Consultancy Agreement.doc

Agreement No This agreement is made on the day of 2005 BETWEEN HAI-O ENTERPRISE SDN BHD, MALAYSIA （海鸥企业有限公司） &HAI-O INDUSTRIAL CO LTD ,SHENZHEN ,CHINA (深圳市海鸥马中实业有限公司)Now it is agreed by the Parties hereto as follows: Both parties, adhering to the Law of the Peoples Republic of China and related rules and regulations, basing on principles of mutual benefits, agreed to form and sign this CONSULTANCY AGREEMENT.ARTICLE ONE General Regulation 1.1. This agreement is made in accordance with the Laws, Rules and Regulations of the local government. All the terms of this agreement will be based on the local requirement and adjusted to suit and meet the companys need.1.2. All activities conducted by both parties should act in accordance with the Laws, Rules and Regulations of the Peoples Republic of China in line with its objective and scope of operation agreed by both parties .1.3.The First Party shall be responsible for the profit and loss account.ARTICLE TWOThe Parties to this AgreementHAI-O ENTERPRISE SDN BHD, MALAYSIA (Company Registration No.: ), a company incorporated in Malaysia and having its place of business at (hereinafter referred to as First Party, Legal Representative: , Position: , Nationality: ); &HAI-O INDUSTRIAL CO LTD, SHENZHEN CHINA (深圳市海鸥马中实业有限公司), (Company Registration No.: 2140976 ) a company incorporated in Shenzhen, China and having its place of business at Unit D 23/F Taiyangdao Bldg 34 Dongmen Rd South Luohu Shenzhen China (hereinafter referred to as Second Party, Legal Representative: Chenhaotian , Position: Manager , Nationality: Chinese);.ARTICLE THREE The Legal Status Between The Two Parties 3.1 The Second Party agrees to work as a consultant and trading assistant to the first party and co-ordinate with the business affairs between Malaysia and China for the first party.3.2. The second party is legally independent from the first party , but financially invested and controlled by the First Party . 3.3. The Second Party could work as a sole agent and a general coordinator for the First Party , as far as the Second Party has ability in dong so.ARTICLE FOUR The Scope of The Second Party s Services4.1. The Second Party will provide the First Party with the services of China business opportunities, consultancy services, financial control and corporate management of China subsidiaries invested by Hai-O, and trading assistance to the First Party, The detailed services are as follows from 4.2. to 4.6.:4.2. China business opportunities -Providing China business information, such as China policy, investing news, exhibition and auction news.-Seeking business partners such as well-known trademarks or brands who are likely to co-operate with Hai-O and develop in Malaysia market. Tongrentang and Sanjiu have already set a good example for further development.4.3. Consultancy services-Provide advice for the company structure and advisory for the business operation.-If needed, some market study or feasibility study on some important projects intended to invest in China will be conducted for the purpose to identify any material issues.-Comment on finding and make a recommendation. -Corporate planning on marketing, taxes, and development. Special report on incoming business.4.4. Trading assistance to the First Party-Providing China business information, such as investing news, products information, buyers and sellers, exhibition and auction news.-Purchasing advice and assistance in China, as required by the First Party.-Import and export formalities between Malaysia and China, if needed.4.5. Corporate management and financial control of China subsidiaries invested by Hai-O Group, -The consultancy as well as internal audit work will be conducted to identify and to ensure that company are within the China law and regulation in doing the business and also identified any alternative for the achievement of the business efficiency. -Overview for the accounting and internal control as well as financial statement of the company. -Internal and external auditing , planning for the Cash flow position of the company and also planning for the budgetary control for the purpose of identified cash inflow and outflow to make sure cash are controllable.-To seek and ensure that internal control are manageable for the purpose to ensure the internal matter are solved.-To ensure that all staff are communicated for the purpose of exchange information. Advice on management of stocks.-Access the financial integrity and accuracy of the company financial statement. -To provide the efficiency corporate services .- Provide conclusion for the assignment. 4.6.There could also provided another services not mentioned from the above as long as the First Party needs it for the purpose of mutual benefit stipulated in this assignment. Both parties could reach another agreement for this purpose.ARTICLE FIVEThe Service Fee5.1. All the services provided are at the expenses of the second parties5.2. With the services of China business opportunities, consultancy services, financial control and corporate management of China subsidiaries invested by Hai-O, and trading assistance to the First Party, the First Party agrees to pay the Second Party for the amount equal to RINGET240,000 annually for the service indicated below excluded any disbursement. China business opportunities 12,000consultancy services 240,000corporate management and financial control of China subsidiaries 12,000 eachtrading assistance to the First Party 36,000 - RM300,0005.3. The agreed amount could not be paid directly to the second party from the first party, but should be debited to the account of the first party . In this way the second party can have a clearer financial picture of its annual operation. ARTICLE SIX The First Partys Rights and Obligation6.1. The First Party is responsible for some tangible support to the Second Party check, approve the whole processing plan, to decide the feasibility and possibility.6.2. The first party should regard the second party as part of the Group, and make the second party as general representative office in China.6.3. To appoint one co-ordinator, better, Chinese speaking person, to be responsible for the contact and co-ordination. ARTICLE SEVEN Second Partys Rights and Responsibilities 7.1. The Second Party should have responsibilities and obligations in giving advice and service as indicated in the article four.7.2. It deems its the First Partys right to disclose enough commercial information necessary to the Second Party for plan processing. 7.3. The Second Party will be responsible for any cost arising from doing the above-mentioned services.7.4. The Second Party ensures to provide the service up to the standard required by the First partyARTICLE EIGHT Duration of this Cooperation 8.1. Period of this cooperation will last for THREE (3) years. Longer duration is vital if the Both Party regard this cooperation as successful. ARTICLE NINE Responsibility for Breaching of Contract 9.1. The First or Second Party should shoulder responsibility for breaching of the Agreement. 9.2. If wrongdoing committed by one party that leads to this Agreement cannot be materialized partly or fully, the party that makes mistake should take the responsibility. If the mistake is shared by both parties, each will take responsibility respectively for breaching of the Agreement according to actual state of affairs. ARTICLE TEN Amendment of This Agreement 10.1. Only upon the agreement of the First, Second parties and their written consent can this Agreement be amended, and/or varied and such amendment and/or verification will only valid and in force after the approval by the authority of the Peoples Republic of China originally handled been obtained. ARTICLE ELEVEN Non-resistible Force 11.1. Due to earthquake, typhoon, flood, fire, war and other non-resistible incident that cannot be foreseeable, its happening and consequences are not able to prevent or avoid, that directly affect the Agreement cannot be implemented as per condition stipulated. Each of the parties that encounters non-resistible incident must immediately report by fax to other parties, and submit details and valid certified documents that show reasons the Agreement cannot be implemented or partially cannot be implemented or need to implement at a later time. Both parties will discuss and decide whether to release or waive implementing a part of the Agreement or implement at a later time. ARTICLE Twelve Arbitration 12.1. Dispute evolved due to the implementation of the contract or related matters, the both parties concerned should settle the dispute amicably through consultation and negotiation. ARTICLE Thirteen The Validity of the Contract 13.1. This Contract is valid on the date the legal representative of the First, Second Party sign and seal and last as long as stimulated in the Article Eight . ARTICLE Fourteen Law Applied 14.1 The signing, validity,