GREENTREE FINANCIAL GROUP, INC. ã
GREENTREE FINANCIAL GROUP,
INC. ã
June 21,
2006
PERSONAL AND
CONFIDENTIAL
SHAN XX XX XXX XXXXX TAI KE XX XX FEN
YOU XXXX XXXX SI
Attn:
Xx. XXX XXXXX XX
Dear Xx.
Xxx:
This
service agreement ("Agreement") confirms the terms and conditions of the
exclusive engagement of Greentree Financial Group, Inc. ("Greentree") by SHAN XX
XX XXX XXXXX TAI KE JI GU FEN YOU XXXX XXXX SI (the "Company") to render certain
consulting services to the Company in connection with the Company's plans to
shift their accounting systems to a format that is consistent with United States
GAAP (Generally Accepted Accounting Principles), and related upgrades and
modifications to management training and business plan development that will
more readily integrate with United States GAAP.
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1.
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Services. Xxxxxxxxx
agrees to perform the following
services:
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(a)
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Advise
and assist the Company in the conversion of its financial reporting
systems, including its projected financial statements, to a format that is
consistent with United States GAAP (Generally Accepted Accounting
Principles);
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(b)
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Review
and advise the Company on all documents and accounting systems relating to
its finances and transactions, with the purpose of bringing such documents
and systems into compliance with United States
GAAP;
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(c)
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Advise
and assist the Company with the design and preparation of a business plan
in a format generally consistent with the financial standards applicable
in the United States;
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(d)
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Advise
and assist the Company with redesigning its capital structure, consistent
with United States GAAP and usual and customary business practices for
companies similar to the Company;
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(e)
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Advise
and assist with the preparation of English-version marketing materials for
the Company’s products;
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(f)
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Provide
necessary professional services and support as an international liaison
for Company to third-party service providers, including coordination
amongst the Company and their related attorneys and
CPAs;
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(g)
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Provide
management training to the senior management of the Company, pertaining to
usual and customary practices for U.S. companies with business plans
similar to the Company’s business
plan;
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(h)
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Advise
and train the company on compliance filings with the United States
Securities and Exchange Commission, including Forms 10-QSB, 10-KSB, and
8-K and XXXXX filing of the same;
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2. Fees. The
Company agrees to pay Greentree for its services a consulting service fee of
$300,000 ("Service Fee") during the Term, payable as follows. The Service Fee
includes, but is not limited to, accounting service fees within the first year
after this agreement is signed. (Note: Auditing and quarterly auditor review
fees are not included in this agreement and should be paid directly by the
Company to their independent auditors.)
Xxxxxxxxx
agrees to accept payment of the Service Fee in one of the two following
ways. Such terms relate only to the timing of payment, and not to the
existence of the Company’s obligation to pay, which is set forth
above:
a. The Company shall pay
Greentree $300,000 in cash; or
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b.
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The
Company shall pay Greentree 1,000,000 freely tradable
common
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shares
(based on a price of $0.30 per
share).
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All
currency amounts are in U.S. dollars. If the Company would like to pay in terms
of RMB, the calculation is based on the current exchange rate at the payment
date.
In
addition to the Service Fee confirmed in this Agreement, the Company agrees to
reimburse Greentree for all of its reasonable out-of-pocket fees, expenses and
costs (including, but not limited to, legal, accounting, travel, accommodations,
telephone, translation, computer, courier and supplies) in connection with the
performance of its services under this Agreement, upon prior written
approval. All such fees, expenses and costs will be billed at any
time by Xxxxxxxxx and are payable by the Company when invoiced. Upon expiration
of the Agreement any unreimbursed fees and expenses will be immediately due and
payable.
3. Term. The
term of this Agreement shall commence on June 21, 2006, and end on June 21, 2008
(the "Term"). This Agreement may be renewed upon mutual written
agreement of the parties hereto. The Company may terminate this
agreement with 45 days prior written notice to Xxxxxxxxx. However,
any obligation pursuant to this Paragraph 3, and pursuant to Paragraphs 2
(payment of fees), 4 (indemnification), 5 (matters relating to engagement), 6
(governing law), and 10 (miscellaneous) hereof, shall survive the termination or
expiration of this Agreement. As stated in the foregoing sentence, the parties
specifically agree that in the event the Company terminates this Agreement, the
full Service Fee of $300,000 shall become immediately due and
payable.
4. Indemnification. In
addition to the payment of fees and reimbursement of fees and expenses provided
for above, the Company agrees to indemnify Greentree and its affiliates with
regard to the matters contemplated herein, as set forth in Exhibit A, attached
hereto, which is incorporated by reference as if fully set forth herein. After the Agreement is
signed by both parties, unless the Company violates a mandatory provision of a
law or regulation, Greentree shall not terminate the Agreement without cause;
otherwise, Greentree shall return all the fees that have been paid by the
Company, including the Service Fee provided in Item 2.
5. Matters Relating to
Engagement. The Company acknowledges that Xxxxxxxxx has been
retained solely to provide the services set forth in this
Agreement. In rendering such services, Xxxxxxxxx shall act as an
independent contractor, and any duties of Greentree arising out of its
engagement hereunder shall be owed solely to the Company. The Company
further acknowledges that Greentree may perform certain of the services
described herein through one or more of its affiliates.
The
Company acknowledges that Xxxxxxxxx is a consulting firm that is engaged in
providing consulting services. The Company acknowledges and agrees that in
connection with the performance of Xxxxxxxxx's services hereunder (or any other
services) that neither Xxxxxxxxx nor any of its employees will be providing the
Company with legal, tax or accounting advice or guidance (and no advice or
guidance provided by Xxxxxxxxx or its employees to the Company should be
construed as such) and that neither Xxxxxxxxx nor its employees hold itself or
themselves out to be advisors as to legal, tax, accounting or regulatory matters
in any jurisdiction. Xxxxxxxxx may retain attorneys and accountants that are for
Xxxxxxxxx’s benefit, and Xxxxxxxxx may recommend a particular law firm or
accounting firm to be engaged by the Company and may pay the legal expenses or
accounting expenses associated with that referral on behalf of the Company,
after full disclosure to the Company and the Company’s consent that Xxxxxxxxx
make such payment on its behalf. However, Xxxxxxxxx makes no recommendation as
to the outcome of such referrals. The Company shall consult with its own legal,
tax, accounting and other advisors concerning all matters and advice rendered by
Xxxxxxxxx to the Company, and the Company shall be responsible for making its
own independent investigation and appraisal of the risks, benefits and
suitability of the advice and guidance given by Xxxxxxxxx to the
Company. Neither Greentree nor its employees shall have any
responsibility or liability whatsoever to the Company or its affiliates with
respect thereto.
The
Company recognizes and confirms that in performing its duties pursuant to this
Agreement, Xxxxxxxxx will be using and relying on data, material, and other
information furnished by the Company, a third party provider, or their
respective employees and representatives (“the Information”). The
Company will cooperate with Xxxxxxxxx and will furnish Greentree with all
Information concerning the Company and any financial information or
organizational or transactional information which Greentree deems appropriate,
and Company will provide Xxxxxxxxx with access to the Company's officers,
directors, employees, independent accountants and legal counsel for the purpose
of performing Xxxxxxxxx's obligations pursuant to this
Agreement. The Company hereby agrees and represents that all
Information furnished to Xxxxxxxxx pursuant to this Agreement shall be accurate
and complete in all material respects at the time provided, and that, if the
Information becomes materially inaccurate, incomplete or misleading during the
term of Xxxxxxxxx's engagement hereunder, the Company shall promptly advise
Xxxxxxxxx in writing. Accordingly, Xxxxxxxxx assumes no
responsibility for the accuracy and completeness of the Information. In
rendering its services, Greentree will be using and relying upon the Information
without independent verification evaluation thereof.
6. Governing Law and Consent to
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, including its
conflict of laws provisions. Any dispute arising from or in connection with or
in respect of the interpretation or application of this Agreement shall be
submitted to one arbitrator appointed by the American Arbitration Association.
The Arbitration will be conducted in compliance with the rules and procedures of
the American Arbitration Association. The award of such arbitration shall be
final and have binding force over each party, and judgment on such arbitration
award may be entered in any court of competent jurisdiction.
7. No
Brokers. The Company represents and warrants to Greentree that
there are no brokers, representatives or other persons which have an interest in
compensation due to Greentree from any services contemplated
herein.
8.
Authorization. The
Company and Greentree represent and warrant that each has all requisite power
and authority, and all necessary authorizations, to enter into and carry out the
terms and provisions of this Agreement and the execution, delivery and
performance of this Agreement does not breach or conflict with any agreement,
document or instrument (including contracts, xxxxx, agreements, records and wire
receipts, etc.) to which it is a party or bound.
9. Miscellaneous. This
Agreement constitutes the entire understanding and agreement between the Company
and Greentree with respect to the subject matter hereof and supersedes all prior
understandings or agreements between the parties with respect thereto, whether
oral or written, express or implied. Any amendments or modifications
must be executed in writing by both parties. This Agreement and all
rights, liabilities and obligations hereunder shall be binding upon and inure to
the benefit of each party’s successors but may not be assigned without the prior
written approval of the other party. If any provision of this
Agreement shall be held or made invalid by a statute, rule, regulation, decision
of a tribunal or otherwise, the remainder of this Agreement shall not be
affected thereby and, to this extent, the provisions of this Agreement shall be
deemed to be severable. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument. The
descriptive headings of the Paragraphs of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not
affect in any way the meaning or interpretation of this Agreement.
If both
parties agree in writing, they can make supplementary agreements for those
unsettled issues between them, which signed writings will be binding on both
parties.
Please
confirm that the foregoing correctly sets forth our agreement by signing below
in the space provided and returning this Agreement to Greentree for execution,
which shall constitute a binding agreement as of the date first above
written.
Thank
you. We look forward to a mutually rewarding relationship.
GREENTREE
FINANCIAL GROUP, INC.
By: /s/ X. Xxxxx
Xxxxxxx
Name:
X. Xxxxx Xxxxxxx
Title: Vice
President
Address:
0000 X Xxxx Xxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, XXX
AGREED TO
AND ACCEPTED
AS OF
June 21, 2006
SHAN XX XX XXX XXXXX TAI KE XX XX FEN
YOU XXXX XXXX SI
By:
/s/ Xxx Xxxxx Xx
Name:
Xxx Xxxxx Xx
Title:
President
Address:
#000, Xxx Xx Xxxx, Xxxx Xxx Xxxxxx, Xx’xx, P. R. China
AGREED TO
AND ACCEPTED
AS OF
June 21, 2006
EXHIBIT A:
INDEMNIFICATION
The
Company agrees to indemnify Greentree, its employees, directors, officers,
agents, affiliates, and each person, if any, who controls it within the meaning
of either Section 20 of the Securities Exchange Act of 1934 or Section 15 of the
Securities Act of 1933 (each such person, including Greentree is referred to as
"Indemnified Party") from and against any losses, claims, damages and
liabilities, joint or several (including all legal or other expenses reasonably
incurred by an Indemnified Party in connection with the preparation for or
defense of any threatened or pending claim, action or proceeding, whether or not
resulting in any liability) ("Damages"), to which such Indemnified Party, in
connection with providing its services or arising out of its engagement
hereunder, may become subject under any applicable Federal or state law or
otherwise, including but not limited to liability or loss (i) caused by or
arising out of an untrue statement or an alleged untrue statement of a material
fact or omission or alleged omission to state a material fact necessary in order
to make a statement not misleading in light of the circumstances under which it
was made, (ii) caused by or arising out of any act or failure to act, or (iii)
arising out of Xxxxxxxxx's engagement or the rendering by any Indemnified Party
of its services under this Agreement; provided, however, that the Company will
not be liable to the Indemnified Party hereunder to the extent that any Damages
are found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Indemnified Party seeking indemnification hereunder.
These
indemnification provisions shall be in addition to any liability which the
Company may otherwise have to any Indemnified Party.
If for
any reason, other than a final non-appealable judgment finding an Indemnified
Party liable for Damages for its gross negligence or willful misconduct the
foregoing indemnity is unavailable to an Indemnified Party or insufficient to
hold an Indemnified Party harmless, then the Company shall contribute to the
amount paid or payable by an Indemnified Party as a result of such Damages in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company and its shareholders on the one hand and the Indemnified
Party on the other, but also the relative fault of the Company and the
Indemnified Party as well as any relevant equitable considerations.
Promptly
after receipt by the Indemnified Party of notice of any claim or of the
commencement of any action in respect of which indemnity may be sought, the
Indemnified Party will notify the Company in writing of the receipt or
commencement thereof and the Company shall have the right to assume the defense
of such claim or action (including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of fees and expenses of
such counsel), provided that the Indemnified Party shall have the right to
control its defense if, in the opinion of its counsel, the Indemnified Party's
defense is unique or separate to it as the case may be, as opposed to a defense
pertaining to the Company. In any event, the Indemnified Party shall
have the right to retain counsel reasonably satisfactory to the Company, at the
Company's sole expense, to represent it in any claim or action in respect of
which indemnity may be sought and agrees to cooperate with the Company and the
Company's counsel in the defense of such claim or action. In the
event that the Company does not promptly assume the defense of a claim or
action, the Indemnified Party shall have the right to employ counsel to defend
such claim or action. Any obligation pursuant to this Annex shall survive the
termination or expiration of the Agreement
