2009 Annual Report, as applicable, is
      filed
      with the Commission and otherwise in accordance with this Make Good Agreement.
      In
      the
      event that the After Tax Net Income reported in the 2008 Annual Report is less
      than the 2008 Guaranteed ATNI, the Company has agreed that Roth will
      provide prompt written instruction to Tri-State with regard to the distribution
      of certain make good shares in 2008 pursuant to the PIPE Make Good Escrow
      Agreement. In
      the
      event that the After Tax Net Income reported in the 2009 Annual Report is less
      than the 2009 Guaranteed ATNI or the Earnings Per Share reported in the 2009
      Annual Report is less than the 2009
      Guaranteed EPS,
      the
      Company has agreed that Roth will provides
      written instruction to Tri-State with regard to the distribution of certain
      make
      good shares in 2009 pursuant to the PIPE Make Good Escrow Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Once
      Roth
      makes such written instructions, the Escrow Agent herein will act in accordance
      with this Make Good Escrow Agreement. The Escrow Agent herein need only rely
      on
      the letter of instruction from Roth in
      that
      regard and notwithstanding anything to the contrary contained herein will
      disregard any contrary instructions. 

    

    In
      the
      event that the After Tax Net Income reported in the 2008 Annual Report is equal
      to or greater than the 2008 Guaranteed ATNI, Roth will provide written
      instructions to Tri-State for the release of certain make good share of 2008
      under the PIPE Make Escrow Agreement to Mr. Kunio Yamamoto. 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 and the Earnings Per Share reported
      in the 2009 Annual Report is equal to or greater than the 2009
      Guaranteed EPS,
      Roth
      will
      provide written instructions to Tri-State for the release of the certain make
      good share of 2009 under the PIPE Make Good Escrow Agreement to Mr. Kunio
      Yamamoto. Once Roth provides such instructions pursuant to the PIPE Make Good
      Escrow Agreement, the Escrow Agent shall automatically release 2008 Make Good
      Shares and 2009 Make Good Shares to Make Good Pledgor under this Make Good
      Escrow Agreement. 

    

    For
      purposes hereof, “After
      Tax Net Income” shall mean the Company’s operating income after taxes for the
      fiscal year ending December 31, 2008 or December 31, 2009 (as relevant) in
      each
      case determined in accordance with GAAP as reported in the 2008 Annual Report
      or
      2009 Annual Report (as relevant). For purposes hereof, “Earnings
      Per Share” shall mean the Company’s After Tax Net Income (for the relevant
      fiscal year) divided by the weighted average number of shares of Common Stock
      of
      the Company outstanding during
      the calculation period, calculated on a fully diluted basis.

     

    b. Pursuant
      to Section 4(a), if Roth delivers a notice to Tri-State that the Escrow Shares
      under PIPE Make Good Escrow Agreement are to be transferred to HFG, then the
      Escrow Agent shall immediately forward either the 2008 Make Good Shares or
      2009
      Make Good Shares, as the case may be, to the Company’s Transfer Agent for
      reissuance to HFG in accordance with this Make Good Agreement. The Company
      covenants and agrees that upon any transfer of 2008 Make Good Shares or 2009
      Make Good Shares to HFG in accordance with this Make Good Agreement, the Company
      shall promptly instruct its Transfer Agent to reissue such 2008 Make Good Shares
      or 2009 Make Good Shares in HFG’s name and deliver the same, or cause the same
      to be delivered. If the Company does not promptly provide such instructions
      to
      the Transfer Agent of the Company, then HFG is hereby authorized to directly
      give such re-issuance instruction to the Transfer Agent of the Company. If
      a
      notice from Roth pursuant to Section 4(a) of the PIPE Make Good Escrow Agreement
      indicates that the escrow shares therein are to be returned to the Make Good
      Pledgor, then the Escrow Agent herein will promptly deliver either the 2008
      Make
      Good Shares or 2009 Make Good Shares, as the case may be, to the Make Good
      Pledgor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 HFG.
      The
      Company, Make Good Pledgor and HFG 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.
      Duration.
      This
      Make Good Agreement shall terminate upon the distribution of all the Escrow
      Shares in accordance with the terms of this Make Good Agreement. The Company
      agrees to promptly provide the Escrow 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 HFG pursuant to 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 HFG, 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 promptly reissues such Escrow Shares in the
      applicable Investor’s name and delivers the same as directed by such Investor.
      Until such time as (if at all) the Escrow Shares are required to be delivered
      pursuant to 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.

     

    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 each hereby authorized to institute an appropriate interpleader
      action upon receipt of a written letter of direction executed by the parties
      so
      directing 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
      Utah, and the Escrow Shares in dispute shall be deposited with the court and
      in
      such event 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c. The
      Company and Make Good Pledgor each hereby, jointly and severally, indemnify
      and
      hold harmless 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 HFG. 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 HFG, 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 HFG 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.
      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 HFG.
      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 HFG. This Make Good Agreement and the rights and obligations hereunder
      of
      the Make Good Pledgor may not be assigned by the 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 HFG. 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. 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 Utah. 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 Salt Lake City (the
      “Utah Courts”). Each party hereto hereby irrevocably submits to the exclusive
      jurisdiction of the Utah 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 Utah 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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      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    
      	 	 	 
	 	COMPANY:
	 	 
	 	FIRST GROWTH INVESTORS,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Gao
              Zhentao
	 	 	
              

              Name:
                Gao Zhentao

              Title:
                Director

            
	 	
              Address:

              301
                Hailong Street

              Hanting
                District, Weifang, Shandong Province, People's Republic of China
                261101

              Facsimile:
                86-536-7363788

              Attn.:
                President

              Email:
                zhangjinhua1688@126.com

            

    

    
      	 	 	 
	 	MAKE GOOD PLEDGOR:
	 
 	 
 	 
 
	
            	By:  	/s/ Yamamoto
              Kunio
	 	 	
              
 
	 	
              Mr. Kunio Yamamoto 

              
                Address:

                301
                  Hailong Street

                Hanting
                  District, Weifang, Shandong Province, People's Republic of
                  China

                c/o:
                  First Growth Investors, Inc.

                Telephone:
                  86 536 736 3688

              

            

    

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK -

    SIGNATURE
      PAGE FOR OTHER PARTIES FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              ESCROW
                AGENT:

            
	 	 	 
	 	Interwest Transfer Company,
              Inc.,
              as
              Escrow Agent
	 
 	 
 	 
 
	
            	By:  	/s/ 
              Kurtis Hughes
	 	 	
              
Name:
              Kurtis Hughes 
               Title:
                Vice President 

            
	 	
              Address:
                 

              1981
                East Murray Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City,
                

              Utah
                84117

              Attention:
                Kurtis Hughes 

              Telephone:
                (801)272 9294 

              Fax:
                (801)277-3147

            

    

    
      	 	 	 
	 	
              HFG
                INTERNATIONAL, LIMITED:

            
	 
 	 
 	 
 
	
            	By:  	/s/ Timothy
              P. Halter
	 	 	
              
Name:
              Timothy P. Halter
              Title:
                President

            
	 	 

              Address:
                c/o Deacons Law Firm

              5th
                Floor

              Alexandra
                House

              18
                Chater Road

              Central

              Hong
                Kong

              Facsimile:
                852-2810-0431

              Attn.:
                Sarah Wong

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A 

    

    ESCROW
      SHARES TO BE ISSUED TO HFG

    

      
        	
                Make
                  Good (2008)

              	
                Make
                  Good (2009)

              
	
                3,458,770

              	
                3,458,770

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Exhibit
      B

    

    FEE
      SCHEDULELOCK-UP
      AGREEMENT

    

    THIS
      LOCK-UP AGREEMENT (the "Agreement")
      is
      made and entered into on March
      12,
      2008
      between
      the stockholders set forth on the signature page to this Agreement (each, a
      "Holder")
      and
First
      Growth Investors, Inc., a Nevada corporation
      (the
      "Company").

    

    RECITALS

    

    A. The
      Company has determined that it is advisable and in its best interest to enter
      into that certain Securities Purchase Agreement, dated March 12, 2008 (the
      "Purchase
      Agreement")
      with
      the Investors named therein (the "Investors")
      and
      certain other parties named therein, pursuant to which the Company will issue
      and sell in a private offering securities of the Company (the "Offering").
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreement will have the meanings given such terms in the Purchase
      Agreement.

    

    B. In
      connection with the Offering, the Company has agreed to provide the Investors
      certain registration rights, and in furtherance thereof has agreed to file
      a
      registration statement to enable the Investors to resell certain of the
      securities subject of the Offering.

    

    C. It
      is a
      condition to the Investors' respective obligations to close under the Purchase
      Agreement and provide the financing contemplating by the Offering that the
      Holder execute and deliver to the Company this Agreement. 

    

    D. In
      contemplation of, and as a material inducement for the Investors to enter into,
      the Purchase Agreement, the Holder and the Company have each agreed to execute
      and deliver this Agreement. 

    

    NOW,
      THEREFORE, for and in consideration of the mutual covenants and agreements
      set
      forth herein, and other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties, intending to be
      legally bound, agree as follows:

    

    1. Effectiveness
      of Agreement.
      This
      Agreement shall become null and void if the Purchase Agreement is terminated
      prior to its Closing as to all Investors. 

    

    2. Representations
      and Warranties.
      Each of
      the parties hereto, by their respective execution and delivery of this
      Agreement, hereby represents and warrants to the others and to all third party
      beneficiaries of this Agreement that (a) such party has the full right, capacity
      and authority to enter into, deliver and perform its respective obligations
      under this Agreement, (b) this Agreement has been duly executed and delivered
      by
      such party and is the binding and enforceable obligation of such party,
      enforceable against such party in accordance with the terms of this Agreement
      and (c) the execution, delivery and performance of such party’s obligations
      under this Agreement will not conflict with or breach the terms of any other
      agreement, contract, commitment or understanding to which such party is a party
      or to which the assets or securities of such party are bound.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3. Beneficial
      Ownership.
      Holder
      hereby represents and warrants that it does not beneficially own (as determined
      in accordance with Section 13(d) of the Exchange Act of 1934, as amended, and
      the rules and regulations promulgated thereunder) any shares of Common Stock,
      or
      any economic interest therein or derivative therefrom, other than those shares
      of Common Stock specified on its signature page to this Agreement. For purposes
      of this Agreement the shares of Common Stock beneficially owned by such Holder
      as specified on its signature page to this Agreement are collectively referred
      to as the “Holder’s
      Shares.”

    

    4. Lockup.
      From
      and after the date of this Agreement and through and including the two year
      anniversary of the Closing Date (the "Lockup
      Period"),
      the
      Holder irrevocably agrees it will not offer, pledge, encumber, sell, contract
      to
      sell, sell any option or contract to purchase, purchase any option or contract
      to sell, grant any option, right or warrant to purchase or otherwise transfer
      or
      dispose of, directly or indirectly, or announce the offering of, any of its
      Holder’s Shares (including any securities convertible into, or exchangeable for,
      or representing the rights to receive, Holder’s Shares) or engage in any Short
      Sales with respect to any security of the Company. In furtherance thereof,
      the
      Company will (x) place a stop
      order with the Transfer Agent on all Holder’s Shares, including those which are
      covered by a registration statement, (y) notify its transfer agent in writing
      of
      the stop order and the restrictions on such Holder’s Shares under this Agreement
      and direct the transfer agent not to process any attempts by the Holder to
      resell or transfer any Holder’s Shares except in compliance with this Agreement.
      Notwithstanding the foregoing, each Holder may transfer any Holder's Shares
      by
      (a) bona fide gift or (b) will or intestate succession to his or her immediate
      family or to a trust the sole beneficiaries of which are one or more of the
      undersigned and his or her immediate family (the term "immediate family" meaning
      for these purposes the spouse, domestic partner, lineal descendant, father,
      mother or sibling of the undersigned), provided that each resulting transferee
      of such Holder's Shares executes and delivers to you an agreement satisfactory
      to you certifying that such transferee is bound by the terms of this Agreement
      and has been in compliance with the terms hereof since the date first above
      written as if it had been an original party hereto. For purposes hereof,
“Short
      Sales”
      include,
      without limitation, all “short sales” as defined in Rule 200 promulgated under
      Regulation SHO under the Exchange Act and all types of direct and indirect
      stock
      pledges, forward sale contracts, options, puts, calls, swaps and similar
      arrangements (including on a total return basis), and sales and other
      transactions through non-US broker dealers or foreign regulated
      brokers.

    

    5. Third-Party
      Beneficiaries.
      The
      Holder and the Company acknowledge and agree that this Agreement is entered
      into
      for the benefit of and is enforceable by the Investors and their successors
      and
      assigns. The Holder and the Company understand and agree that this Agreement
      is
      a material inducement to the willingness of the Investors to enter into the
      Purchase agreement and the transactions contemplated thereunder, that each
      of
      the Company and the Holder receive benefits as a result of the investment into
      the Company by the Investors. 

    

    6. No
      Additional Fees/Payment.
      Other
      than the consideration specifically referenced herein, the parties hereto agree
      that no fee, payment or additional consideration in any form has been or will
      be
      paid to the Holder in connection with this Agreement.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    7. Enumeration
      and Headings.
      The
      enumeration and headings contained in this Agreement are for convenience of
      reference only and shall not control or affect the meaning or construction
      of
      any of the provisions of this Agreement.

    

    8. Counterparts.
      This
      Agreement may be executed in facsimile and in any number of counterparts, each
      of which when so executed and delivered shall be deemed an original, but all
      of
      which shall together constitute one and the same agreement.

    

    9. Successors
      and Assigns.
      This
      Agreement and the terms, covenants, provisions and conditions hereof shall
      be
      binding upon, and shall inure to the benefit of, the respective heirs,
      successors and assigns of the parties hereto. 

    

    10. Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable for any
      reason, such provision will be conformed to prevailing law rather than voided,
      if possible, in order to achieve the intent of the parties and, in any event,
      the remaining provisions of this Agreement shall remain in full force and effect
      and shall be binding upon the parties hereto.

    

    11. Amendment.
      This
      Agreement may not be amended or modified in any manner except by a written
      agreement executed by each of the parties hereto if and only if such
      modification or amendment is consented to in writing by the Investors holding
      a
      majority in interest of the Common Stock issued or issuable under the Purchase
      Agreement. 

    

    12. Further
      Assurances.
      The
      Company and the Holder shall each do and perform, or cause to be done and
      performed, all such further acts and things, and shall execute and deliver
      all
      such other agreements, certificates, instruments and documents, as any Investor
      or the Transfer Agent or, in the case of the Holder, the Company may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    13. No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

    

    14. Remedies.
      The
      Company and the Investors shall have the right to specifically enforce all
      of
      the obligations of the Holder under this Agreement (without posting a bond
      or
      other security), in addition to recovering damages by reason of any breach
      of
      any provision of this Agreement and to exercise all other rights granted by
      law.
      Furthermore, each of the Company and the Holder recognize that if it fails
      to
      perform, observe, or discharge any of its obligations under this Agreement,
      any
      remedy at law may prove to be inadequate relief to the Company or the Investors.
      Therefore, the Holder agrees that each of the Company and the Investors shall
      be
      entitled to seek temporary and permanent injunctive relief in any such case
      without the necessity of proving actual damages and without posting a bond
      or
      other security.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    15. Governing
      Law.
      The
      terms and provisions of this Agreement shall be construed in accordance with
      the
      laws of the State of New York and the federal laws of the United States of
      America applicable therein. Each party agrees for its benefit and the benefit
      of
      the Investors (who are third party beneficiaries to the obligations of the
      Company and the Holder contained in this Agreement and this Section) as follows:
      (a) All Proceedings concerning the interpretations, enforcement and defense
      of
      the transactions contemplated by this Agreement shall be commenced exclusively
      in the New York Courts. Each party hereto hereby irrevocably submits to the
      exclusive jurisdiction of the New York Courts for the adjudication of any
      dispute hereunder or in connection herewith or with any transaction contemplated
      hereby or discussed herein, and hereby irrevocably waives, and agrees not to
      assert in any Proceeding, any claim that it is not personally subject to the
      jurisdiction of any such New York Court, or that such Proceeding has been
      commenced in an improper or inconvenient forum. (b) Each of the Company and
      the
      Holder hereby irrevocably waives personal service of process and consents to
      process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Agreement
      and agrees that such service shall constitute good and sufficient service of
      process and notice thereof. Nothing contained herein shall be deemed to limit
      in
      any way any right to serve process in any manner permitted by law. (c) Each
      of
      the Company and the Holder hereby irrevocably waive, to the fullest extent
      permitted by applicable law, any and all right to trial by jury in any legal
      proceeding arising out of or relating to this Agreement or the transactions
      contemplated hereby. (d) If any party or any Investor shall commence a
      Proceeding to enforce any provisions of this Agreement, then the prevailing
      party in such Proceeding shall be reimbursed by the other party (and in the
      case
      of an Investor bringing such a Proceeding, the Company and the Holder shall
      jointly and severally reimburse the Investor) for its reasonable attorneys’ fees
      and other costs and expenses incurred with the investigation, preparation and
      prosecution of such Proceeding.

    

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Agreement as of
      the
      day and year first above written.

    
      	 	 	 
	 	
            
	
            	By:  	/s/
               Yamamoto
              Kunio
	 	 	
              

              Name:
                Mr. Kunio Yamamoto

            
	 	 
	 	Number
              of shares
              of Common Stock
              beneficially owned:
	 	 
	 	112,571,424

    

     

    
      	 	 	 
	 	
              FIRST
                GROWTH INVESTORS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Gao
              Zhentao
	 	
              

              Name:
                Gao Zhentao

              Title:
                Director

            

    

     

    
      
         

      

      
        5

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