Document:

Unassociated Document

    
      
         

        
          

        

      

      
        PLACEMENT
AGENT AGREEMENT 

          
            

          

        

      

      

      September
__, 2008

      

      Legend
Merchant Group, Inc.

      201
Mission 2nd
floor

      San
Francisco CA 94105

      

      Dear
Sirs:

      

      The
undersigned, China Agri-Business, Inc. hereby agrees with Legend Merchant Group,
Inc. ("Legend" or "Placement Agent") as follows:

      

      
        
          	
                  1.

                	
                  Securities
      Offered.   An aggregate of a minimum of $500,000 and
      a maximum of $1,500,000 of units (the  “Units”) each
      Unit consisting of (i) a convertible promissory note (the “Notes”) in the
      principal amount of  $25,000, and (ii) warrants to purchase
      25,000 shares of common stock, par value $0.001 per share
      (the  “Series C
      Warrants”) (the “Offering”). The
      Notes are convertible, in part or in full, at a conversion price
      of  $0.50 per share (the “Conversion
      Price”) into shares of common stock of the Company (the “Conversion
      Shares”). The
      Series C Warrants are exercisable, in part or in full, at an exercise
      price of $1.50 per  share into shares of common stock of the
      Company on a one to one basis (the “Series C Warrant
      Shares”).  25,000 Series C Warrant Shares are issuable
      for each Unit. In addition, upon exercise of the Series
      C  Warrant, each Series C Warrant holder shall be issued a
      nonregistered series D warrant (collectively with  the Series
      C    
      Warrants, the “Warrants”) to
      purchase shares of the Company’s common stock in an
      amount  equal to the number of Series C Warrant Shares issued
      upon each exercise. The Series D Warrants  shall
      be  exercisable, at an exercise price of $2.00 per share, into
      shares of common stock of the Company on a one  to one basis.
      The Notes and the Warrants may hereinafter be referred to collectively as
      the “Securities.”  The
      terms and conditions of the Offering shall be substantially as set forth
      on the Term Sheet annexed  hereto as Exhibit
      A.

                
	 	 
	

                  2.

                	

                  Capitalization.
      The
      Company shall have approximately 12,958,574 shares of common stock issued
      and outstanding immediately prior to this Offering.
  

                

        

      

       

      
        	
                3.

              	
                Purchase
      Price. $25,000 per Unit (the “Unit Purchase
      Price”).

              

      

      

      
        	
                4.

              	
                Closing
      Date. On one or more dates on or prior to September 30, 2008, or
      such other mutually agreed upon
date.

              

      

      

      
        	
                5.

              	
                Private
      Placement Memorandum.  The Company has prepared a Private
      Placement Memorandum covering the proposed offering (the “Memorandum”)
      which shall meet the anti-fraud and other requirements of the federal and
      state securities laws.  The Memorandum shall be in form and
      substance satisfactory to Legend and its counsel.  The Company
      agrees that it shall modify or supplement the Memorandum during the course
      of the Offering to insure that the Memorandum does not contain any untrue
      statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein not
      misleading in light of the circumstances in which they were
      made.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                6.

              	
                Compensation;
      Accountable Expense Allowance.   Legend
      will be paid at each closing of the Offering a cash commission of eight
      percent (8%) of the aggregate subscription price of the Units to be closed
      thereupon that are purchased by investors introduced to the Company by
      Legend (the “Legend
      Investors”).  Legend
      shall also receive a $25,000 accountable expense allowance. Legend shall
      also receive eight percent (8%) in warrant
      coverage, calculated as a percentage of the Conversion Shares.
      The Placement
      Agent’s warrants shall have an exercise price of $1.00 per share.
      Accordingly, if the Minimum Amount of 20 Units is sold, the
      Placement Agent shall be entitled to receive a cash commission of $40,000
      and warrants to purchase 80,000 shares of common stock at an exercise
      price of $1.00 per share, and if the Maximum Amount of 60 Units is sold,
      the Placement Agent shall be entitled to receive a cash commission of
      $120,000 and warrants to purchase 240,000 shares of common stock at an
      exercise price of $1.00 per share. In
      addition, upon the exercise of Series C Warrants resulting from the
      Placement Agent’s warrant solicitation efforts, the Placement Agent shall
      be entitled to receive a cash warrant solicitation fee equal to 5% of any
      warrant exercise proceeds that it has actively solicited (collectively
      with the 8% cash commission described above, the “Commissions”),
      as well as 8% warrant coverage, calculated as a percentage of the Series C
      Warrant Shares issued as a result of the Placement Agent’s warrant
      solicitation efforts.

              

      

      

      
        	
                7.

              	
                Fee
      Tail. Legend
      shall be entitled to a Placement Agent’s Fee, calculated in the manner
      provided in Section 6, with respect to any securities purchased in any
      subsequent offering (“Subsequent Offering”) by investors whom Legend had
      introduced to the Company during the term of this engagement if such
      Subsequent Offering is consummated at any time within (i) the 6-month
      period following the consummation of this Offering and (ii), if no
      Offering shall have been consummated during the term of this engagement,
      the six month period following the expiration or termination of this
      Agreement.

              

      

      

      
        	
                8.

              	
                Future
      Transactions. If, at any time during the term
      of this engagement, or within the 6-month period following consummation of
      this Offering, the Company or any of its subsidiaries (i) disposes of or
      acquires business units or acquires any of its outstanding equity
      securities or makes any exchange or tender offer or enters into a merger,
      consolidation or other business combination or any recapitalization,
      reorganization, restructuring or other similar transaction, including,
      without limitation, an extraordinary dividend or distribution or a
      spin-off or split-off (each, a “Transaction”), and the Company decides to
      retain a financial advisor for such Transaction, Legend shall have the
      right to act as one of the Company's financial advisors for any such
      Transaction; or (ii) decides to finance or refinance any indebtedness
      using a manager or agent, Legend (or any affiliate designated by Legend)
      shall have the right to act as a manager, placement agent or lead agent
      with respect to such financing or refinancing; or (iii) determines to
      raise funds by means of a public offering or an Offering of equity or debt
      securities using an underwriter or placement agent, Legend shall have the
      right to act as an underwriter, initial purchaser or placement agent for
      such financing. In each case where Legend so serves, Legend shall be
      entitled to an allocation of such percentage of the total fees paid in
      connection with the foregoing Transaction as shall be mutually acceptable
      to the Company and the lead manager, agent or underwriter. If Legend or
      its affiliates decides to accept any such engagement, the agreement
      governing such engagement will contain, among other things, provisions for
      customary fees for Transactions of similar size and nature and the
      provisions of this Agreement, including indemnification, which are
      appropriate to such
Transaction.

              

      

      

      
        	
                9.

              	
                Accountable
      Expenses.  Whether or not the offering is successfully
      completed, it shall be the Company's obligation to bear all of its
      expenses in connection with the proposed Offering, including, but not
      limited to, the following:  filing fees, printing and
      duplicating costs, the Company's and Legend's postage, delivery, and
      advertising expenses, registrar and transfer agent fees, reasonable
      counsel and accounting fees of the Company and issue and transfer
      taxes.

              

      

      

      
        	
                10.

              	
                Further
      Representations and Agreements of the Company.  The
      Company further represents and agrees that (i) it is authorized to enter
      into this Agreement and to carry out the Offering contemplated hereunder
      and this Agreement constitutes a legal, valid and binding obligation of
      the Company, enforceable in accordance with its terms, (ii) the Company
      will make itself reasonably available to Legend, its agents, auditors,
      counsel, officers and directors to discuss with Legend any aspect of the
      Company or its business which Legend reasonably may deem relevant, (iii)
      the Company will deliver to Legend at each closing of the Offering: (a) a
      certificate of each  of the Company's President and Treasurer to
      the effect that the Memorandum does not contain any untrue statement of
      material fact or fail to state any material fact required to be stated
      therein or necessary to make the statements therein not misleading in
      light of the circumstances in which they were made, and all necessary
      corporate approvals have been obtained to enable the Company to deliver
      the Securities in accordance with the terms of the Offering , and (iv) at
      or prior to any closing, the Company will furnish to Legend any documents,
      certificates and opinions, containing such representations, warranties,
      covenants, agreements and information as Legend may reasonably
      request.

              

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      
        	
                11.

              	
                Further
      Agreements of Legend.   Legend
      will comply with all applicable rules and regulations
      in     connection with the sale of the
      Securities.

              

      

      

      
        	
                12. 

              	
                Indemnification.

              

      

      

      (a)
Subject to the conditions set forth below, the Company and Legend hereby agree
that they will indemnify and hold harmless each other and each director,
officer, employee or representative thereof and each person controlling,
controlled by or under common control with such party within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act (individually, an
"Indemnified Person") from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all reasonable legal fees and other expenses and disbursements incurred in
connection with investigating, preparing to defend or defending any claim
action, suit or proceeding (a "Claim"), including any inquiry or investigation,
commenced or threatened, or in appearing or preparing for appearance as a
witness in any Claim, including any inquiry, investigation or pretrial
proceeding such as a deposition) (collectively a "Loss") to which such
Indemnified Person may become subject under the Act, the 1934 Act or other
federal or state statutory law or regulation at common law or otherwise, arising
out of an act or omission of the other party related to (i) this Agreement, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the Memorandum (except those statements given by an Indemnified Person for
inclusion therein) or omission of a material fact from the Memorandum delivered
by such party, or (iii) the breach of any representation or warranty made by the
other party in this Agreement.  The parties further agree that upon
demand by an Indemnified Person at any time or from time to time, they will
promptly reimburse such Indemnified Person for any Loss actually and reasonably
paid by the Indemnified Person as to which the other party has indemnified such
Indemnified Person pursuant hereto.  Notwithstanding the foregoing
provisions of this Paragraph 12, any such payment or reimbursement by the other
party of fees, expenses or disbursements incurred by an Indemnified Person in
any Claim in which a final judgment by a court of competent jurisdiction (after
all appeals or the expiration of time to appeal) is entered against such
Indemnified Person as a direct result of such person's gross negligence, bad
faith or willful misfeasance will be promptly repaid to the other
party.

      

      (b) In
the event any Claim shall be brought or threatened against an Indemnified
Person, prompt notice of such action shall be given by such Indemnified Person
to the party from whom indemnification is or may be sought pursuant to this
Section 12 (the “Indemnifying Party”), in writing, together with a copy of all
papers served on, or received by, such Indemnified Person in connection with
such action; provided, however, that failure
to give such notice shall not affect the Indemnified Person’s rights under these
indemnification provisions, unless, and only to the extent that, such failure
results in the forfeiture by the Indemnifying Party of substantive rights or
defenses.  If such an event occurs, the Indemnifying Party may, by
notice to the Indemnified Person, assume the defense of such action, including
the employment of counsel and the payment of all expenses.  Each
Indemnified Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the Indemnified Person unless (a) the
employment thereof has been specifically authorized by the Indemnifying Party in
writing or (b) the Indemnifying Party has failed to assume the defense and
employ counsel (in which cases the Indemnified Party shall have the right to
employ its own counsel and in such cases any reasonable fees and expenses of
such counsel shall be paid by the Indemnifying Party).  In the event
the named parties, or parties threatened to be named, to any such action
(including any impleaded parties or parties threatened to be impleaded) include
both the Company and Legend such that each is both an Indemnified Person and an
Indemnifying Party, each party have the right to employ its own counsel and in
such each shall bear the costs and expenses of its own counsel.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (c) In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in paragraph (a) of this Section 12 is due in
accordance with its terms, but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and Legend shall
contribute to the aggregate Losses to which the Company and Legend may be
subject in such proportion so that Legend is responsible for that portion
represented by the percentage that the aggregate of its commission and expenses
under this Agreement bears to the aggregate offering price for all Securities
sold under the Memorandum to the Legend Investors and the Company is responsible
for the balance, except as the Company may otherwise agree to reallocate a
portion of such liability with respect to such balance with any other person;
provided, however, that no
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Act shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  For purposes of this
paragraph (c), any person controlling, controlled by or under common control
with Legend, or any partner, director, officer, employee, representative or any
agent of any thereof, shall have the rights to contribution as Legend and each
person who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the 1934 Act, each officer of the Company and each director of the
Company shall have the same rights to contribution as the
Company.  Any party entitled to contribution shall, promptly after
receipt of notice of commencement of any Claim against such party in respect of
which a claim for contribution may be made against the other party under this
paragraph (c), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation it or they may have hereunder or
otherwise than under this paragraph (c).  The indemnity and
contribution agreements contained in this Paragraph 10 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Indemnified Person or any termination of this
Agreement.

      

      
        	
                13.

              	
                 Confidentiality.     Except
      as to the extent required by law, each of the parties agrees that it will
      not disclose, and will not include in any public announcement, the name of
      the other party, unless expressly agreed to by the other party or unless
      and until such disclosure is required by law or applicable regulation, and
      then only to the extent agreed to or required. The Placement Agent
      will not use any confidential information of the Company or disclose any
      confidential information of the Company to third parties in each instance
      without securing the prior written consent of Company. For purposes of
      this agreement, confidential information includes certain information and
      data which is material non-public information and which the Company wishes
      to keep confidential. Confidential information may include information or
      materials in oral, written, pictorial, magnetic or graphic form or
      maintained or transferred in any other
  media. 

              

      

      

      
        	
                14.

              	
                Governing
      Law and Jurisdiction.  New York Law; New York
      Courts

              

      

      

      CHINA
AGRI-BUSINESS, INC.

      

      
        
          
            
              
                
                  
                    	
                            By: 
      

                          	/s/
      Liping Deng
	
                            Name:
      Liping Deng

                          
	
                            Title:
       President

                          
	 
      	 
      
	
                            Confirmed
      and Agreed To:

                          
	 
      
	
                            LEGEND
      MERCHANT GROUP, INC.

                          
	 
      	 
      
	
                            By:

                          	 
      
	
                            Name:
      David W. Unsworth Jr.

                          
	
                            Title:
      CEO

                          

                  

                

              

            

          

        

      

      
        
           

        

        
          4Unassociated Document

    

    

    January
28, 2008

    

    Liping
Deng, CEO

    China
Agri-Business, Inc.

    Finance
Plaza, 9th Floor

    Hi-Tech
Road No. 42

    Hi-Tech
Industrial Development Zone

    Xi’An,
Shaanxi

    China

    

    c/o Jeffrey
A. Rinde, Esq.

    Hodgson
Russ LLP

    

    CONFIDENTIAL

    Re:  Business
Advisory Agreement

    

    Dear Mr.
Deng :

    

    This
letter confirms our mutual understanding and agreement (“Agreement”) relating to
the business advisory fees (“Fees”) payable to Legend Merchant Group, Inc.
(“Legend”), China Agri-Business, Inc. (“Company”), a Maryland corporation, for
Legend’s business advisory services rendered in connection with any equity
and/or debt investment, merger, acquisition, partnership, joint venture,
investment, strategic alliance or any other business combination (any such
transaction is referred to herein as a “Transaction”), entered into by the
Company with a business entity and/or individual ( “Entity”) that was introduced
to the Company by Legend.

    

    Legend
hereby agrees to provide such business advisory services to the Company on a
“best efforts, basis for a term (“Term”) of 6 months in accordance with the
terms and conditions of this Agreement.  Legend makes no assurances
that the provision of its business advisory services hereunder will be
beneficial to the Company under any circumstances.

    

    It is
further understood and agreed by the parties hereto that the Company is entering
into this Agreement for the purpose of inducing Legend to provide business
advisory services in connection with the Company’s business interests with
investment banking firms, venture firms, hedge funds, brokerage firms,
investors, financiers, buyers and/or sellers who may participate in a
Transaction with the Company. During the period of the contract Legend will
perform a continuous due diligence process which will include visiting Company
management, and visiting the Company.  While Legend represents and
warrants using its best efforts to provide business advisory services, it is
specifically understood that no assurances can be made as to the benefit to the
Company of such services.  

    
      
         

        NEW YORK
· SAN FRANCISCO
·
FLORIDA

      

      Member
NASD · NFA
· ARCAEx · PCX ·
SPIC

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    Now,
therefore, in consideration of the mutual promises and covenants made herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereto hereby agree
as follows:

    

    1.  The
Company shall pay to Legend the business advisory Fees related to its business
advisory services upon the Company consummating a Transaction during the Term of
this Agreement or within 18 months after the date of the termination of this
Agreement with an Entity introduced by Legend to the Company during the term of
this Agreement.  The Company acknowledges that during the Term of this
Agreement and the eighteen months that follow, the Company shall have an
affirmative obligation to promptly notify Legend when and if it is formally
negotiating with an Entity, entering into a Letter of Intent with an Entity
and/or consummating a Transaction with an Entity.

    

    2.  Legend
shall be deemed to have introduced the Entity to the Company if (a) the Company
has no prior knowledge of the interest by the Entity in the proposed Transaction
and/or (b) Legend provides an introduction to a representative of such Entity
who is in a position to evaluate the Transaction and whose normal function is to
recommend or commit to such Transactions on behalf of such Entity.

    

    3.  In
the event of any equity and/or debt investment, and although not the primary
basis intended with this Agreement; a merger, acquisition, partnership, joint
venture or other business combination by and between the Company and the Entity,
in which Legend was instrumental in introducing to the Company, the Company
shall pay to Legend the business advisory Fees as set forth in the formula
appended hereto as Schedule
I.  The Fees shall be paid in cash and shall be due and owing
on the date and at the time the Transaction is first consummated.  In
addition to the foregoing Fees, the Company also agrees to issue to Legend a
five-year option (“Option”) sufficient to purchase the number of shares of
common stock of the Company that equal eight percent (8%) of the securities
issued and sold on behalf of the Company in a Transaction and/or to an
Entity.  The exercise price of the Option shall be the per share price
of the securities issued and sold on behalf of the Company in a Transaction
and/or to an Entity.  The Option will participate in all forward and
reverse stock splits and stock dividends or any readjustment to the shares
outstanding.

    

    4.  Legend
agrees that it will use its best efforts to assist the Company with its business
advisory services.  However, Legend is not an agent of the
Company.  Rather, Legend is an independent contractor and business
advisor who is doing business with the Company as exclusive, independent
business advisor.  Both the Company and Legend recognize and
acknowledge that Legend has no authority to execute any agreements on behalf of
the Company.

    
       

      NEW YORK
· SAN FRANCISCO
·
FLORIDA

      Member
NASD · NFA
· ARCAEx · PCX ·
SPIC

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    5.  If
the Company was aware of an Entity from a source other than Legend prior to the
date that Legend provides an introduction or otherwise makes the Company aware
of the Entity’s interest, the Company must provide Legend with evidence of this
fact within 15 business days.  If the Company does not provide such
evidence within this time period, the Company will be deemed to have expressly
waived any objection it has to paying Legend the business advisory Fees in
accordance with this Agreement.  If, however, the Company does provide
such evidence within the time specified, the Company will have no obligation to
Legend to pay the business advisory Fees with respect to the introduction of
that particular Entity.

    

    6.  In
consideration of such financial advisory services, the Company agrees to pay
Legend Merchant Group, Inc a non-refundable and non-accountable retainer of
$25,000, which shall be payable at the closing and from the gross proceeds of
the initial Transaction.  In addition, as and for additional consideration
and as a material inducement for Legend to enter into this agreement, the
Company agrees to issue to Legend or its designee(s), upon execution and
delivery of this Agreement, an option to purchase 100,000 shares of restricted
common stock of the Company at an exercise price equal to the per share price of
the Common Shares, as defined and determined in accordance with the Term Sheet
dated December 25, 2007 and attached hereto as Exhibit A.  The
common stock will have anti-dilution for stock splits and other similar
transactions.  The foregoing compensation shall be in addition to any other
compensation and reimbursement of expenses described herein.

    

    7.    The
company shall give Legend a right of first refusal to any financing for a period
of one year from the date of this agreement.

     

    8.  Either
party hereto may terminate this Agreement at any time upon 30 days written
notice, without any liability or continuing obligation, except that the
termination of this Agreement shall not affect the business advisory Fees
payable to Legend as provided in paragraph 1 herein.

    

    9.  Any
controversy, dispute or claim between the parties relating to this Agreement
shall be resolved by binding arbitration in accordance with the rules of the
American Arbitration Association.  If either party to this Agreement
shall bring a complaint against the other party for relief, declaratory or
otherwise, arising out of this Agreement, the prevailing party shall be entitled
to recover its legal, accounting and related costs and expenses as may be
determined.

    

    10.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.  This Agreement is the sole and entire agreement
between the parties hereto pertaining to its subject matter and supersedes all
prior oral and written agreements, representations and understandings of the
parties hereto.  No modifications of the Agreement shall be binding
unless agreed to in writing by the parties hereto.  This Agreement
shall be binding on and inure to the benefit of the successors and assigns of
the parties hereto provided that neither this Agreement nor any of Legend's
rights hereunder may be assigned by Legend without the prior written consent of
the Company.

     

    NEW YORK
· SAN FRANCISCO
·
FLORIDA

    Member
NASD · NFA
· ARCAEx · PCX · SPIC

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    
      Best
regards,

    

    David W.
Unsworth Jr.

    CEO/Chairman

    LEGEND
MERCHANT GROUP, INC

    

    
      
        
          	
                  By:

                	 
      	 
      	
                  Dated:
      January 28, 2008

                
	 
      	
                  David
      W. Unsworth Jr.

                	 
      	 
      
	 
      	
                  CEO

                	 
      	 
      

        

      

    

    

    AGREED
AND ACCEPTED:

    

    China
Agri-Business, Inc.

     

    
      	
              By:

            	/s/
      Liping Deng	 	 
	 
      	 
      	 	 
	
              Liping
      Deng, CEO

            	 	 

    

     

    
      NEW YORK
· SAN FRANCISCO
·
FLORIDA

      Member
NASD · NFA
· ARCAEx · PCX ·
SPIC

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    Schedule
I

    

    

    The
amount of the business advisory Fees that the Company shall pay to Legend in
connection with a Transaction in which the Company was introduced by Legend
shall be determined as follows:

    

    
      	
            	
              ·

            	
              Eight
      percent of the Gross Aggregate Consideration less than $5 million;
      plus

            

    

     

    
      	
            	
              ·

            	
              Six
      percent of the Gross Aggregate Consideration over $5 million to $10
      million; plus

            

    

    

    
      	
            	
              ·

            	
              Four
      percent of the Gross Aggregate Consideration over $10 million to $20
      million; plus

            

    

    

    
      	
            	
              ·

            	
              Two
      percent of the Gross Aggregate Consideration over $20
    million.

            

    

     

    
      NEW YORK
· SAN FRANCISCO
·
FLORIDA

      Member
NASD · NFA
· ARCAEx · PCX ·
SPIC

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