AMENDMENT NO. 1 DATED AS OF OCTOBER 22, 2009 TO CHINA RESEARCH GROUP INVESTOR RELATIONS CONSULTING AGREEMENT DATED OCTOBER 21, 2009
EXHIBIT
10.14
AMENDMENT
NO. 1 DATED AS OF OCTOBER 22, 2009
TO
CHINA RESEARCH GROUP INVESTOR RELATIONS
CONSULTING AGREEMENT DATED
OCTOBER 21, 2009
Amendment
No. 1 (“Amendment
No. 1”), dated as of October 22, 2009 by and between China Research
Group, Inc. (“CRG”),
Shandong Caopu Arts and Crafts Co., Ltd., an entity established under the laws
of the Peoples Republic of China (the “Company”)
and China Shandong Industries, Inc., a Delaware corporation (“CSII”)
to the China Research Group Investor Relations Consulting Agreement dated
October 21, 2009 by and between CRG and the Company (the “Agreement”)
WHEREAS, certain disputes have
arisen between Shandong and CRG relating to the Agreement; and
WHEREAS, to settle such
disputes and avoid possible litigation, the parties hereto are desirous of
amending the Agreement and assigning certain rights and obligations under the
Agreement, all as provided herein.
NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
1. All
defined terms, not otherwise expressly defined herein, shall have the meaning
given them in the Agreement.
2. The
term “Client”
under the Agreement shall mean CSII.
3. The
Company hereby assigns all of its rights and obligations to issue the Shares,
Warrant Shares and Warrants (all as defined in Section 4 below) under the
Agreement to CSII and CSII accepts the same. CRG hereby expressly
consents to the foregoing assignment.
4. Section
4 of the Agreement is hereby terminated in its entirety and replaced by the
following:
4. COMPENSATION
In
consideration of CGI providing the consulting services set forth herein, CSII
shall issue the following securities:
(a) 100,000
shares (the “Shares”)
of its common stock (the “Common
Stock”). Certificates representing the Shares shall bear the
following: (i) a standard restrictive legend as provided under the
Securities Act of 1933, as amended, and (ii) a legend disclosing the existence
of the Lock-Up (as provided in Section 8
hereof).
(b) A
2 year warrant (the “Warrant”)
to purchase 300,000 shares of Common Stock (the “Warrant
Shares”) at an exercise price (the “Exercise
Price”) equal to the greater of the per share public offering price of a
share of Common Stock in the Company’s proposed underwritten public offering of
its securities, and (ii) $3.30 per share (the “Alternate
Exercise Price”). The Warrants shall not be exercisable until
November 13, 2010.
(c) Notwithstanding
anything to the contrary provided herein or elsewhere, the number of Shares and
Warrant Shares shall be decreased proportionately for all reverse stock splits
following the date hereof and the $3.30 Alternate Exercise Price shall be
increased proportionately for all reverse stock splits following the date
hereof. The Warrant Shares and the Shares shall have piggy back
registration rights commencing with any selling shareholder registration
statement filed by the Company with the Securities and Exchange Commission (the
“SEC”)
following the closing of Company’s first underwritten public offering of its
Common Stock. In connection therewith and as a condition to inclusion
of the Shares and Warrant Shares in any such registration statement, CRG shall
complete and execute a customary selling shareholder questionnaire that other
selling shareholders are required to complete.
5. CSII
agrees that for purposes of calculating the holding period of the Shares under
Rule 144 under the Securities Act of 1933, as amended, the Shares shall be
deemed to have been fully earned by CRG on October 21, 2009, the date of
execution of the Agreement. Notwithstanding the above, any sale,
disposition and/or transfer of the Shares is subject to the
Lock-Up.
6.
Notwithstanding anything to the contrary provided herein, in this Amendment No.
1, the Agreement and/or elsewhere, CRG expressly agrees that no expenses and/or
compensation (other than the Shares and Warrants as provided in Section 4 hereof) is
owed and/or due (and/or in the future will be due or owed) to CRG from the
Company, CSII and/or any other of their respective affiliates or any other
person pursuant to this Amendment No. 1, the Agreement and/or otherwise and that
no payments have been late.
7. CRG
hereby expressly agrees that it will not directly or indirectly and/or through
any third party sell, transfer, hypothecate and/or otherwise dispose of any of
the Shares, the Warrants and/or the Warrant Shares until the later to occur of
(i) November 13, 2010, the date twelve (12) months following the date CSNH filed
its Current Report on Form 8-K with the SEC disclosing its acquisition of the
Company and various of its affiliates, and (ii) six (6) months from the date of
the Company’s underwritten public offering of its common stock (the “Lock-Up”).
8. Section
16 is hereby deleted in its entirety and replaced by the following:
a. This
Agreement shall be governed by and construed solely and exclusively in
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The Parties hereto hereby expressly and
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement shall be brought solely in a federal or
state court located in the City, County and State of New York. By its execution
hereof, the Parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The Parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam jurisdiction
with respect thereto. In the event of any such action or proceeding, the Party
prevailing therein shall be entitled to payment from the other Party hereto of
all of its reasonable counsel fees and disbursements.
9. The
Parties hereto agree that Section 6, Section 7 and Section 8 of the Agreement
are hereby deleted in their entirety.
10. Except
as expressly amended hereby the Agreement shall remain in full force and effect
including, but not limited to, the obligation of CRG to perform all of the
services it agreed to provide in the Agreement.
11. This
Amendment No. 1 shall be governed by and construed solely and exclusively in
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The Parties hereto hereby expressly and
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement shall be brought solely in a federal or
state court located in the City, County and State of New York. By its execution
hereof, the Parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The Parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam jurisdiction
with respect thereto. In the event of any such action or proceeding, the Party
prevailing therein shall be entitled to payment from the other Party hereto of
all of its reasonable counsel fees and disbursements.
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SIGNATURE
PAGE
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of
October 22, 2009.
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By:
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/s/ Xxxxxxxx Xx
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Name:
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Title:
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SHANDONG
CAOPU ARTS AND CRAFTS CO., LTD.
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By:
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/s/ Xxxxxxxx Xx
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Name:
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Title:
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CHINA
RESEARCH GROUP, INC.
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By:
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/s/ Xxxxxx Xxxxx
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Name: Xxxxxx
Xxxxx
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Title: President
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