Exhibit 10.1
FINANCIAL ADVISORY AGREEMENT
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THIS FINANCIAL ADVISORY AGREEMENT ("Agreement") is made and entered
into on this the 26th day of September 2005, by and between HFG International,
Limited, a Hong Kong corporation ("HFG"), and Eastern Nano-Materials Holdings
Limited, a company organized under the laws of the Republic of Singapore (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company desires to engage HFG to provide certain financial
advisory and consulting services as specifically enumerated below commencing as
of the date hereof related to the Financing, the Restructuring, the Going Public
Transaction and the Post-Transaction Period (each as hereinafter defined), and
HFG is willing to be so engaged;
NOW, THEREFORE, for and in consideration of the covenants set forth
herein and the mutual benefits to be gained by the parties hereto, and other
good and valuable consideration, the receipt and adequacy of which are now and
forever acknowledged and confessed, the parties hereto hereby agree and intend
to be legally bound as follows:
1. Retention. As of the date hereof, the Company hereby retains and HFG
hereby agrees to be retained as the Company's exclusive financial advisor during
the term of this Agreement. The Company acknowledges that HFG shall have the
right to engage third parties with the Company's permission to assist it in its
efforts to satisfy its obligations hereunder. In its capacity as a financial
advisor to the Company, HFG will:
A. Restructuring and Going Public Transaction.
(i) consult on the implementation of a restructuring plan (the
"Restructuring") resulting in an organizational structure that will
allow the Company to complete the Going Public Transaction;
(ii) assist the Company in evaluating the manner of effecting
a going public transaction with a public shell corporation domiciled in
the United States of America and quoted on the "OTC BB" (a "Going
Public Transaction") resulting in HFG, its affiliates, participants in
the Financing and the minority shareholders of the public shell
corporation retaining control of 5.8 percent (5.8%) of all the issued
and outstanding stock of the public company following consummation of
the Financing and the Going Public Transaction. The Company
acknowledges that it has presented HFG with financial projections (the
"Projections") indicating that the Company will report net income of
approximately $10 million USD for the first three quarters of fiscal
2005 (the "Projected NI"). The Company agrees that in the event it
fails to meet the Projected NI, HFG shall have the right, in its sole
discretion, to renegotiate its terms.
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(iii) assist the Company in a capital raising transaction (a
"Financing") as permitted by applicable law and in accordance with the
terms of that certain Financing Agreement (the "Financing Agreement")
attached hereto as Exhibit "A".
B. Post Transaction Period
Upon consummation of the Going Public Transaction, HFG agrees to:
(i) coordinate and supervise a training program for the
purpose of facilitating new management's operation of the public
company;
(ii) if necessary, facilitate the preparation of an
information statement to be filed with the SEC to change the public
company's name and to in turn assist in obtaining a new CUSIP number
and stock symbol for the public company;
(iii) assist in developing and implementing the public
company's investor relations efforts, which shall include (a)
establishing a program for communicating with brokerage professionals,
investment bankers and market makers; (b) creating a complete investor
relations strategy to be implemented in English and Chinese; and (c)
assisting in the preparation and dissemination of press releases (the
Company agrees that all costs and expenses charged by investor
relations and press relations firms introduced by HFG and engaged by
the public company will be the sole responsibility of the public
company);
(iv) provide assistance and guidance in the preparation and
assembly of application materials for the listing of the public
company's common stock on a national exchange or quotation medium that
shall necessarily be limited to the American Stock Exchange or the
NASDAQ Stock Market; and
(v) provide the public company with such additional financial
advisory services as may be reasonably requested, to the extent HFG has
the expertise or legal right to render such services.
2. Authorization. Subject to the terms and conditions of this
Agreement, the Company hereby appoints HFG to act on a best efforts basis as its
consultant during the Authorization Period (as hereinafter defined). HFG hereby
accepts such appoint, with it being expressly acknowledged that HFG is acting in
the capacity of independent contractor and not as agent of either the Company,
affiliates of the Company resulting from the Restructuring, or the public
company.
In addition, except in the event of an act constituting either willful
misconduct or gross negligence on the part of HFG, the Company agrees that it
will not hold HFG responsible in the event that either the Restructuring, the
Financing or the Going Public Transaction is not consummated, nor shall it hold
HFG liable for any damages suffered by the Company as a result of the Company's
inability to consummate either the Restructuring, the Financing or the Going
Public Transaction. It is expressly acknowledged by the Company that HFG shall
not render legal or accounting advice in connection with the services to be
provided herein. HFG shall have the right to recommend the legal and accounting
professionals for the transactions contemplated herein.
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3. Authorization Period. HFG's engagement hereunder shall become
effective on the date hereof (the "Effective Date") and will automatically
terminate (the "Termination Date") on the first to occur of the following: (a)
either party exercises there right of termination under Section 5. hereof, (b)
the Company's breach of its covenants set forth in Section 6. hereof, (c) 4
months from the Effective Date, (d)the Company finds out that the public shell
corporation bears any liability and going on lawsuits. This Agreement may be
extended beyond the Termination Date if both parties mutually agree in writing.
Except as to certain obligations of the Company under Section 4. hereof, this
Agreement shall also terminate immediately upon the mutual decision of the
parties not to move forward with the Restructuring, the Financing or the Going
Public Transaction.
4. Fees and Expenses. Within 10 working days of the execution of this
Agreement, the Company shall deliver to HFG via wire transferred funds the
non-refundable deposit of US $20,000. Simultaneous with the closing of the Going
Public Transaction, the Company shall pay to HFG an additional fee of US
$430,000 (the "Fee"), via wire transferred funds.
In addition, the Company shall reimburse HFG for all documented travel
and lodging expenses incurred by HFG personnel during the term of this
Agreement. Prior to any incurrence of related expenses, HFG shall seek the
Company's permission. Costs for first -class air travel shall not be reimbursed.
Reimbursement is to be made within 10 days of receipt of a written request for
reimbursement submitted to the Company.
5. Due Diligence and Auditabilty. HFG shall have the right to perform a
due diligence investigation of the Company that demonstrates to HFG's sole
satisfaction that the Company is a suitable candidate for the Going Public
Transaction, which due diligence investigation shall include consultation with
the Company's independent audit firm regarding the auditablity of the Company in
accordance with US GAAP.
For its due diligence to be performed, HFG shall be entitled to fee
compensation of $30,000 (the "Diligence Fee"). Within 7 working days of the
execution of this Agreement, the Company shall pay $10,000 of the Diligence Fee.
Upon the delivery of the draft of due diligence report, the Company shall pay
another $10,000 toward the Diligence Fee. Upon the delivery of the final report,
the Company shall pay the final $10,000 of the Diligence Fee. All the payments
shall be transferred into RMB according to the exchange rate of paid date to
HFG'S official account
HFG shall have the right to terminate this Agreement in the event it
determines that there exists a material and non-curable due diligence matter.
The Company shall also have the right to perform a due diligence investigation
of the public company.
6. Representations and Covenants. The Company represents and covenants
that it will complete both the Financing and the Going Public Transaction if
subscriptions equaling the minimum amount of the offering contemplated by the
Financing Agreement are received.
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7. Indemnification. The parties hereto shall indemnify each other to
the extent provided for in this paragraph. Except as a result of an act of gross
negligence or willful misconduct on the part of a party hereto, no party shall
be liable to another party, or its officers, directors, employees, shareholders
or affiliates, for any damages sustained as a result of an act or omission taken
or made under this Agreement. In those cases where gross negligence or willful
misconduct of a party is alleged and proven, the non-damaged party agrees to
defend, indemnify and hold the damaged party harmless from and against any and
all reasonable costs, expenses and liabilities suffered or sustained as a result
of the act of gross negligence or willful misconduct
8. Governing Law. This Agreement shall be governed by the laws of the
Peoples Republic of China and any dispute arising hereunder shall be submitted
for binding arbitration to the China Foreign Trade Commission Arbitration
Committee in Beijing.
It is understood that this Agreement will be prepared and executed in
both the English and Chinese languages, with both versions having legal
efficacy. If a dispute arises as to the interpretation of a particular provision
of this Agreement because of differences between the Chinese and English
languages, the dispute shall be resolved in accordance with the provisions of
the Chinese version.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
HFG:
HFG International, Limited
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx,
Its:President
The Company:
Eastern Nano-Materials Holdings Limited
By: /s/ Xxxxxxxx Xxxx
------------------------------------
Xxxxxxxx Xxxx
Its:CEO
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ASSIGNMENT AGREEMENT
THIS ASSIGNEMENT AGREEMENT ("Agreement") is made and entered into on
this the 29th day of March, 2006, by and among between HFG International,
Limited, a Hong Kong corporation ("HFG"), Eastern Nano-Materials Holdings
Limited, a corporation organized under the laws of the Republic of Singapore
(the "Company) and Xxxxx Xxxxx Limited, a company organized under the laws of
The British Virgin Islands ("Xxxxx Xxxxx").
W I T N E S S E T H:
WHEREAS, HFG and the Company have entered into that certain Financial
Advisory Agreement (the "FAA") and that certain Financing Agreement (the
"Financing Agreement" and collectively with the FAA, the "Assigned Agreements")
each being dated as of September 26, 2005;
WHEREAS, the Company desires to assign its rights and obligations under
the Assigned Agreements to Xxxxx Xxxxx and Xxxxx Xxxxx is willing to assume all
rights and obligations of the Company under the Assigned Agreements;
WHEREAS, HFG is willing to consent to the assignment of the Assigned
Agreements by the Company to Xxxxx Xxxxx;
WHEREAS, the parties hereto also desire to amend the Financing
Agreement as provided for herein; and
WHEREAS, except as otherwise modified by this Agreement, the Assigned
Agreements shall remain in full force and effect, with the obligations of the
parties thereto remaining duly enforceable.
NOW, THEREFORE, for and in consideration of the covenants set forth
herein and the mutual benefits to be gained by the parties hereto, and other
good and valuable consideration, the receipt and adequacy of which are now and
forever acknowledged and confessed, the parties hereto hereby agree and intend
to be legally bound as follows:
1. Assignment. Upon the execution of this Agreement by the parties
hereto, all rights and obligations of the Company under the Assigned Agreements
shall be assigned to and assumed by Xxxxx Xxxxx, with HFG hereby consenting to
this assignment.
2. Amendment and Restatement. Section 4. of the Financing Agreement is
amended and restated in its entirety as follows:
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"HFG shall have the exclusive right (the "Exclusivity Period") from the
date of this Agreement to March 31, 2006 to effect the Financing.
In addition, Xxxxx Xxxxx agrees that in the event that this Agreement
is terminated for any reason, other than upon the completion of a
Financing, it shall not enter into discussions or negotiations with or
close a financing, regardless of terms, with any party introduced by
HFG as a possible investor or placement agent for the Financing, each
of which shall be listed on Schedule "A" to this Agreement at the time
of introduction, for a period of two years following the date of
termination of this Agreement."
3. Governing Law. This Agreement shall be governed by the laws of the
Peoples Republic of China and any dispute arising hereunder shall be submitted
for binding arbitration to the China Foreign Trade Commission Arbitration
Committee in Beijing.
It is understood that this Agreement will be prepared and executed in
both the English and Chinese languages, with both versions having legal
efficacy. If a dispute arises as to the interpretation of a particular provision
of this Agreement because of differences between the Chinese and English
languages, the dispute shall be resolved in accordance with the provisions of
the Chinese version.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
HFG:
HFG:
HFG International, Limited
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx,
Its:President
The Company:
Eastern Nano-Materials Holdings Limited
By: /s/ Xxxxxxxx Xxxx
------------------------------------
Xxxxxxxx Xxxx
Its:CEO
Xxxxx Xxxxx:
Xxxxx Xxxxx Limited
By: /s/ Xxxxxxxx Xxxx
------------------------------------
Xxxxxxxx Xxxx
Its:CEO
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