EXHIBIT 4.4
CONSULTING AGREEMENT
This consulting agreement (this "Agreement") is made the October 1, 2003 by and
between American Oriental Bioengineering Inc. (the "Company"), and Xx. Xxx Xxxx
Xxxx (the "Consultant").
RECITALS
WHEREAS, the Company wishes to engage the Consultant with respect to review,
implement and execute the internal control process of Company's corporate
governance system and other related issues;
WHEREAS, the Consultant is willing to provide his services to the Company
provided for in the Agreement as set forth below;
AGREEMENT
NOW THEREFORE, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, the parties hereto agree as follows:
1. TERM
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The term of this Agreement shall commence on the date hereof and end on
September 30, 2006.
2. CONSULTING SERVICES
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(a) Consulting Services. The review, implementation and monitoring of the
internal control process of Company's corporate governance system and other
related issues. ("Consulting Services"). The Consulting Services will be
performed with specific regard to the following:
1. Phase I - review the existing internal control system:
a) Gather data and information on the existing internal control system
for Harbin headquarter and branch offices located in different cities
and provinces over the whole China
b) Evaluate the existing system and make recommendations and redesign
some of the internal control processes if applicable.
2. Phase II - Implement the recommended processes
a) Establish the implementation plan for the internal control processes
so recommended
b) Evaluate the feasibility of the implementation plan and implement the
internal control system as planned
c) Evaluate the results and the effectiveness of the processes subsequent
to the implementation
3. Phase III - Monitor the execution and on-going compliance to the new
processes
(b) Compensation. In consideration of the consulting services set forth in
paragraph 2 (a), and subject to the terms and conditions set forth herein
the Company hereby agrees to issue to Consultant 70,000 shares of the
Company's Common stock (the "Shares") up front and register such shares at
the time of initial issuance, or immediately thereafter, on Form S-8 under
the Securities Exchange Act of 1934, as amended ("Exchange Act"). The same
number of shares is to be returned to the Company if the services provided
in Clause 2 do not satisfy the Company's requirements as further elaborated
in Exhibit.
(c) Issuance. Issuance and delivery of the Shares shall be immediately after
the full reporting date of the Company, at which time, the Company shall
deliver to the Consultant: (i) the certificate or certificates evidencing
the Shares to be issued to the Consultant and the respective dates,
registered in the name of the Consultant; and (ii) evidence that the Shares
have been registered on Form S-8 to be filed upon issuance of the Shares to
the Consultant, registering for resale thereof.
3. CONFIDENTIAL INFORMATION
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In connection with the providing of Consulting Services, hereunder, the
Consultant may come into contact with information concerning the Company which
the Company deems confidential (the Confidential Information"). The Consultant
understands and agrees that any Confidential Information disclosed pursuant to
this Agreement is secret, proprietary and of great value to the Company, which
value may be impaired if the secrecy of such information is not maintained. The
Consultant further agrees that he will take necessary security measures to
preserve and protect the secrecy of such Confidential Information, and to hold
such Confidential Information in strict confidence and not to disclose such
Confidential Information, either directly or indirectly to any person or entity
during the term of this agreement or any time following the expiration or
termination hereof; provided, however, that the Consultant may disclose the
Confidential Information to an assistant to whom disclosure is necessary for the
providing of Consulting Services under this Agreement provided that such
assistant enters into similar agreement to protect the Confidential Information.
4. REPRESENTATION AND WARRANTIES OF THE COMPANY
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The Company hereby represents and warrants to the Consultant that as of the date
hereof:
(a) Authorization and Validity of Shares. The Shares have been duly authorized
and are validly issued and outstanding, fully paid and non-assessable and
free of any preemptive rights. The Shares are not subject to any lien,
pledge, security interest or other encumbrance.
(b) Authorization of Agreement. The Company has taken all actions and has
obtained all consents or approvals necessary to authorize it to enter into
this Agreement.
(c) Registration. The Shares have been, or will be upon the filing of an S-8
Registration Statement, registered pursuant to the Securities Act.
5. INDEMNIFICATION
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(a) The Company shall indemnify the Consultant from and against any and all
expenses (including reasonable attorneys' fees), judgments, fines, claims,
cause of action, liabilities and other amounts paid (whether in settlement
or otherwise actually and reasonably incurred) by the Consultant in
connection with such action, suit or proceeding if (i) the Consultant was
made a party to any action, suit or proceeding by reason of the fact that
the Consultant rendered advice or services to the Company pursuant to this
Agreement, and (ii) the Consultant acted in good faith and in a manner
reasonably believed by the Consultant to be in or not opposed to the
interests of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause or believe his conduct was unlawful.
(b) The Consultant shall indemnify the Company from and against any and all
expenses (including attorney's fees), judgments, fines, claims, causes of
action, liabilities and other amounts paid (whether in settlement or
otherwise actually and reasonably incurred) by the Company in connection
with such action, suit or proceeding if (i) the Company was made a party to
any action, suit or proceeding by reason of the fact that the Consultant
rendered advice or services to the Company pursuant to this Agreement, and
(ii) the Consultant did not act in good faith and in a manner reasonably
believed by the Consultant to be in or not opposed to the interests of the
Company, and with respect to any criminal action or proceeding, did not
reasonably believe his conduct was lawful.
6. REPRESENTATION OF THE CONSULTANT
-----------------------------------
The Consultant represents that he is a qualified expert in his field in terms of
providing Consulting Services to the Company and his provision of the Consulting
Services is legal.
7. INDEPENDENT CONTRACTOR STATUS
--------------------------------
It is expressly understood and agreed that this is a consulting agreement only
and does not constitute an employer-employee relationship. The parties further
acknowledge that the Company's services hereunder are not exclusive, but that
the Consultant shall be performing services and undertaking other
responsibilities, for and with other entities or persons, which may directly or
indirectly compete with the Company.
8. NOTICE
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All notices provided by this Agreement shall be in writing and shall be given by
facsimile transmission, overnight courier, by registered mail or by personal
delivery, by one party to the other, addressed to such other party at the
applicable address set forth below, or to such other address as may be given for
such purpose by such other party by notice duly given hereunder. Notice shall be
deemed properly given on the date of the delivery.
To Consultant: Unit E, 26/Floor
XXX Xxxxx, 000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
To the Company: Xxxx X, 00/Xxxxx
XXX Xxxxx, 000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
9. MISCELLANEOUS
----------------
(a) Waiver. Any term or provision of this Agreement may be waived at any time
by the party entitled to the benefit thereof by a written instrument duly
executed by such party.
(b) Entire Agreement. This Agreement contains the entire understanding between
the parties hereto with respect to the transactions contemplated hereby,
and may not be amended, modified, or altered except by an instrument in
writing signed by the party against whom such amendment, modification, or
alteration is sought to be enforced. This Agreement supercedes and replaces
all other agreements between the parties with respect to any services to be
performed by the Consultant of behalf of the Company.
(c) Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, the United States of
America, without regard to its conflict of laws rules and principles.
(d) Each party hereby agrees to solve any dispute through friendly discussions
and arbitration in New York City pursuant to the rules of the American
Arbitration Association with one arbitrator jointly selected by the
parties. Arbitration shall be the exclusive and final remedy, the award of
which shall be final and enforceable against the parties.
(e) Binding Effect. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators,
successors and assigns.
(f) Construction. The captions and headings contained herein are inserted for
convenient reference only, are not a part hereof and the same shall not
limit or construe the provisions to which they apply. Reference in this
agreement to "paragraphs" are to the paragraphs in this Agreement, unless
otherwise noted.
(g) Expenses. Each party shall pay and be responsible for the cost and
expanses, including, without limitations, attorneys' fees, incurred by such
party in connection with negotiation, preparation and execution of this
Agreement and the transactions contemplated hereby.
(h) Assignment. No party hereto may assign any of its rights or delegate any of
its obligations under this Agreement without the express written consent of
the other party hereto.
(i) Counterparts. This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same agreement, binding upon both
parties hereto, not withstanding that both parties are not signatories to
the original or the same counterpart.
IN WITNESS WHEREOF, the parties have caused this CONSULTING AGREEMENT to be duly
executed as of the day and year first above written
AMERICAN ORIENTAL BIOENGINEERING INC.
By: /s/ Xxxxxx Xxx
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Xxxxxx Xxx
Chairman and CEO
XXX XXXX XXXX
/s/ Xxx Xxxx Xxxx
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EXHIBIT
Time Table of Consulting Services
By Xxx Xxxx Xxxx
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Period Services to be performed
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Oct to Dec 2003 Phase I - gather data and information on
existing internal control system
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Jan to Jun 2004 Phase I - evaluate the existing system and
make recommendations
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Jul to Dec 2004 Phase II - establish the implementation plan
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Jan to Jun 2005 Phase II - evaluate the feasibility of the
plan
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Jul to Dec 2005 Phase II - evaluate the results and
effectiveness
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Jan to Sept 2006 Phase III - monitor the execution and
on-going compliance
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