CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is entered into this 28th day of March, 2003,
by and between Lazarus Industries, Inc. ("Lazarus" or the "Company"), a
corporation with its headquarters in Salt Lake City, Utah, American Dairy
Holdings, Inc., a Delaware corporation ("American Dairy") and Danbury
Properties, L.L.C., a Utah limited liability company (hereinafter referred to
as "Consultant").
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants hereinafter set forth, the adequacy of which is hereby acknowledged,
it is hereby agreed as follows:
1. The Company has entered into a Stock Exchange Agreement (the
"Exchange Agreement") with American Dairy and its shareholders, under the
terms of which the Company has agreed to acquire all of the issued and
outstanding shares of American Dairy, in exchange for the issuance of a
controlling interest in the Company. It is anticipated that this transaction
will close in February or March, 2003.
2. The Company and American Dairy hereby appoint and engage
Consultant, and Consultant accepts such appointment, upon the terms and
conditions set forth herein.
3. Consultant's appointment hereunder shall commence on the date of
closing of the Exchange Agreement, and shall continue thereafter for one full
year.
4. During the period of Consultant's engagement hereunder, Consultant
shall provide to the Company and American Dairy consulting services in the
areas of financial and management planning, financing assistance and capital
formation. Consultant agrees to use its best efforts to assist Client in
providing the following:
(a) Assistance in structuring of debt and equity financings of
the Company;
(b) Development of public relations and broker relations
program(s), and communications with brokerage community and shareholder
community regarding business of the Company and American Dairy;
(c) Assistance and advice in various securities matters,
including secondary trading issues, broker-dealer compliance and other
matters; consultation regarding SEC and state regulatory filings, application
for Nasdaq or other listings and other securities matters; and
(d) Consultation in connection with acquisition or development
opportunities; and
(e) Other corporate and financing matters and advisory and
consulting services as may arise and be requested from time to time.
Consultant agrees to provide such services with diligence and in good
faith to the best of its abilities. The Company and American Dairy recognize
and acknowledge, however, that Consultant has numerous other business
endeavors in which he is engaged, and that Consultant's commitment herein is
limited in time and scope.
5. As compensation for its services, the Company and American Dairy
agree to compensate Consultant as follows:
(a) the sum of $60,000 in cash;
(b) the issuance of a total of 240,000 (post-split) shares of
restricted common stock of the Company, after giving effect to the reverse
split contemplated in the Exchange Agreement.
6. If at any time or from time to time, the Company shall determine to
register any of its securities, for its own account or the account of any of
its shareholders, other than a registration relating solely to employee
benefit plans, or any registration statement on Form S-8, or a registration
relating solely to an SEC Rule 145 transaction, a transaction relating solely
to the sale of debt or convertible debt instruments or a registration on any
form (other than Form X-0, X-0 or S-3, or their successor forms), which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of registrable
securities, the Company will:
(a) give to Consultant or its assignees written notice thereof as
soon as practicable prior to filing the registration statement; and
(b) include in such registration and in any underwriting involved
therein, all or any securities issued above specified in a written request or
requests, made within fifteen (15) days after receipt of such written notice
from the Company. If the registration is for a registered public offering
involving an underwriting, the Company shall so advise the Consultant or its
assignees as a part of the written notice given pursuant to subsection 6(a).
In such event, the right of Consultant or its assignees to registration
pursuant to Section 6 shall be conditioned upon such Consultant's
participation in such underwriting and the inclusion of such Consultant's
securities in the underwriting to the extent provided herein.
7. In addition to the compensation set forth in paragraph 5 above,
the Company and American Dairy agree that they will cover all expenses
reasonably incurred by Consultant in the course of providing consulting
services requested by the Company and American Dairy under the terms of this
Agreement, provided that any single expense in excess of $500, or any
aggregate expense in excess of $1,000 in any quarter, shall be approved by the
Company in advance in writing.
8. Consultant is retained and engaged by the Company and American
Dairy for the purposes and to the extent set forth in this Agreement, and its
relation to the Company and American Dairy shall, during the term hereof, or
any extension of such term, be that of an independent contractor. It shall
be free to dispose of such portion of its entire time, energy, skill and
attention during regular business hours as it is not required to devote to the
Company and American Dairy hereunder in such manner as it sees fit.
Consultant shall not be considered under this provisions of this Agreement or
otherwise as being an employee of the Company and American Dairy.
9. The owners of Consultant, Xxxx Xxxxxxx and Xxxxx X. Xxxxx, hold
options to purchase a total of 200,000 (pre-split) shares of common stock of
the Company. In consideration of the payment by the Company of the sum of
$12,000, Consultant will cause such individuals to return such options to the
Company for cancellation, and such individuals consent to this paragraph of
the Agreement.
10. The Company shall supply and deliver to Consultant all
information as may be reasonably requested by Consultant to enable Consultant
to undertake the efforts contemplated by this Agreement, and to make an
investigation of the Client and its business prospects. The Company shall
make available to Consultant names, addresses, and telephone numbers as
Consultant may need to verify or substantiate any such information provided.
11. Consultant agrees that it will at all times, to the best of its
experience, ability and talents, perform all the duties that may be required
of and from Consultant pursuant to the terms of this Agreement. Consultant
does not guarantee that is efforts will have any impact on the Clients'
business or that any subsequent financial improvement will result from
Consultants' efforts.
12. Consultant is not a law firm; neither is it an accounting firm.
Consultant does, however, retain professionals in those capacities to better
enable Consultant to provide consulting services. Client represents that they
have not nor will they construe any of the Consultants' representations to be
statements of law. Client has and will continue to seek the independent
advice of legal and financial counsel regarding all material aspects of the
transactions contemplated by this Agreement, including the review of all
documents provided by Consultant to Client and all opportunities Consultant
introduces to Client.
13. The execution and performance of this Agreement has been duly
authorized by all requisite individual or corporate actions and approvals and
is free of conflict or violation of any other individual or corporate actions
and approvals entered into jointly and severally by the parties hereto. This
Agreement represents the entire Agreement between the parties hereto, and
supersedes any prior agreements with regards to the subject matter hereof.
This Agreement may be executed in any number of facsimile counterparts with
the aggregate of the counterparts together constituting one and the same
instrument. This Agreement constitutes a valid and binding obligation of the
parties hereto and their successors, heirs and assigns and may only be
assigned or amended by written consent from the other party.
14. In the event either party engages an attorney to enforce this
Agreement or to obtain relief from any default hereunder, the non-prevailing
party shall reimburse the prevailing party for all legal and other costs
incurred in connection therewith.
15. If Consultant dies during the term of this Agreement, the Company
and American Dairy shall have not further obligation under this Agreement.
16. Consultant agrees that during the term of this Agreement, or
extension thereto, Consultant will not, directly or indirectly, disclose to
any person not authorized by the Company and American Dairy to receive or use
such information, any of the Company and/or American Dairy's confidential and
proprietary data, information or techniques, or give to any person not
authorized by the Company and/or American Dairy to receive it any information
that is not generally known to anyone other than the Company and American
Dairy or its agents, or that is designated by the Company and American Dairy
as "limited," "confidential," or otherwise marked to indicate its confidential
nature.
17. This Agreement may not be assigned by either party without the
prior written consent of the other party.
18. This Agreement is the only agreement or understanding between the
parties hereto with respect to the advice and consulting services to be
provided by Consultant to the Company and American Dairy. All negotiations,
commitments, and understandings of both parties have been incorporated herein.
This Agreement cannot be modified except by a written document signed by a
party to be charged therewith.
19. This Agreement shall be governed by and interpreted in accordance
with the laws of the state of Utah.
20. If, and to the extent that, any court of competent jurisdiction
holds any provision of this Agreement to be invalid or unenforceable, such
holding shall in no way affect the validity of the remainder of the Agreement.
21. No failure by any party to insist on the strict performance of
any covenant, duty, agreement, or condition of this Agreement, or to exercise
any right or remedy consequent on a breach thereof, shall constitute a waiver
of any such breach or any other covenant, agreement, term, or condition.
[Signature page to follow.]
DATED the day and year first above-written.
LAZARUS INDUSTRIES, INC.
By /s/ Xxxx X. Xxxxxxx
Its: President
AMERICAN DAIRY HOLDINGS, INC.
By /s/ Leng You-Bin
Its: President
DANBURY PROPERTIES, LLC
By /s/ Xxxx X. Xxxxxxx
Its: Managing Member
CONSENT
The undersigned hereby consent to paragraph 9 above.
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
