Financial Advisory Agreement Jilin Dongsheng Weiye Science and Technology Co., Ltd and Warner Technology and Investment July 20, 2005
Jilin
Dongsheng Weiye Science and Technology Co., Ltd
and
Warner
Technology and Investment
July
20,
2005
Party
A:
Jilin
Dongsheng Weiye Science and Technology Co., Ltd.
Party
B:
Warner Technology and Investment Corporation.
In
this
Agreement, Party A and Party B are termed collectively as the "Parties" and
each
individually termed as the "Party".
Whereas,
Jilin Dongsheng Weiye Science and Technology Co., Ltd is a private owned company
registered in People’s Republic of China engaged in the manufacture and
distribution personal care products.
Whereas,
Warner Technology and Investment Corporation is a New Jersey registered
corporation that focuses on financial consulting and provides technical support
to Chinese privately owned company in going public in the US capital
markets.
NOW
THEREFORE, the Parties hereby have reached the following agreement upon friendly
consultations:
Common
stock distribution:
The
total
authorized shares of the public entity will be 100 million shares with an
initial structure of 15 million shares outstanding upon completion of Party
B’s
duties.
Based
on
the initial structure of 15 million shares outstanding, Party A will own
approximately 80% of the shares outstanding.
Party
B
which includes both original shareholders of Shell Company and third party
consultants company will own the remaining approximate 20% of the outstanding
shares.
All
parties not included in the shares owned by Party A will account for
approximately 3% of the total authorized shares of 100 million shares based
upon
the 15 millions shares outstanding structure. Notice: as per request by Party
A
before signing LOI with the shell company, initial structure was changed to
30
millions, Party A still owns 80% of the shares outstanding. Party B and all
related parties own 20% of the shares outstanding.
Issuance
of shares or options to Party A officers, employees and related consultants
will
not exceed 10% of total issued shares in fiscal year.
Party
B Best Effort Responsibilities :
Where
date T is defined as when two year fiscal year audits and due diligence is
completed.
| 1. |
T+3
months: effect signing merger agreement between Party A and OTCBB
company.
|
| 2. |
6
to 9 months after OTCBB listing: assist Party A in applying for AMEX
or
NASDAQ listing contingent upon the meeting of listing requirements.
|
| 3. |
4
to 6months after OTCBB listing: assist in private placement of $2 million
dollars.
|
| 4. |
6
to 9months after listing on NASDAQ/AMEX: assist in secondary offering
of
$40 million dollars.
|
During
the first phase (“merger phase”), Party B is responsible for:
•
introducing PCAOB qualified auditors.
•
introducing securities counsel.
•
introducing NASD/SPIC member investment banking firms.
•
assisting in the preparation of an English business plan based information
provide by Party A.
•
introducing an OTCBB traded company to effect reverse merger
transaction.
•
completing the reverse merger with OTCBB traded company after 3 month from
the
completion of the business plan, 2 year fiscal year GAAP audit, and due
diligence.
•
providing stock certificates to Party A as a result of the reverse merger.
During
the second phase (post merger phase), Party B is responsible for:
•
introducing Party A to investors.
•
assisting Party A in the preparation of private placement memoranda or
prospectus.
•
introducing Party A to market makers.
•
assisting in the opening of bank accounts in the US.
•
assisting with timely filings with the SEC.
•
assisting with the obtaining of visas for Party A employees to enter the
US.
During
the first phase (merger phase), Party A is responsible for:
•
certification of accurate and true financial results.
•
preparation of information as basis for business plan.
•
obtaining legal documents and business permits.
•
preparing all required documents related to merger.
•
preparing related documents required by SEC.
•
managing company and keep high growth.
•
pay
all
fees on time.
During
the second phase (post merger phase), Party A is responsible for:
•
filing
timely disclosures and reports with the SEC.
•
investor relations.
•
pay
all
fees on time.
Fee
schedule:
Parties
consent to the fee related to completing reverse merger on the OTCBB:
$900,000USD (“the public listing fee”).
The
fee
is a package fee including fees associated with 2 year fiscal year GAAP audit,
financial consulting fee, investment banking fees, due diligence fees, and
costs
related to the reverse merger.
$100,000
is to be paid within 1 week of signing of this agreement.
$400,000
is to be paid upon signing an engagement letter with a PCAOB approved auditor.
$300,000
is to be paid upon signing a letter of intent with an OTCBB traded company.
$100,000
is to be paid upon completion of Party B’s duties.
Financing
Party
B
is to use best efforts to assist in the raising of $2 million upon completion
of
OTCBB listing. Party B will assist in the negotiating of commissions on Party
A’s behalf. Commissions charged by the placement agent in the financing will
be
between 7% and 10%. Non allowable expenses will be at maximum 3%. Warrant
coverage will be at maximum 10% of securities placed.
Party
B
is to use best efforts to assist in the raising of $40 million upon completion
of AMEX/NASDAQ listing. Party B will assist in the negotiating of commissions
on
Party A’s behalf. Commissions charged by the placement agent in the financing
will be between 6% and 8%. Non allowable expenses will be at maximum 3%. Warrant
coverage will be at maximum 10% of securities placed.
Contigencies
| · |
Party
B guarantees the delivery of a clean shell meaning zero assets and
zero
liabilities to Party A.
|
| · |
Party
B should take the full responsibility for the merger. If Party B fails
to
fulfill the merger after receiving all related documents from Party
A on
time, Party B will return all the fund received from Party
A.
|
| · |
If
Party A terminates the public listing process, payments to Party B
will
not be refunded.
|
| · |
For
a period of 5 years from signing of this agreement, Party B will serve
as
the exclusive financial consultant of Party A in the
US.
|
Completion
of Duties
Parties
B’s responsibilities for merger phase will be completed upon delivery of stock
certificates representing 80% of the total shares outstanding of the initial
capital structure. Upon completion of the merger phase duties, Party A is
responsible for complete payment of the public listing fee.
Legal
Both
parties are responsible for abiding by the laws of their separate jurisdictions.