Document:

Exhibit
      10.2

     

    MAKE
      GOOD ESCROW AGREEMENT 

     

    This
      Make
      Good Escrow Agreement (the "Make Good Agreement"), dated effective as of May
      3,
      2007, is entered into by and among Millennium Quest, Inc., a Delaware
      corporation (the "Company"), Sterne Agee & Leach, Inc., as agent (“Sterne”),
      Hisashi Akazawa and Si Chen, each in their individual capacities (each a "Make
      Good Pledgor" and together the "Make Good Pledgors"), 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 May 3,
      2007
      (the "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 Purchase Agreement, Make Good Pledgors agreed to place
      the
      Escrow Shares (as defined in Section 3 hereto) into escrow for the benefit
      of
      the Investors in the event the Company fails to satisfy certain After-Tax Net
      Income thresholds. 

     

    WHEREAS,
      pursuant to the requirements of the Purchase Agreement, the Company and Make
      Good Pledgors have agreed to establish an escrow on the terms and conditions
      set
      forth in this Make Good Agreement; 

     

    WHEREAS,
      Sterne has agreed to act as agent for the Investors in connection with this
      Make
      Good Agreement pursuant to the terms and conditions of that certain Agency
      Agreement, dated as of the date hereof, by and among Sterne and the Investors;
      and

     

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

     

    2.
      Appointment
      of Escrow Agent.
      Make
      Good Pledgors, Agent 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. 

     

    3.
      Establishment
      of Escrow.
      Upon
      the execution of this Make Good Agreement, Make Good Pledgors shall deliver,
      or
      cause to be delivered, to the Escrow Agent certificates evidencing a number
      of
      shares of the Series B Preferred Stock equal to the 2007 Make Good Shares and
      the 2008 Make Good Shares, along with undated stock powers
      with Medallion guarantees, in the form and number acceptable to the Investors
      in
      their reasonable discretion, (or such other signed instrument of transfer
      acceptable to the Company’s Transfer Agent (as defined in Section 5a below)).
      The 2007 Make Good Shares and the 2008 Make Good Shares are collectively
      referred to as the “Escrow Shares”.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.
      Representations
      of Make Good Pledgors.
      Each
      Make Good Pledgor hereby represents and warrants to Sterne and the Investors
      as
      follows: 

     

    a. Such
      Make
      Good Pledgor has all individual power and authority to enter into this Agreement
      and to carry out its obligations hereunder. This Agreement has been duly
      executed by such Make Good Pledgor, and when delivered by such Make Good Pledgor
      in accordance with the terms hereof, will constitute the valid and legally
      binding obligation of such Make Good Pledgor, enforceable against it in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.
      

     

    b. Immediately
      prior to the closing of the transactions under the Share Exchange Agreement,
      Hisashi Akazawa was the sole record and beneficial owner of all of the
      outstanding capital shares of Lorain, as the term beneficial owner is defined
      under Rule 13d-3(d) under the Exchange Act, free and clear of all pledges,
      liens
      and encumbrances. Hisashi Akazawa is the sole record owner, and Hisashi Akazawa
      and Si Chen are the sole beneficial owners of the Escrowed Shares, as the term
      beneficial owner is defined under Rule 13d-3(d) under the Exchange Act, free
      and
      clear of all pledges, liens and encumbrances. 

     

    c. All
      of
      the Escrow Shares are, and as to any Underlying Shares when issued upon
      conversions will be, 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 Investors hereunder, Investors will receive full
      right, title and authority to such shares as holders of Common Stock of the
      Company.

     

    d. 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 Pledgors pursuant
      to the terms of any indenture, mortgage, deed of trust or other agreement or
      instrument binding upon Make Good Pledgors, other than such breaches, defaults
      or liens which would not have a material adverse effect taken as a whole.

     

    5.
      Disbursement
      of Escrow Shares.
      

     

    a. Fiscal
      Year Ended December 31, 2007.
      Make
      Good Pledgors agree that that if the After-Tax Net Income for the fiscal year
      ended December
      31, 2007
      reported
      in the Company’s 2007 Annual Report, and as adjusted in accordance with Section
      5.2(d) of the Purchase Agreement, is less than the 2007 Guaranteed ATNI,
Sterne
      shall provide written instruction (with a copy to the Company) to the Escrow
      Agent to instruct
      the
      Company’s transfer agent (“Transfer Agent”) to transfer to each Investor their
      pro rata share of the 2007 Make Good Shares as determined under Section 5.2(e)
      of the Purchase Agreement. The Escrow Agent need only rely on the letter of
      instruction from Sterne in this regard and will disregard any contrary
      instructions. The Escrow Agent shall be entitled to rely on the calculations
      provided by Sterne in releasing the Escrow Shares for disbursement, with no
      further responsibility to calculate or confirm amounts. If the Company’s 2007
      Annual Report reflect that the 2007 Guaranteed ATNI has been achieved, no
      transfer of the 2007 Make Good Shares shall be required by this Section and
      Sterne shall provide written instruction (with a copy to the Company) to the
      Escrow Agent to return all 2007 Make Good Shares deposited with the Escrow
      Agent
      to the Make Good Pledgors within seven Business Days after the date which the
      2007 Annual Report is filed with the Commission, provided that Escrow Agent
      is
      given notice by Sterne of the 2007 Annual Report’s filing and results. Subject
      to the timing of the Transfer Agent, transfers of 2007 Make Good Shares required
      under this Section shall be made to Investors within seven Business Days after
      the date which the 2007 Annual Report is filed with the Commission, provided
      that Escrow Agent is given notice by Sterne of the 2007 Annual Report’s filing
      and results. 

     

    
      
         

      

      
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    b. Fiscal
      Year Ending December 31, 2008.
      The
      Make Good Pledgors agree that if the Company’s After-Tax Net Income for the
      fiscal year ended December 31, 2008 reported in the Company’s 2008 Annual
      Report, and as adjusted in accordance with Section 5.2(d) of the Purchase
      Agreement, is less than the 2008 Guaranteed ATNI, Sterne shall provide written
      instruction (with a copy to the Company) to the Escrow Agent to instruct the
      Transfer Agent to transfer to each Investor their pro rata share of the 2008
      Make Good Shares as determined under Section 5.2(e) of the Purchase Agreement.
      The Escrow Agent need only rely on the letter of instruction from Sterne in
      this
      regard and will disregard any contrary instructions. The Escrow Agent shall
      be
      entitled to reply on the calculations provided by Sterne in releasing the Escrow
      Shares for disbursement, with no further responsibility to calculate or confirm
      amounts. If the Company’s 2008 Annual Report reflect that the 2008 Guaranteed
      ATNI has been achieved, no transfer of the 2008 Make Good Shares shall be
      required by this Section and Sterne shall provide written instruction (with
      a
      copy to the Company) to the Escrow Agent to return all 2008 Make Good Shares
      deposited with the Escrow Agent to the Make Good Pledgors within seven Business
      Days after the date which the 2008 Annual Report is filed with the Commission,
      provided that Escrow Agent is given notice by Sterne of the 2008 Annual Report’s
      filing and results. Subject to the timing of the Transfer Agent, transfers
      of
      2008 Make Good Shares required under this Section shall be made to Investors
      within seven Business Days after the date which the 2008 Annual Report is filed
      with the Commission, provided that Escrow Agent is given notice by Sterne of
      the
      2008 Annual Report’s filing and results. 

     

    c. In
      connection with the foregoing, Make Good Pledgors agree that within one business
      day following execution of the Purchase Agreement, Make Good Pledgors will
      deposit the 2007 Make Good Shares and 2008 Make Good Shares into escrow in
      accordance with this Agreement along with undated stock powers with Medallion
      guarantees (or with such other instruments of transfer as in accordance with
      the
      requirements of the Company’s transfer agent), in the form and number acceptable
      to the Investors in their reasonable discretion, and the handling and
      disposition of the 2007 Make Good Shares and 2008 Make Good Shares in accordance
      with Section 5(a) and 5(b) of this Agreement. The parties hereby agree that
      the
      Investors shall not have the right to assign its rights to receive all or any
      2007 Make Good Shares and 2008 Make Good Shares in conjunction with negotiated
      sales or transfers of any of its Shares or, in the case of their conversion,
      Underlying Shares ( collectively, the “Securities”). 

     

    
      
         

      

      
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    d. The
      parties hereby agree that the Make Good Pledgors’ obligation to transfer Escrow
      Shares to the Investors pursuant to Section 5.2 of the Purchase Agreement shall
      not continue to run to the benefit of any Securities transferred or sold by
      the
      Investors prior to a Make Good Determination Date. In the event an Investor
      transfers or sells prior to the Make Good Determination Date relating to the
      2008 Make Good Shares a portion of its Securities, the Escrow Agent shall,
      upon
      instruction from Sterne, return to the Make Good Pledgors a portion of 2008
      Make
      Good Shares and, if the Investor transfer or sale takes place prior to the
      Make
      Good Determination Date relating to the 2007 Make Good Shares, a portion of
      the
      2007 Make Good Shares equal to the initial number of 2008 Make Good Shares
      and,
      if appropriate, 2007 Make Good Shares multiplied by a fraction the numerator
      of
      which is the number of Securities involved in the particular Investor sale
      or
      transfer and denominator is the total amount of Securities originally purchased
      by all Investors under Purchase Agreement. Any of the Escrowed Shares to
      returned to the Make Good Pledgors hereunder shall,
      subject
      to the timing of the Transfer Agent, be returned to the Make Good Pledgors
      within seven Business Days after the date which the Company’s 2007 Annual Report
      or 2008 Annual Report, as applicable, is filed with the Commission.
      Sterne
      shall provide Escrow Agent with specific notice of those Escrow Shares which
      shall be delivered back to the Make Good Pledgors for the above-listed reason.
      Escrow Agent will in turn notify the Transfer Agent of such instructions. Escrow
      Agent shall under no circumstances be responsible for instructions it does
      not
      receive or instructions it receives after Escrow Agent has instructed the
      Transfer Agent.

     

    e. The
      Escrow Agent covenants and agrees that upon any transfer of 2007 Make Good
      Shares or 2008 Make Good Shares to the Investors in accordance with this
      Agreement, the Escrow Agent shall promptly instruct the Transfer Agent to
      reissue such 2007 Make Good Shares or 2008 Make Good Shares in the applicable
      Investor’s name and deliver the same as directed by such Investor.

     

    f. The
      Company and Made Good Pledgors 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 and Make
      Good Pledgors 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.

     

    
      
         

      

      
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    g. The
      Company and the Escrow Agent covenant and agree to provide, and cause others
      under their control to provide, to Sterne, on a timely basis, any documents
      or
      information Sterne may require in its reasonable discretion in order to carry
      out and enforce the terms and duties under this Make Good Agreement.

     

    6.
      Duration.
      This
      Make Good Agreement shall terminate on the sooner of (i) the distribution of
      all
      the Escrow Shares or (ii) June 30, 2009. 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.

     

    7.
      Escrow
      Shares.
      If any
      Escrow Shares are deliverable to the Investors pursuant to the Purchase
      Agreement and in accordance with this Make Good Agreement, (i) Make Good
      Pledgors 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
      Pledgors to the Investors, to the extent not done so in accordance with Section
      5, and (ii) following its receipt of the documents referenced in Section 5,
      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 the Purchase Agreement and in accordance with this Make Good
      Agreement, any dividends payable in respect of the Escrow Shares and all voting
      rights applicable to the Escrow Shares shall be retained by Make Good Pledgors.
      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 Pledgors and shall not be invested or held for any time longer than is
      needed to effectively re-route such items to the Make Good
      Pledgors.

     

    8.
      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 Sterne 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 Sterne 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 Sterne. If Escrow
      Agent or Sterne 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 8 shall be filed
      in any court of competent jurisdiction in the State of New York or the State
      of
      California, and the Escrow Shares in dispute shall be deposited with the court
      and in such event Escrow Agent and Sterne 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. 

     

    
      
         

      

      
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    9.
      Exculpation
      and Indemnification of Escrow Agent and Sterne.
      

     

    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. Sterne’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 5 hereof)
      directing the distribution of the Escrow Shares. Sterne will provide such
      written instructions upon review of the relevant earnings per share and/or
      After-Tax Net Income amount reported in such periodic financial reports as
      specified in Section 5 hereof. Sterne 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 (other than Sterne)
      in
      connection with such financial reports of the Company, Sterne shall have no
      obligation or liability to any party hereunder.

     

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

     

    
      
         

      

      
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    c. The
      Company and Make Good Pledgors each hereby, jointly and severally, indemnify
      and
      hold harmless each of Escrow Agent, Sterne 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 Sterne 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 Sterne
      hereunder; except, that if Escrow Agent or Sterne is guilty of willful
      misconduct or gross negligence under this Make Good Agreement, then Escrow
      Agent
      or Sterne, 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 Sterne 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 Sterne, 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. 

     

    10.
      Compensation
      of Escrow Agent.
      Escrow
      Agent shall be entitled to compensation for its services as stated in the fee
      schedule attached hereto as Exhibit
      A,
      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 prior to receiving written
      approval from the Company, which approval shall not be unreasonably
      withheld.

     

    
      
         

      

      
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    11.
      Resignation
      of Escrow Agent.
      At any
      time, upon ten (10) days' written notice to the Company, 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-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 may interplead the Escrow Shares
      into the registry of any court having jurisdiction. 

     

    12.
      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. 

     

    13.
      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.

     

    14.
      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. 

     

    15.
      Assignment
      and Modification.
      This
      Make Good Agreement and the rights and obligations hereunder of any of the
      parties hereto may not be assigned without the prior written consent of the
      other parties hereto. Subject to the foregoing, this Make Good Agreement will
      be
      binding upon and inure to the benefit of each of the parties hereto and their
      respective successors and permitted assigns. No other person will acquire or
      have any rights under, or by virtue of, this Make Good 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. This Make Good
      Agreement may be amended or modified only in writing signed by all of the
      parties hereto. 

     

    16.
      Applicable
      Law.
      This
      Make Good Agreement shall be governed by and construed in accordance with the
      laws of the State of New York without giving effect to the principles of
      conflicts of laws thereof. 

     

    
      
         

      

      
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    17.
      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.

     

    18.
      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.

     

    19.
      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 Escrow Agreement and shall have and succeed to the rights, powers, duties,
      immunities and privileges as its predecessor, without the execution or filing
      of
      any instrument or paper or the performance of any further act.

     

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

     

     

    
      	 	COMPANY:
	 	 
	 	
              MILLENNIUM QUEST, INC.

               

              By:/s/Si
                Chen    

              Name:
                Si Chen

              Title:
                Chief Executive Officer

              

              Address:

              Beihuan
                Zhong Road

              Junan
                County

              Shandong,
                China 276600

              Attn:
                Si Chen

              Facsimile:
                86-539-7314886

            
	 	 
	 	
              MAKE
                GOOD PLEDGORS

               

              Hisashi
                Akazawa:

               

              /s/Hisashi
                Akazawa   

               

              Address:

              Beihuan
                Zhong Road

              Junan
                County

              Shandong,
                China 276600

              Facsimile:
                86-539-7314886

               

              Si
                Chen:

               

              /s/Si
                Chen    

               

              Address:

              Beihuan
                Zhong Road

              Junan
                County

              Shandong,
                China 276600

              Facsimile:
                86-539-7314886

            

    

     

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      	 	ESCROW AGENT:
	 	 
	 	
              SECURITIES
                TRANSFER CORPORATION,
                as
                Escrow Agent

            
	 	 
	 	By:/s/Kevin
              B. Halter, Jr.  
                   
                Kevin B. Halter, Jr., President
                
                 

                Address:

                2591
                  Dallas Parkway Suite 102

                Frisco
                  Texas 75034

                Attn:
                  Kevin B. Halter, Jr.

                Facsimile:
                  (469) 633-0088

              

            
	 	 
	 	
              AGENT:

               

              STERNE
                AGEE & LEACH, INC.

               

              By:/s/Ryan
                Medo   

                   
                Ryan Medo,

                   
                Managing Director, Capital Markets

              

              Address:

              Sterne
                Agee & Leach, Inc.

              800
                Shades Creek Parkway, Suite 700

              Birmingham,
                Alabama 35209

              Attn:
                Ryan Medo

              Facsimile:
                (205) 949-3607Exhibit
      10.3

    CLOSING
      ESCROW AGREEMENT

    

    

    CLOSING
      ESCROW AGREEMENT,
      dated
      May 3, 2007 (“Escrow
      Agreement”),
      is
      entered into by and between Millennium Quest, Inc., a Delaware corporation
      (the
“Company”),
      Thelen Reid Brown Raysman & Steiner LLP (the “Escrow
      Agent”)
      and
      Sterne Agee & Leach, Inc., as agent (“Sterne
      Agee”).

    

    BACKGROUND

    

    Concurrently
      herewith the Company and Investors are entering into a Securities Purchase
      Agreement, dated as of the date hereof (the “Purchase
      Agreement”),
      pursuant to which each Investor (as defined therein) has agreed to purchase
      from
      the Company, and the Company has agreed to sell to each Investor, the number
      of
      Shares and Warrants identified therein (capitalized terms used and not otherwise
      defined herein shall have the meanings given such terms in the Purchase
      Agreement).

    

    Pursuant
      to the Purchase Agreement, the Company and the Investors have agreed to
      establish an escrow on the terms and conditions set forth in this Escrow
      Agreement and the Escrow Agent is willing to accept appointment as Escrow Agent
      for only the expressed duties outlined herein.

    

    NOW,
      THEREFORE,
      in
      consideration of the premises set forth above and other good and valuable
      consideration, the receipt of which is hereby acknowledged, the parties hereto
      agree as follows:

    

    1.
       Proceeds
      to be Escrowed. A
      copy of
      the Purchase Agreement is attached as Exhibit
      A.
      All
      amounts provided by the Investors in connection with their acquisition of the
      Shares and Warrants as set forth in the Purchase Agreement shall be deposited
      directly with the Escrow Agent in immediately available funds by federal wire
      transfer, such funds being referred to herein as the “Escrow
      Funds.”
The
      Escrow Funds shall be retained in escrow by the Escrow Agent in a separate
      account and invested as stated below. 

    

    2.
       Identity
      of Investors. Concurrent
      with the execution of the Escrow Agreement, the Company shall furnish to the
      Escrow Agent the information comprising the identity of the Investors in the
      format set forth in the “List
      of Investors”
      attached as Exhibit
      B,
      or in
      an electronic spreadsheet format with the same information. All Escrow Funds
      shall remain the property of the Investors and shall not be subject to any
      liens
      or charges by the Company or the Escrow Agent or judgments or creditors' claims
      against the Company, until released to the Company as hereinafter provided.
      Escrow Agent will not use the information provided to it by the Company for
      any
      purpose other than to fulfill its obligations as Escrow Agent. The Company
      and
      the Escrow Agent will treat all Investor information as
      confidential.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.
       Disbursement
      of Funds.

    

    (a) The
      Escrow Agent shall continue to hold the Escrow Funds delivered for deposit
      hereunder by an Investor until the earlier of: (1) receipt of a joint written
      notice from the Company and the Investors evidencing termination under Section
      7.5(a) of the Purchase Agreement, (2) receipt of a written notice from the
      Company or such Investor evidencing termination under Section 7.5(b) of the
      Purchase Agreement (each of (1) and (2), a “Termination
      Election”)
      and
      (3) receipt of both (x) written notice from the Company that the conditions
      to
      closing under Section 6.1 of the Purchase Agreement have been satisfied and
      (y)
      joint written notice from the Company and Sterne Agee, who acted as placement
      agent in connection with the transactions contemplated by the Purchase
      Agreement, to effect the Closing.

    

    (b) If
      the
      Escrow Agent receives a Termination Election prior to its receipt of the notices
      contemplated under Section 3(a)(3), then the Escrow Agent shall return the
      Escrow Funds delivered by such Investor as directed by such Investor. If the
      Escrow Agent receives the notices contemplated under Section 3(a)(3) prior
      to a
      Termination Election, then the Escrow Agent shall disburse the portion of the
      Escrow Funds for which the foregoing is the case in accordance with Exhibit
      C
      to this
      Escrow Agreement.

    

    4.
       Duty
      and Limitation on Liability of the Escrow Agent. The
      sole
      duty of the Escrow Agent shall be to receive the Escrow Funds and to hold them
      subject to release, in accordance herewith, and the Escrow Agent shall be under
      no duty to determine whether the Company is complying with requirements of
      the
      Escrow Agreement or the Purchase Agreement. The Escrow Agent may conclusively
      rely upon and shall be protected in acting upon any statement, certificate,
      notice, request, consent, order or other document believed by it to be genuine
      and to have been signed or presented by the proper party or parties. The Escrow
      Agent shall have no duty or liability to verify any such statement, certificate,
      notice, request, consent, order or other document, and its sole responsibility
      shall be to act only as expressly set forth in the Escrow Agreement. The Escrow
      Agent shall be under no obligation to institute or defend any action, suit
      or
      proceeding in connection with the Escrow Agreement unless first indemnified
      to
      its satisfaction. The Escrow Agent may consult counsel of its own choice with
      respect to any question arising under the Escrow Agreement and the Escrow Agent
      shall not be liable for any action taken or omitted in good faith upon advice
      of
      such counsel.

    

    In
      no
      event shall the Escrow Agent be liable, directly or indirectly, for any (a)
      damages or expenses arising out of the services provided hereunder, other than
      damages which result from the Escrow Agent’s gross negligence or willful
      misconduct or (b) special or consequential damages, even if the Escrow Agent
      has
      been advised of the possibility of such damages.

    

    The
      Escrow Agent shall be obligated only to perform the duties specifically set
      forth in this Escrow Agreement, which shall be deemed purely ministerial in
      nature, and shall under no circumstances be deemed to be a fiduciary to the
      Company, Sterne Agee or any other person. The Escrow Agent shall not assume
      any
      responsibility for the failure of the Company to perform in accordance with
      this
      Escrow Agreement. This Escrow Agreement sets forth all matters pertinent to
      the
      escrow contemplated hereunder, and no additional obligations of the Escrow
      Agent
      shall be implied by nor inferred from the terms of any other agreement,
      including, without limitation, the Purchase Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Under
      no
      circumstances shall the Escrow Agent be expected or required to use, risk or
      advance its own funds in the performance of its duties or exercise of its rights
      hereunder.

    

    The
      Investors (by agreeing to use this form of Closing Escrow Agreement) and Sterne
      Agee acknowledge that they are aware that the Escrow Agent has represented
      the
      Company in connection with the Purchase Agreement and this Escrow Agreement
      and
      that Escrow Agent may continue to represent the Company in that connection
      and
      in connection with the transactions contemplated by those agreements, including,
      but not limited to, in connection with any disputes that may arise under either
      of those agreements. The Escrow Agent shall not be precluded from or restricted
      from representing the Company or any of its affiliates or otherwise acting
      as
      attorneys for the Company or any of its affiliates in any matter, including,
      but
      not limited to, any court proceeding or other matter related to the Purchase
      Agreement or the transactions contemplated by the Purchase Agreement, or this
      Escrow Agreement or the Escrow Funds, whether or not there is a dispute between
      the Investors, Sterne Agee and/or the Company with respect to any such
      matter.

    

    5.
       Interpleader.
      The
      Escrow Agent may at any time commence an action in the nature of interpleader
      or
      other legal proceedings and may deposit the Escrow Deposit with the clerk of
      the
      court. In the event of any dispute regarding who is entitled to the Escrow
      Deposit at any time, the Escrow Agent may determine not to release the Escrow
      Deposit to either any Investor or the Company and may commence an interpleader
      action as aforesaid or may cause the Escrow Deposit to be deposited with a
      court
      of competent jurisdiction whereupon it shall cease to have any further
      obligation hereunder. Upon any delivery or deposit of the Escrow Deposit as
      provided in this Section 5, the Escrow Agent shall be released and discharged
      from any further obligation under this Agreement.

    

    6.
       Investment
      of Proceeds.  The
      Escrow Funds shall be credited by Escrow Agent and recorded in a non-interest
      bearing escrow account. The
      Company agrees to indemnify and hold Escrow Agent harmless from and against
      any
      taxes, additions for late payment, interest, penalties and other expenses that
      may be assessed against Escrow Agent on or with respect to any payment or other
      activities under this Escrow Agreement unless any such tax, addition for late
      payment, interest, penalties and other expenses shall arise out of or be caused
      by the gross negligence or willful misconduct of the Escrow Agent.

     

    The
      Company acknowledges that Escrow Agent is not providing investment supervision,
      recommendations or advice.

     

    7.
       Notices.
      All
      notices, requests, demands and other communications under the Escrow Agreement
      shall be in writing and shall be deemed to have been duly given (a) on the
      date
      of service if served personally on the party to whom notice is to be given,
      (b)
      on the day of transmission if sent by facsimile/email transmission to the
      facsimile number/email address given below, and telephonic confirmation of
      receipt is obtained promptly after completion of transmission, (c) on the day
      after delivery to Federal Express or similar overnight courier or the Express
      Mail service maintained by the United States Postal Service or (d) on the fifth
      day after mailing, if mailed to the party to whom notice is to be given, by
      first class mail, registered or certified, postage prepaid, and properly
      addressed, return receipt requested, to the party as follows:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	 If to the Company:	Millennium Quest, Inc.
              Beihuan
                Road

              Junan
                County

              Shandong,
                China 276600

              Attn:
                Mr. Si Chen, Chairman and Chief Executive Officer

              Facsimile:
                (0086539) 7314886 7311026

            
	 	 	
               

            
	 	 If to Escrow
              Agent:	Thelen Reid Brown Raysman & Steiner
              LLP
              701
                8th
                Street NW

              Washington,
                D.C. 20001

              Attn.:
                Louis A. Bevilacqua, Esq.

              Facsimile:
                (202) 508-4321

            
	 	 	 
	 	 If to Sterne Agee:	
              Sterne
                Agee & Leach, Inc.,

              2901
                W. Coast Highway, Ste. 230
                
                Newport
                  Beach, CA 92663

                Attn:
                  Patrick L. Winton

                Facsimile:
                  (949) 270-2936

              

            
	 	 	 
	 	 If to an Investor:	To
              the address set forth under such Investor’s name on  its
              signature page to the Purchase Agreement.

    

     

    Any
      party
      may change its address for purposes of this paragraph by giving the other party
      written notice of the new address in the manner set forth above.

    

    8.
       Indemnification
      of Escrow Agent. The Company
      hereby indemnifies and holds harmless the Escrow Agent from and against any
      and
      all loss, liability, cost, damage and expense, including, without limitation,
      reasonable counsel fees, which the Escrow Agent may suffer or incur by reason
      of
      any action, claim or proceeding brought against the Escrow Agent arising out
      of
      or relating in any way to the Escrow Agreement or any transaction to which
      the
      Escrow Agreement relates unless such action, claim or proceeding is the result
      of the willful misconduct or gross negligence of the Escrow Agent. For this
      purpose, the term "attorneys' fees" includes fees payable to any counsel
      retained by the Escrow Agent in connection with its services under this
      Agreement and, with respect to any matter arising under this Escrow Agreement
      as
      to which the Escrow Agent performs legal services, if and to the extent that
      the
      Escrow Agent itself is a law firm, its standard hourly rates and charges then
      in
      effect. All of the Escrow Agent's rights of indemnification provided for in
      this
      Escrow Agreement shall survive the resignation of the Escrow Agent, its
      replacement by a successor Escrow Agent, its delivery or deposit of the Escrow
      Funds in accordance with this Escrow Agreement, the termination of this Escrow
      Agreement, and any other event that occurs after this date.

    

    9.
       Successors
      and Assigns. Except
      as
      otherwise provided in the Escrow Agreement, no party hereto shall assign the
      Escrow Agreement or any rights or obligations hereunder without the prior
      written consent of the other parties hereto, and any such attempted assignment
      without such prior written consent shall be void and of no force and effect.
      The
      Escrow Agreement shall inure to the benefit of and shall be binding upon the
      successors and permitted assigns of the parties hereto.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10. Governing
      Law; Jurisdiction. The
      Escrow Agreement shall be construed, performed and enforced in accordance with,
      and governed by the internal laws of the State of New York, without giving
      effect to the principles of conflicts of laws thereof.

    

    11.
      Severability. In
      the
      event that any part of the Escrow Agreement is declared by any court or other
      judicial or administrative body to be null, void, or unenforceable, said
      provision shall survive to the extent it is not so declared, and all of the
      other provisions of the Escrow Agreement shall remain in full force and
      effect.

    

    12.
      Amendments; Waivers. The
      Escrow Agreement may be amended or modified, and any of the terms, covenants,
      representations, warranties or conditions hereof may be waived, only by a
      written instrument executed by each of the Company, the Escrow Agent and Sterne
      Agee. Any waiver by any party of any condition or of the breach of any
      provision, term, covenant, representation or warranty contained in the Escrow
      Agreement, in any one or more instances, shall not be deemed to be nor construed
      as further or continuing waiver of any such condition, or of the breach of
      any
      other provision, term, covenant, representation or warranty of the Escrow
      Agreement.

    

    13.
      Entire Agreement. The
      Escrow Agreement contains the entire understanding among the parties hereto
      with
      respect to the escrow contemplated hereby and supersedes and replaces all prior
      and contemporaneous agreements and understandings, oral or written, with regard
      to such escrow.

    

    14.
      Section Headings. The
      section headings in the Escrow Agreement are for reference purposes only and
      shall not affect the meaning or interpretation of the Escrow
      Agreement.

    

    15.
      Counterparts. The
      Escrow Agreement may be executed in counterparts, each of which shall be deemed
      an original, but all of which shall constitute the same instrument.

    

    16.
      Resignation. Escrow
      Agent may resign upon 30 days advance written notice to the Company. If a
      successor escrow agent is not appointed within the 30-day period following
      such
      notice, Escrow Agent may petition any court of competent jurisdiction to name
      a
      successor escrow agent or interplead the Escrow Funds with such court, whereupon
      Escrow Agent’s duties hereunder shall terminate.

    

    17.
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto, the Investors
      and
      their respective successors and permitted assigns and is not for the benefit
      of,
      nor may any provision hereof be enforced by, any other person or
      entity.

    

    

    [Signature
      page follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused the Escrow Agreement to be executed the day and
      year
      first set forth above.

    

    

    MILLENNIUM
      QUEST, INC.

     

    /s/Si
      Chen    

    By:
      Si
      Chen

    Its:
      Chief Executive Officer

     

    

    THELEN
      REID BROWN RAYSMAN & STEINER LLP

    

    By:
      /s/Louis
      A. Bevilacqua  

    Name:
      Louis A. Bevilacqua

    Title:
      Partner

    
 

    STERNE
      AGEE & LEACH, INC.

     

    /s/Ryan
      Medo    

    By:
      Ryan
      Medo

    Its:
      Managing Director, Capital Markets

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