Initial consideration, contingent consideration, holdback provisions and etc.

Hi all,

recently, I have been studying the prospectus of a company listed on the NASDAQ and find out that there are so many specialized words, phrases or laws that I can't fully understand in the specific circumstances. Could you kindly guide me where or which websites could help me on further understanding those professional words, especially those frequently used in the SEC Act and Merge & Acquisition Transactions.

Here are some examples requiring your kind guidance:

1. As indicated in the paragraph below(Refer to the red texts), How should I interpret initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities? and what is the Transaction structures involving trusts, nominees and similar entities

Quoted: The new regulation allows PRC government agencies to assess the economic terms of a business combination transaction. Parties to a business combination transaction may have to submit to the Ministry of Commerce and other relevant government agencies an appraisal report, an evaluation report and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the transaction. The regulations also prohibit a transaction at an acquisition price obviously lower than the appraised value of the PRC business or assets and in certain transaction structures, require that consideration must be paid within defined periods, generally not in excess of a year.

The regulation also limits our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete a business combination transaction on financial terms that satisfy our investors and protect our stockholders’ economic interests.

2. As indicated below, what does "the make good obligations" mean and what is "a make good escrow agreement" (e.g. the content, purpose and origin if possible)?

Quoted: In connection with the private placement, on May 14, 2007, our stockholders Karmen Investment Holdings Ltd. and Leguna Verde Investments Ltd. placed a total of 3,888,890 shares of our common stock held by them into an escrow account to secure the make good obligations described below on behalf of the investors in the private placement, pursuant to a make good escrow agreement, or the Make Good Agreement, entered into among us, Karmen Investment Holdings Ltd., Leguna Verde Investments Ltd., Securities Transfer Corporation, the escrow agent, and the investors.

3. what details "penny stock regulation" and how this regulation works to restrict the liquidity of the common stock?

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.