AMENDED PRELIMINARY FINANCIAL SERVICE AGREEMENT
The
Preliminary Financial Service Agreement is entered into as of May 14, 2008
between ELZ
Accountancy Corp., its designated employee Xxxxxx Xxxx
(collectively “Zhao”), and China
Power Equipment, Inc.
(the
‘Company”). ELZ Accountancy Corp. hereby agrees to designate its employee Xxxxxx
Xxxx to serve as Chief Financial Officer of China Power Equipment, Inc., for
an
initial period of two years. The annual compensation, paid quarterly to ELZ
Accountancy Corp. or Xxxxxx Xxxx at the beginning of each quarter, shall be
US
$45,000.
Specific
responsibilities shall include:
1. |
Review
of the historical accounting
records
|
2. |
Implementation
of appropriate internal financial
controls.
|
3. |
Interacting
with the Company’s internal accounting
staff
|
4. |
Liaison
with the Company’s auditors and securities attorney regarding filing and
reporting requirements
|
5. |
Preparation
of consolidated financial statements including
footnotes
|
6. |
Preparation
of MD&A for inclusion in SEC
filings
|
7. |
Preparation
as may be required of forecasts and
budgets.
|
8. |
Signing
off on financial statements and regulatory
filings
|
9. |
Maintaining
the books and records and the US bank account(s) for the parent
company
|
10. |
Meeting
with company management and visits to the Company’s facilities as may be
required
|
11. |
Participation
at investor meetings and conferences as may be
required
|
12. |
Taking
phone calls from the financial community and
investors
|
13. |
Other
activities appropriate to the responsibilities of being the chief
financial officer
|
14. |
The
preparation and filing of any appropriate state and Federal withholding
and tax filings.
|
Zhao
and
the Company agree that the performance, compensation and time commitment by
Zhao
shall be reviewed quarterly, and appropriate adjustments shall be made thereof,
subject to parties written agreement.
Zhao
shall be entitled to reimbursement for appropriate business expenses, as well
as
travel and related expenses.
The
Company agrees to issue to Zhao 50,000 shares of stock option upon the effective
of the registration statement and 25,000 shares every six months subsequently
to
purchase the Company’s common shares. The exercise price for the Options granted
upon the effective of registration statement shall be equal to $0.23. The
exercise price for the subsequent Options shall be equal to the lower of the
30
day average stock price or the 180 day average stock price prior to the issue
date. The Options shall
become exercisable upon issuance and shall have a term of five (5) years.
All
Options granted to Zhao shall be subject
to regulatory requirements.
This
Preliminary Financial Service Agreement shall be in force until such time as
a
formal Employment Agreement is entered into by Xxxxxx Xxxx and the Company,
and
will be subject by termination by either party providing the other party four
weeks written notice.
Agreed
to:
Xxxxxx
Xxxx/ELZ Accountancy Corp.
/s/
Xxxxxx Xxxx
|
Date
May 14, 2008
|
/s/
Xx. Xxxxxx Xxxx Title:
Director
|
Date
May 14, 2008
|