EXCLUSIVE BUSINESS CONSULTING AGREEMENT
This
Exclusive Business Consulting Agreement (the "Agreement") is entered into as
of
December 15th,
2006,
between the following two parties:
PARTY
A: JILIN CITY HAITIAN BUSINESS CONSULTING CO., LTD.
LEGAL
ADDRESS: Xx.0-0 Xxxxx-xxxxxxx Xxxxxx, Xxxxxxx Economic Development Zone, Jilin
City, China
PARTY
B: JILIN HAITIAN INDUSTRIAL COMPANY, LTD.
LEGAL
ADDRESS: Xx.0-0 Xxxxx-xxxxxxx Xxxxxx, Xxxxxxx Economic Development Zone, Jilin
City, China
WHEREAS,
Party A
is a wholly foreign-owned enterprise registered in The People's Republic of
China (the "PRC") under the laws of PRC and owns resources to provide business
consulting services;
WHEREAS,
Advancetech Global Limited (“AGL”), an International Business Company
incorporated in the British Virgin Islands, owns all of the registered capital
of Party A;
WHEREAS,
Party B
is a domestic company with exclusively domestic capital registered in the PRC
and is engaged in the business of manufacturing chemicals
(“Business”);
WHEREAS,
Wang
Xitian and Jilin Huizheng Venture Capital Co. together own 71.34% of the capital
stock of AGL and of the registered capital of Party B, and as such have common
control over AGL and Party B;
WHEREAS,
Party A
has established a business relationship with Party B by entering into an
Operating Agreement dated as of the same date hereof (“Operating Agreement”) and
a Technology Consulting Services Agreement dated as of the same date hereof
(“Technology Agreement”);
WHEREAS,
pursuant to the Operating Agreement and Technology Agreement between Party
A and
Party B, Party B shall pay Party A certain fees as set forth in the Operating
Agreement and the Technology Agreement (“Other Fees”);
WHEREAS,
Party B
is an affiliated Chinese entity of Party A; and
WHEREAS,
Party A
desires to be the provider of business consulting and related services to Party
B, and Party B hereby agrees to accept such business consulting and
services;
NOW
THEREFORE,
the
parties agree as follows:
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1. BUSINESS
CONSULTING AND SERVICES; EXCLUSIVITY
1.1. During
the term of this Agreement, Party A agrees to, as the exclusive business
consulting services provider of Party B, provide the business consulting
services to Party B (which consulting services are more specifically described
in Appendix 1).
1.2. Party
B
hereby agrees to accept such business consulting services and Party A’s
appointment as the exclusive business consulting services provider of Party
B.
Party B further agrees that, during the term of this Agreement, it shall not
utilize any third party to provide such business consulting services for such
above-mentioned business without the prior written consent of Party
A.
1.3. Party
A
shall be the sole and exclusive owner of all rights, title and interests to
any
and all intellectual property rights arising from the performance Party A’s
services under this Agreement, including, but not limited to, any trade secrets,
copyrights, patents, know-how, un-patented methods and processes and otherwise,
whether developed by Party A or Party B based on Party A's services provided
under this Agreement. Party A and Party B understand and agree that the terms
and conditions of this Agreement are subject to the terms and restrictions
of
the Technology Agreement between Party A and Party B dated as of the same date
hereof, as may be amended from time to time.
2. CONSULTING
FEES
During
the term of this Agreement, Party B shall pay to Party A a consulting fee
(“Fee”) for the services provided by Party A under this Agreement equal to 30%
of Party B’s cash flows from operating activities (“Operating Cash Flow”).
The
Fee
shall be paid monthly by Party B to Party A within 10 days following the end
of
each month based on the Operating Cash Flow for such month as estimated by
Party
A and Party B in good faith (“Estimated Monthly Amount”). Within sixty (60) days
after the end of each fiscal quarter, Party A and Party B shall make a final
determination of the actual Operating Cash Flow for such quarter (“Final
Quarterly Amount”) based on the financial statements of Party B, which have been
reviewed or audited by the Parties’ registered certifying accountant for U.S.
financial reporting purposes (“Accountant”). To the extent the Final Quaterly
Amount is greater than the Estimated Monthly Amounts for such quarter, the
Fee
shall be adjusted and Party B shall promptly remit to Party A the additional
Fee
due and owing. To the extent the Final Quarterly Amount is less than the
Estimated Monthly Amounts for such quarter, the Fee shall be adjusted and Party
A shall promptly remit to Party B the amount by which the Fee was overpaid.
Notwithstanding
anything to the contrary contained in this Agreement, for each fiscal year
of
Party B, (i) in the event that 30% of Party’s B Net Income (as defined below)
for the fiscal year is less than the Fee for such fiscal year, the Fee shall
be
adjusted such that it shall be equal to 30% of Party B’s Net Income for such
fiscal year, and (ii) in the event that 30% of Party B’s Net Income is greater
than the Fee for such fiscal year, the Fee shall be increased such that it
shall
be equal to 30% of Party B’s Net Income for such fiscal year.
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For
the
purposes of this Agreement, the determination and calculation of Operating
Cash
Flow and Net Income shall made in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”) as reflected on Party B’s U.S. GAAP
financial statements, which have been reviewed or audited by the Accountant,
before giving effect to the Fee paid or payable under this Agreement and the
Other Fees paid or payable under the Operating Agreement and Technology
Agreement. Any disputes with respect to the determination or calculation of
the
Fee, Net Income or Operating Cash Flow shall be resolved by the Accountant,
and
such determination shall be final.
3. REPRESENTATIONS
AND WARRANTIES
3.1. PARTY
A
HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:
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3.1.1
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Party
A is a wholly foreign owned enterprise duly registered and validly
existing under the laws of the PRC and is authorized to engage in
the
business of consulting services.
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3.1.2
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Party
A has full right, power, authority and capacity and all consents
and
approvals of any other third party and government necessary to execute
and
perform this Agreement, which shall not be against any enforceable
and
effective laws or contracts.
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3.1.3
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Once
this Agreement has been duly executed by both parties, it will constitute
a legal, valid and binding agreement of Party A and is enforceable
against
it in accordance with its terms upon its
execution.
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3.2. PARTY
B
HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:
3.2.1
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Party
B is a domestic company with exclusively domestic capital duly registered
and validly existing under the laws of the PRC and is authorized
to engage
in the Business.
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3.2.2
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Party
B has full right, power, authority and capacity and all consents
and
approvals of any other third party and government necessary to
execute and
perform this Agreement, which shall not be against any enforceable
and
effective laws or contracts.
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3.2.3
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Once
this Agreement has been duly executed by both parties, it will constitute
a legal, valid and binding agreement of Party B and is enforceable
against
it in accordance with its terms upon its
execution.
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4. CONFIDENTIALITY
4.1. Party
A
agrees to use all reasonable means to protect and maintain the confidentiality
of Party B's confidential data and information acknowledged or received by
Party
A from Party B in providing the exclusive consulting (collectively the
“Confidential Information"). Party A shall not disclose or transfer any
Confidential Information to any third party without Party B's prior written
consent. Upon termination or expiration of this Agreement, Party A shall, at
Party B's option, deliver any and all documents, information or software
containing any of such Confidential Information to Party A or destroy it or
delete all of such Confidential Information from any memory devices, and cease
to use them. This provision does not apply to Product Technology, as defined
in
the Technology Agreement, as to which the Technology Agreement shall
control.
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4.2. Section
4.1 shall survive after any amendment, expiration or termination of this
Agreement.
5. INDEMNITY
Party
B
shall indemnify and hold harmless Party A from and against any loss, damage,
obligation and cost arising out of any litigation, claim or other legal
procedure against Party A resulting from the contents of the business consulting
and services demanded by Party B under this Agreement.
6. EFFECTIVE
DATE AND TERM
6.1. This
Agreement shall be executed and come into effect as of the date first set forth
above. The term of this Agreement is ten (10) years, unless earlier terminated
as set forth in this Agreement.
6.2. This
Agreement shall be automatically renewed for additional an unlimited number
of
ten (10) year periods upon the expiration of the initial term hereof or any
renewal term, unless this Agreement has been previously terminated as provided
herein.
7. TERMINATION
7.1. Early
Termination
During
the initial term of this Agreement or any renewal term, Party B shall not
terminate this Agreement. Notwithstanding the above stipulation, Party A shall
have the right to terminate this Agreement at any time by issuing a thirty
days’
prior written notice to Party B.
7.2. Survival.
Article
4 and 5 shall survive after the termination or expiration of this
Agreement.
8. SETTLEMENT
OF DISPUTES
The
parties shall strive to settle any dispute arising from the interpretation
or
performance in connection with this Agreement through friendly negotiation.
In
case no settlement can be reached through negotiation, except as provided in
Article 2, each party can submit such matter to China International Economic
and
Trade Arbitration Commission (the "CIETAC"). The arbitration shall follow the
current rules of CIETAC, and the arbitration proceedings shall be conducted
in
English and shall take place in Hong Kong. The arbitration award shall be final
and binding upon the parties and shall be enforceable in accordance with its
terms.
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9. FORCE
MAJEURE
9.1. Force
Majeure, which includes acts of governments, acts of nature, fire, explosion,
typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond
the party's reasonable control and cannot be prevented with reasonable care.
However, any shortage of credit, capital or finance shall not be regarded as
an
event of Force Majeure. The affected party who is claiming to be not liable
for
its failure of fulfilling this Agreement by Force Majeure shall inform the
other
party, without delay, of the delay in the performance of this Agreement by
the
affected party.
9.2. In
the
event that the affected party is delayed in or prevented from performing its
obligations under this Agreement by Force Majeure, only within the scope of
such
delay or prevention, the affected party will not be responsible for any damage
by reason of such a failure or delay of performance. The affected party shall
take appropriate means to minimize or remove the effects of Force Majeure and
attempt to resume performance of the obligations delayed or prevented by the
event of Force Majeure. After the event of Force Majeure is removed, both
parties agree to resume performance of this Agreement with their best
efforts.
10. NOTICES
Notices
or other communications required to be given by any party pursuant to this
Agreement shall be written in English and shall be deemed to be duly given
when
it is delivered personally or sent by registered mail or postage prepaid mail
or
by a recognized courier service or by facsimile transmission to the address
of
the relevant party or parties set forth below.
Party
A:
Haitian Business Consulting Co., Ltd.
Xx.0-0
Xxxxx-xxxxxxx Xxxxxx, Xxxxxxx Economic Development Zone, Jilin City,
China
Party
B:
Jilin Haitian Industry Company, Ltd.
Xx.0-0
Xxxxx-xxxxxxx Xxxxxx, Xxxxxxx Economic Development Zone, Jilin City,
China
11. NO
ASSIGNMENT OR SUBLICENSE BY THE LICENSEE
Party
A
and Party B may not assign their rights or obligations under this Agreement
to
any third party without the prior written consent of the other
party.
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12. SEVERABILITY
Any
provision of this Agreement that is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof in such jurisdiction or rendering that any other provision of this
Agreement invalid or unenforceable in any other jurisdiction.
13. AMENDMENT
AND SUPPLEMENT
Any
amendment and supplement of this Agreement shall come into force only after
a
written agreement in the English language is signed by both parties. The
amendment and supplement duly executed by both parties shall be part of this
Agreement and shall have the same legal effect as this Agreement.
14. GOVERNING
LAW
This
Agreement shall be governed by and construed in accordance with the PRC
laws.
15. LANGUAGE
This
Agreement is executed in English only, and the executed English language
Agreement shall prevail in all cases. This Agreement may be executed in
counterparts, each of which shall constitute one and the same agreement, and
by
facsimile or electronic signature.
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IN
WITNESS THEREOF,
the
parties hereto have caused this Agreement to be duly executed on their behalf
by
a duly authorized representative as of the date first set forth
above.
PARTY
A: JILIN CITY HAITIAN BUSINESS CONSULTING CO., LTD
By:
/s/ Wang Xxxxxx
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Xxxx
Xitian, Chairman and CEO
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PARTY
B: JILIN HAITIAN INDUSTRIAL COMPANY, LTD.
By:
/s/ Wang Xxxxxx
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Xxxx
Xitian, Chairman and CEO
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PARTY
C:
/s/
Wang Xxxxxx
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Xxxx
Xitian
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PARTY
D: JILIN
PROVINCE HUIZHENG VENTURE CAPITAL CO.
By:
/s/
Wang Xxxxxx
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Xxxx
Xitian, Chairman
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APPENDIX
1: DESCRIPTION OF BUSINESS CONSULTING AND SERVICES
1.
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providing
business consulting on the Business of Party
B;
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2.
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providing
business consulting on management, marketing, and business planning
of
Party B;
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3.
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training
of managerial personnel of Party B;
and
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4.
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providing
other business consultation and services that Party B may reasonably
request.
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