Consulting Agreement
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17 November,
2009
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This
Consulting Agreement (“Agreement”) is between the following parties
(collectively hereinafter referred to as the “Parties”):
Party A: NanHai Jinlong Non-Woven
Co., Ltd./ Foshan
S.L.P. Special Materials Co. Ltd.
Address:
Shishan Industrial Park, Shishan District, NanHai City, Guangdong, PR
China.
Contact:
Mr. Xx Xxx, CEO.
Party B: United Best Investment
Limited (聯 卓投 資 有 限 公 司)
Address:
Room 000, Xxxxxx Xxxxx, 0-0 Xxxxxxxxx Xxxx, Tsim Sha Tsui, Kowloon, Hong
Kong
Contact: Mr.
Xx Xxx, Chairman of the Board
WHEREAS, this Agreement
entered into between Party A and Party B, sets forth the agreements and terms
for Party A to engage Party B as its long term consultant for the purpose of
introducing Party A to service contractors relating to the listing requirements
for publicly traded companies in the United States of America.
NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
1.
Representations:
The
Parties hereto represent and warrant that they are legally authorized to perform
the services described in this Agreement.
2.
Consulting Work Scope:
i) Assist
Party A with negotiations with service contractors,
ii)
Assist Party A with on-going communications and coordinating the relationships
with service contractors during the listing process.
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3. Fees
and Indemnification Obligations of Party B:
Party A
agrees to indemnify and hold harmless Party B from all third party
claims.
Party A
agrees to compensate Party B as follows:
(i) a
total engagement fee of USD $100,000, payable promptly upon execution of this
agreement; a documentation fee of $25,000, payable upon closing of the Financing
and payable from the proceeds of the offering; and USD $75,000 (collectively
“Engagement Fee”) upon the execution of an acquisition agreement for the shell
company signed by Party A;
(ii) a
success fee as described below.
The
success fee shall be:
(a) 5% of all proceeds
received by the Company with respect to sales of the securities, convertible
bonds and notes which amount shall be payable upon each closing of each
transaction (hereinafter "Success Fee").
(b) Warrants
to purchase such number of shares of securities equal to 5% of the aggregate
number of securities, convertible bonds and notes sold by Party A to investors
(hereinafter “Warrants”). The securities into which such Warrants are
exercisable shall have all terms, rights and preferences applicable to the
securities sold in the financing, provided, however, that such Warrants shall
also have a “cashless” exercise feature. The exercise price of the
Warrants shall be equal to 100% of the purchase price of the securities issued
to the investors in the financing;
(c) A
minimum of 2.5% of the post-transaction common stock (hereinafter “Common
Stock”) of the shell company, payable upon the closing of the
transaction. This minimum 2.5% shall be included in the 40%
shares to be issued according to the Proposed Terms of Schedule II of this
Consulting Agreement (as defined therein).
OR
(c) 2.5%
of the post-transaction common stock (hereinafter “Common Stock”) of the shell
company, payable upon the closing of the transaction, plus any remaining
percentage, if any, of the post-transaction common stock that is assignable for
additional work performed and costs incurred. This 2.5%, plus any remaining
percentage, if any, shall be included in the 40% shares to be issued according
to the Proposed Terms of Schedule II of this Consulting Agreement (as defined
therein),
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(d) The
terms of any subsequent and/or secondary offering will be pursuant to the
percentage scale set forth below:
$20,000,000
or less – Compensation shall equal 4%;
$20,000,000-$50,000,000
– Compensation shall equal 3.5%; and
$50,000,000
or above – Compensation shall equal 3%.
Party A’s
success in accomplishing the financing and listing as described above, shall be
evidenced by the post-merger capital structure or disclosures on the relevant
SEC filing.
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4.
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No
Guarantee.
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Party B has agreed to perform the
services hereunder on a reasonable “best efforts” basis. Party B does
not make any guarantee as to the successful completion of the
Transaction.
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5.
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Registration
Rights.
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Whenever
Party A shall file a registration statement under the Securities Act of 1933, as
amended (the “Act”), relating to the public offering of its common stock or
other securities for sale for cash for its own account, or a re-sale
registration statement for the sale of securities held by other shareholders who
are not employees or consultants to Party A (a “Registration Statement”), Party
A shall give written notice to Party B and shall register all of the Warrants
and Common Stock for re-sale.
6.
Confidentiality:
The
Parties hereto agree that all information received by or from each other shall
be considered Confidential Information if marked as such and shall not be
disclosed to third parties or publicized without the express written consent of
the Parties hereto.
7.
Contact Information:
See
above. Also, mailing, emailing or faxing documents to the Parties
above will be deemed as delivery.
8.
Disputes and Conflicts:
i) This
Agreement may be terminated by the mutual written consent of both parties after
amicable negotiation. Except that the payment provisions in Paragraph
3, whereby Party A agrees to pay Party B and indemnify Party B, shall survive
the termination of this Agreement.
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ii) Any
disputes arising out of this Agreement will be solved amicably by negotiation of
the two parties. In the event a resolution cannot be negotiated, the
dispute will be brought to the China International Economic and Trade
Arbitration Commission (“CIETAC”) for ultimate disposition. If the
Parties could not reach a resolution within thirty (30) days, each Party is
entitled to submit such dispute to CIETAC in Hong Kong for arbitration pursuant
to the CIETAC Arbitration Rules then in force. The arbitration award is final
and binding on all Parties.
iii) The
provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
9.
Effectiveness:
i) This
Agreement takes effect after both of the Parties’ sign below. This
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same Agreement. Facsimile and electronic
signatures shall be deemed originals.
ii) This
Agreement shall be held in four copies of the same form. The Parties
shall preserve two copies with equal legal effect.
iii) This
Agreement will continue in force up to and including the closing of the
transaction, if any, and for an additional period of 2 years
thereafter.
IN WITNESS WHEREOF, this
Agreement has been executed for and on behalf of the undersigned as of the date
below.
Party A:
NanHai Jinlong
Non-Woven Co., Ltd./ Foshan
S.L.P. Special Materials Co. Ltd.
______________________________________________
Authorized
Signature, Mr. Xx Xxx, CEO, Date:
___________
Party B:
United Best Investment
Limited (聯 卓投 資 有 限 公 司)
___________________________________
Authorized
Signature, Mr. Xx Xxx, Chairman of the Board, Date:
__________
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Schedule
II
PROPOSED
TERMS OF THE FINANCING
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Securities
to be Sold
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USD $44,000,000 of
Common Stock (the “Common Stock”) and attached warrants to purchase Common
Stock (the “Warrants”); altogether, the Common Stock and the Warrants are
hereinafter known as the “Securities”. The Securities to be
raised in the amount of USD $44,000,000 will be exchanged for 40% of the
equity of the Company. The
valuation of the Company “post-money”
will be
based on approximately
$80,000,000, or approximately 9 times forecast 2008 earnings.
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