Document:

Unassociated Document

    Exhibit
10.20

     

    
      
        USEPARATION
AGREEMENT AND GENERAL RELEASE

        

        THIS
SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered into
by and between Thomas Stankovich (“Employee”) and Response Genetics, Inc.
(“Employer”), and inures to the benefit of each of Employer’s current, former
and future parents, subsidiaries, related entities, employee benefit plans and
their fiduciaries, predecessors, successors, officers, directors, shareholders,
agents, attorneys, employees and assigns.

         

        URECITALS

        

        A.           Employee
was employed by Employer beginning on November 27, 2006.

         

        B.           Employee’s
employment with Employer ended effective April 2, 2010 (the “Separation
Date”).

         

        C.           Employee
and Employer (collectively, the “Parties”) wish permanently to resolve any and
all actual and/or potential disputes between them, including disputes arising
out of Employee’s employment with Employer or the cessation of that
employment.

         

        NOW,
THEREFORE, for and in consideration of the execution of this Agreement and the
mutual covenants contained in the following paragraphs, Employer and Employee
agree as follows:

         

        1.           UNo
Admission of LiabilityU.  The Parties agree
that neither this Agreement, nor performance of the acts required by it,
constitute an admission of liability, culpability, negligence or wrongdoing on
the part of anyone, and will not be construed for any purpose as an admission of
liability, culpability, negligence or wrongdoing by any party and/or by any
party’s current, former or future parents, subsidiaries, related entities,
predecessors, successors, officers, directors, shareholders, agents, employees
and assigns.

         

        2.           USeparation
BenefitUss. In consideration of the
releases granted by Employee herein, and other good and sufficient
consideration, Employer shall provide Employee with the following benefits
(together, the “Separation Benefits”).  First, the Company shall
provide Employee with a continuation of the contributory health benefits to
which he was entitled as of the Separation Date, through October 31,
2010.  Second, the Company hereby agrees that the remaining unvested
stock options granted to Employee on or about June 16, 2009 (the “2009 Stock
Option Grant”) shall all vest immediately and the entire 2009 Stock Option Grant
shall remain exercisable through April 2, 2011. All options held by
Employee, other than the 2009 Stock Option Grant, that remain unvested as of the
Separation Date shall have been forfeited by Employee as of the Separation Date,
and all such options that were vested as of the Separation Date shall remain
outstanding and exercisable through July 1, 2010. Employee acknowledges and
agrees that he is not otherwise entitled to the Separation
Benefits.

         

        3.           UWages and
Vacation Time PaidU.  Employee
acknowledges that he has been paid all wages by Employer, including pay for any
unused vacation accrued through the Termination Date, and that such receipt was
not conditioned upon the execution of this Agreement.

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        4.           UProtection
of Confidential InformationU.  Employee
acknowledges that during the course of his employment, he had ongoing access and
exposure to, and obtained knowledge of Confidential Information belonging to
Employer.  For purposes of this Agreement, “Confidential Information”
means all information that has actual or potential economic value to Employer
from not being generally known to the public or to other persons who can obtain
economic value from its disclosure or use.  Confidential Information
includes, among other things, any and all information disclosed to Employee or
known by Employee as a consequence of his employment with Employer that is not
generally available to the public (unless such information enters the public
domain and becomes available to the public through no fault on Employee’s part),
about Employer, its finances, operations, business programs, officers,
directors, partners, joint ventures, employees, contractors, vendors, suppliers,
processes, procedures manuals, computer programs, sales services, research
projects, product plans and pipelines, data, accounts, billing methods, pricing,
profit margins, sales, statistical data, business methods, systems, plans,
internal affairs, legal affairs, potential or existing reorganization plans,
Active Prospective Customers, Customers, transactions with Customers, lists of
Customers’ names and addresses, sales and marketing techniques, any and all
information entrusted to Employer by third parties and any and all information
defined as a “Trade Secret” under the Uniform Trade Secrets Act.  An
“Active Prospective Customer” means any Person (which includes an individual,
partnership, corporation or other entity) who or which (i) during the six
(6) months prior to the Effective Date of this Agreement, Employee contacted on
behalf of Employer for the purpose of soliciting such Person to become a client
or customer of Employer, or (ii) is listed as a potential client or
customer of Employer in any database or compilation belonging to Employer that
was used by Employee while employed by Employer.  Employee and
Employer agree that, without limiting the foregoing, the following are expressly
understood to be Confidential Information under this Agreement:

         

        (a)         any
information or documentation (including without limitation, policies, business
plans, training manuals) relating to Employer’s sales, marketing, cross-selling,
compensation, incentive, or personnel programs;

         

        (b)         the
identity of key contacts at any Customer, as well as the identity of any Active
Prospective Customer of Employer;

         

        (c)         the
specific mix and quantities of Employer’s product purchased by Customers or
expected to be purchased by Active Prospective Customers;

         

        (d)         internal
feedback from Customers and Active Prospective Customers (whether positive or
negative) regarding Employer’s products or services;

         

        (e)         Employer’s
operations manuals, pricing policies and related information, marketing manuals
and plans, business strategies, techniques and methods; and

         

        (f)         any
other information deemed to be “trade secret” under existing trade secret
law.

         

        Employee
agrees that he will not use, or willfully disclose to any Person, at any time,
any Confidential Information (determined as of the Effective Date of this
Agreement), except (a) with the prior written consent of Employer; or
(b) to the extent necessary to comply with law or a valid order of a court
of competent jurisdiction, in which case Employee shall notify Employer as
promptly as practicable (if possible, prior to making such
disclosure).  Employee also agrees to use reasonable efforts to
prevent such prohibited use by any other Person.

         

         

        
          
             

          

          
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        5.           UNon-Solicitation
and Non-InterferenceU.  Employee agrees
that for a period of twelve (12) months following the Effective Date hereof,
Employee shall not, directly or indirectly, interfere with Employer’s business
by: (i) inducing or attempting to induce any employee of Employer to end
his or her employment; (ii) inducing or attempting to induce a consultant,
independent contractor, licensee or other third party to sever any relationship
with Employer; (iii) assisting any other person, firm or entity in the
solicitation of any such employee, consultant, independent contractor, licensee
or third party; or (iv) disrupting or seeking to disrupt in any manner,
directly or indirectly, any contractual relationship then existing between
Employer and any Client or investor.

         

        6.           UEmployee’s
General ReleaseU.  In consideration
of the benefits provided under this Agreement, including without limitation the
Separation Benefit, Employee on his own individual behalf and on behalf of
his heirs, executors, administrators, assigns and successors, fully and
forever releases and discharges Employer and each of its current, former and
future parents, subsidiaries, related entities, employee benefit plans and their
fiduciaries, predecessors, successors, officers, directors, shareholders,
agents, employees and assigns (collectively, “Releasees”), with respect to any
and all claims, liabilities and causes of action, of every nature, kind and
description, in law, equity or otherwise, which have arisen, occurred or existed
at any time prior to the signing of this Agreement, arising out of, or in
connection with, or resulting from Employee’s employment with Employer, or the
cessation of that employment.

         

        7.           UWaiver of
Employment-Related ClaimsU.  Employee
understands and agrees that, with the exception of potential employment-related
claims identified below, he is waiving and releasing any and all rights or
remedies he may have had or now has to pursue against Employer or any of the
Releasees for any state or federal employment-related causes of action,
including without limitation, claims of wrongful discharge, breach of contract
(including stock option-related contracts and grants), breach of the covenant of
good faith and fair dealing, fraud, violation of public policy, defamation,
discrimination, personal injury, physical injury, emotional distress, claims
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans With Disabilities Act, the Federal Rehabilitation
Act, the Family and Medical Leave Act, the Health Insurance and Portability and
Accountability Act, the Equal Pay Act of 1963, and any other federal, state or
local laws and regulations relating to employment, conditions of employment
(including wage and hour laws) and/or employment
discrimination.  Claims not covered by Employee’s release are
(i) claims for unemployment insurance benefits, (ii) claims under
state Workers’ Compensation law (Employee represents, however, that he is not
aware of having sustained any work-related injuries), (iii) administrative
charges before the U.S. Equal Employment Opportunity Commission,
(iv) claims arising out of the breach of this Agreement, and
(v) claims challenging or seeking a determination in good faith of the
validity of this release or waiver under the Age Discrimination in Employment
Act (nor does this Agreement impose any condition precedent, penalty, or costs
for doing so).  Employee expressly acknowledges that Employer would
not enter into this Agreement but for the representation and warranty that
Employee is hereby releasing any and all claims of any nature whatsoever, known
or unknown, whether statutory or at common law, which Employee now has or could
assert directly or indirectly against any of the Releasees (other than as
expressly set forth herein).

         

         

        
          
             

          

          
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        8.           UWaiver of
Unknown ClaimsU.  Employee
expressly waives any and all statutory and/or common law rights he may have to
the effect that a General Release does not release unknown claims, including any
rights under Section 1542 of the Civil Code of the State of California, which
states as follows:

         

        “A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor.”

         

        Employee
expressly agrees and understands that the Releases given by him pursuant to this
Agreement apply to all unknown, unsuspected and unanticipated claims,
liabilities and causes of action which may exist against Employer, or any of the
other Releasees.

         

        9.           UConsideration
PeriodU.  This Agreement is
intended to release and discharge any claims by Employee under the Age
Discrimination and Employment Act.  To satisfy the requirements of the
Older Workers’ Benefit Protection Act, 29 U.S.C. section 626(f), the
Parties agree as follows:

         

        (a)         Employee
acknowledges that he has read and understands the terms of this
Agreement.

         

        (b)         Employee
acknowledges that he has been advised to consult with independent counsel
regarding this Agreement, and that he has received all counsel necessary to
willingly and knowingly enter into this Agreement.

         

        (c)         Employee
acknowledges that he has been given twenty-one (21) days to consider the terms
of this Agreement (the “Consideration Period”), has taken sufficient time to
consider whether to execute it, and has chosen to enter into this Agreement
knowingly and voluntarily.  If Employee does not present an executed
copy of this Agreement, including the Termination Certificate attached as
Exhibit A, to Employer’s President and Chief Executive Officer on or before the
expiration of the Consideration Period, this Agreement and the offer it contains
will lapse.

         

        (d)           For
seven (7) days following the execution of this Agreement (should he elect to
execute it), Employee may revoke this Agreement by delivering a written
revocation to Employer’s President and Chief Executive Officer.  This
Agreement shall not become effective until the eighth (8th) day after Employee
executes and does not revoke it (the “Effective Date”).  If Employee
either fails to sign the Agreement during the Consideration Period, or revokes
it prior to the Effective Date, she shall not receive the Separation Benefit
described herein.

         

         

        
          
             

          

          
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        10.           Non-disparagement.  The
Parties agree not to disparage the other in any manner likely to be harmful to
them or their business, business reputation or personal reputation; provided
that the Parties may respond accurately and fully to any question, inquiry or
request for information when required by legal process.

         

        11.           USeverabilityU.  The Parties agree
that if any provision of the releases given under this Agreement is found to be
unenforceable, it will not affect the enforceability of the remaining provisions
and the courts may enforce all remaining provisions to the extent permitted by
law.

         

        12.           Confidentiality
of Settlement.  The Parties
promise and agree that, unless compelled by legal process, they will not
disclose to others and will keep confidential both the fact of and the terms of
this settlement, including the Separation Benefit referred to in this Agreement,
except that they may disclose this information to attorneys, accountants and
other professional advisors to whom the disclosure is necessary to accomplish
the purposes for which they have consulted such professional
advisors.  Employee expressly promises and agrees that, unless
compelled by legal process, she will not disclose to any present or former
employees of Employer the fact or the terms of this Agreement.

         

        13.           UIntegrated
AgreementU.  The Parties
represent and warrant that they are not relying, and have not relied, upon any
representations or statements, verbal or written, made by any other with regard
to the facts involved in this controversy, or their rights (or asserted rights)
arising out of their alleged claims, or the execution and/or terms of this
Agreement, except as provided herein.  The Parties acknowledge that
this Agreement contains the entire agreement between the Parties concerning its
subject matter, and further acknowledge and agree that parol evidence shall not
be required to interpret the Parties’ intent.

         

        14.           UTax
Liability/IndemnificationU. Employee assumes full
responsibility for any and all taxes, interest and/or penalties that may
ultimately be assessed upon the Separation Benefit hereunder.  In the
event that any taxing authority seeks to collect taxes, interest and/or
penalties from Employer on the Separation Benefit conveyed to Employee under
this Agreement, Employee will hold Employer harmless from any and all claims for
such taxes, interest and/or penalties and will indemnify Employer against any
such claims.

         

        15.           UVoluntary
ExecutionU.  The Parties
acknowledge that they have read and understand this Agreement and that they sign
it voluntarily and without coercion.  The Parties further agree that
if any of the facts or matters upon which they relied in signing this Agreement
prove to be otherwise, this Agreement will nonetheless remain in full force and
effect.

         

        16.           UWaiver,
Amendment and ModificationU.  The Parties agree
that no waiver, amendment or modification of any of the terms of this Agreement
shall be effective unless in writing and signed by all parties affected by the
waiver, amendment or modification.  No waiver of any term, condition
or default of any term of this Agreement shall be construed as a waiver of any
other term, condition or default.

         

        17.           UChoice of
LawU. This Separation
Agreement shall be deemed to have been made in California, shall take effect as
an instrument under seal within California, and shall be governed by and
construed in accordance with the laws of the California, without giving effect
to conflict of law principles.  Employee agrees that any action,
demand, claim or counterclaim relating to the terms and provisions of this
Separation Agreement, or to its formation or breach, shall be commenced in
California in a court of competent jurisdiction, and Employee further
acknowledges that venue for such actions shall lie exclusively in California and
that material witnesses and documents would be located in
California.

         

        
          
             

          

          
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        18.           UCounterpartsU.  This Agreement
may be signed in counterparts and said counterparts shall be treated as though
signed as one document.

         

        

        
          
             

          

          
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                    Dated:   April 29,
      2010                        
      

                  	
                    /s/ Thomas
      Stankovich                            
       

                  
	 
      	
                    Thomas
      Stankovich

                     

                     

                  
	 
      	
                    RESPONSE
      GENETICS, INC.

                     

                     

                  
	
                    Dated:  April 29,
      2010                        
      

                  	
                    /s/ Kathleen
      Danenberg                              
      

                  
	 
      	
                    By:  Kathleen
      Danenberg

                  
	 
      	
                            Chief
      Executive Officer and
President

                  

          

        

         

         

        
          
             

          

          
            7CONSULTING
SERVICES AGREEMENT

    

    This
Consulting Services Agreement (this “Agreement”) is dated April 2, 2010, and is
entered into in Dachang Hui Autonomous County, Hebei Province, People’s Republic
of China (“PRC” or “China”) by and among Hebei Anbang Investment Consultation
Co., Ltd. (“Party A”), and Dachang Hui Autonomous County Baosheng Steel Products
Co., Ltd. (“Party B”). Party A and Party B are referred to collectively in this
Agreement as the “Parties.”

    

    RECITALS

    

     (1)
Party A, a company incorporated in the PRC as a foreign investment enterprise,
specializes in the research and development of ferrous metal products and
consulting of enterprise management and investment;

    

     (2)
Party B is engaged in a variety of production of ferrous products (collectively
the “Business”), including the process and sale of the cold rolled steel strip,
cold rolled steel coil, high frequency welded pipe and tin plates; import and
export of steel materials.

    

     (3)
The Parties desire that Party A provide Party B with consulting and other
relevant services in connection with the Business; and

    

     (4)
The Parties are entering into this Agreement to set forth the terms and
conditions under which Party A shall provide consulting and other related
services to Party B.

    

    NOW THEREFORE, the Parties
agree as follows:

    

    1.
DEFINITIONS

    

    1.1 In
this Agreement the following terms shall have the following
meanings:

    

     “Affiliate,”
with respect to any Person, shall mean any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether by ownership of securities or partnership or other ownership interests,
or by contract or otherwise);

    

     “Consulting
Services Fee” shall be as defined in Clause 3.1;

    

    “Indebtedness”
shall mean, as to any Person, any one of the following: (i) money borrowed by
such Person (including principal, interest, fees and charges) for the deferred
purchase price of any property or services, (ii) the face amount of all letters
of credit issued to such Person and all drafts drawn thereunder, (iii) all
liabilities secured by any Lien on any property owned by such Person, whether or
not such liabilities have been assumed by such Person, (iv) the aggregate amount
required to be capitalized under any lease for which such Person is the lessee,
or (v) all contingent obligations (including, without limitation, all guarantees
to third parties) of such Person;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     “Lien”
shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under recording or notice statute, and any lease
having substantially the same effect as any of the foregoing);

    

    “Person”
shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated
organization, entity or other organization or any government body;

    

     “PRC”
means the People’s Republic of China;

    

    “Services”
means the services to be provided under the Agreement by Party A to Party
B, as more specifically described in Clause 2.

    

    1.2 The
headings in this Agreement shall not affect the interpretation of this
Agreement.

    

    2.
RETENTION AND SCOPE OF SERVICES

    

    2.1 Party
B hereby agrees to retain the services of Party A, and Party A accepts
such appointment, to provide to Party B services in relation to the current
and proposed operations of Party B’s business in the PRC pursuant to the terms
and conditions of this Agreement (the “Services”).
The Services shall include, without limitation:

    

    (a)
General Business Operation. Provide general advice and assistance relating
to the management and operation of Party B’s business.

    

    (b) Human
Resources.

    

     (i)
Provide general advice and assistance in relation to the staffing of Party
B, including assistance in the recruitment, employment and secondment of
management personnel, administrative personnel and staff of Party
B;

    

    (ii)
Provide training of management, staff and administrative personnel;

    

    (iii)
Assist Party B to establish an efficient payroll management system;
and

    

    (iv)
Provide assistance in the relocation of Party B’s management and
staff;

    

    (c)
Business Development. Provide advice and assistance in business growth and
development of Party B.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)
Other. Such other advice and assistance as may be agreed upon by the
Parties.

    

    2.2
Exclusive Services Provider. During the term of this Agreement, Party A
shall be the exclusive provider of the Services. Party B shall not seek or
accept similar services from other providers without the prior written approval
of Party A.

    

    2.3
Intellectual Property Rights Related to the Services. Party A shall own all
intellectual property rights developed or discovered through research and
development in the course of providing Services, or derived from the provision
of the Services. Such intellectual property rights shall include patents,
trademarks, trade names, copyrights, patent application rights, copyright and
trademark application rights, research and technical documents and materials,
and other related intellectual property rights including the right to license or
transfer such intellectual property rights. If Party B requires the use of Party
A’s intellectual property rights, Party A agrees to grant such intellectual
property rights to Party B on terms and conditions to be set forth in a separate
agreement.

    

    2.4
Pledge. Party B shall permit and cause the owners of Party B to pledge
their equity interests in Party B to Party A for securing the payment of
the Consulting Services Fee as required pursuant to this Agreement.

    

    3.
PAYMENT

    

    3.1
General.

    

    (a) In
consideration of the Services to be provided by Party A hereunder, Party B shall
pay to Party A a consulting services fee (the “Consulting Services Fee”) during
the term of this Agreement, payable in Renminbi (“RMB”) each quarter, equal to
all of Party B’s net income for such quarter based on the quarterly
financial statements provided under Clause 5.1 below. Such quarterly payment
shall be made within fifteen (15) days after receipt by Party A of the financial
statements referenced above.

    

    (b) Party
B will permit, from time to time during regular business hours as reasonably
requested by Party A, its agents or representatives (including independent
public accountants, which may be Party B’s independent public accountants), (i)
to conduct periodic audits of the financial books and records of Party B, (ii)
to examine and make copies and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the possession or
under the control of Party B, (iii) to visit the offices and properties of Party
B for the purpose of examining such materials described in clause (ii) above,
and (iv) to discuss matters relating to the performance by Party B hereunder
with any of the officers or employees of Party B having knowledge of such
matters. Party A may exercise the audit rights described herein at any time,
provided that Party A provides a ten (10) day written notice to Party B
specifying the scope, purpose and duration of such audit. All such audits shall
be conducted in such a manner as not to interfere with Party B’s normal
operations.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.2 Party
B shall not be entitled to set off any amount it may claim is owed to it
by Party A against any Consulting Services Fee payable by Party B to Party
A unless Party B first obtains Party A’s prior written consent.

    

    3.3 The
Consulting Services Fee shall be paid in RMB by telegraphic transfer to Party
A’s bank account No.______________, or to such other account or accounts as may
be specified in writing from time to time by Party A.

    

    3.4
Should Party B fail to pay all or any part of the Consulting Services Fee due
to Party A in RMB under this Clause 3 within the time limits stipulated,
Party B shall pay to Party A interest in RMB on the amount overdue based on the
three (3) month lending rate for RMB published by the Bank of China on the
relevant due date.

    

    3.5 All
payments to be made by Party B hereunder shall be made free and clear and
without any consideration of tax deduction, unless Party B is required to make
such payment subject to the deduction or withholding of tax.

    

    4.
FURTHER TERMS OF COOPERATION

    

    All
business revenue of Party B shall be directed in full by Party B into a bank
account designated by Party A.

    

    5.
UNDERTAKINGS OF PARTY A

    

    Party B
hereby agrees that, during the term of the Agreement:

    

    5.1
Information Covenants. Party B shall provide to Party A:

    

    5.1.1
Preliminary Monthly Reports. Within five (5) days after the end of
each calendar month the preliminary income statements and balance sheets of
Party B made up to as of the end of such calendar month, in each case prepared
in accordance with the generally accepted accounting principles of the
PRC.

    

    5.1.2
Final Monthly Reports. Within ten (10) days after the end of each
calendar month, a final report from Party B on the financial and business
operations of Party B as of the end of such calendar month, setting forth the
comparison of financial and operation figures for the corresponding period in
the preceding financial year, in each case prepared in accordance with generally
accepted accounting principles of the PRC.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.1.3
Quarterly Reports. As soon as available and in any event within
forty-five (45) days after each Quarterly Period (as defined below),
unaudited consolidated and consolidating statements of income, retained
earnings and changes in financial positions of Party B and its subsidiaries for
such Quarterly Period, and for the period from the beginning of the relevant
fiscal year to such Quarterly Date, and the related consolidated and
consolidating balance sheets as of such Quarterly Period, setting forth in each
case the actual versus budgeted comparisons and a comparison of the
corresponding consolidated and consolidating figures for the corresponding
period in the preceding fiscal year, accompanied by a certificate of Party B’s
Chief Financial Officer, and such certificate shall state that the said
financial statements fairly represent the consolidated and consolidating
financial conditions and results of operations, as the case may be, of Party B
and its subsidiaries, in accordance with the general accepted accounting
principles of the PRC for such period (subject to normal year-end audit
adjustments and the preparation of notes for the audited financial statements).
For the purpose of this Agreement, a “Quarterly Period” shall mean the last day
of March, June, September and December of each year, the first of which shall be
the first Quarterly Period following the date of this Agreement; provided
that if any such Quarterly Period is not a business day in the PRC, then such
Quarterly Period shall be the next succeeding business day in the
PRC.

    

    5.1.4
Annual Audited Accounts. Within 90 days after the end of the
financial year, Party B’s annual audited accounts (setting forth in each
case the comparison of the corresponding figures for the preceding
financial year), shall be prepared in accordance with the generally accepted
accounting principles of the PRC.

    

    5.1.5
Budgets. At least ninety (90) days prior to the beginning of Party
B’s fiscal year, Party B shall prepare a budget in a form satisfactory to
Party A (including budgeted statements of income and sources and uses of cash
and balance sheets) for each of the four quarters of such fiscal year
accompanied by the statement of Party B’s Chief Financial Officer, to the effect
that, to the best of his or her knowledge, the budget is a reasonable estimate
for the corresponding period.

    

    5.1.6
Notice of Litigation. Party B shall notify Party A, within one (1)
business day of obtaining the knowledge thereof, of (i) any litigation or
governmental proceeding pending against Party B which could materially adversely
affect the business, operations, property, assets, condition or prospects of
Party B, and (ii) any other event which is likely to materially adversely affect
the business, operations, property, assets, condition or prospects of Party
B.

    

    5.1.7
Other Information. From time to time, such other information or documents
as Party A may reasonably request.

    

    5.2
Books, Records and Inspections. Party B shall keep accurate books and
records of its business activities and transactions according with PRC’s
generally accepted accounting principles and all other legal requirements.
During an appropriate time and within a reasonable scope requested by Party A,
Party B will permit Party A’s officers and designated representatives to visit
the premises of Party B and to inspect, under the guidance of Party B’s
officers, Party B’s books and records, and to discuss the affairs, finances and
accounts of Party B.

    

    5.3
Corporate Franchises. Party B will do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and maintain its
material rights and licenses.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.4
Compliance with Laws. Party B shall abide by all applicable laws,
regulations and orders of all relevant governmental administration, in
respect to its business and the ownership of its property, including,
without limitation, maintenance of valid and proper governmental approvals
and licenses necessary to provide the services, unless such noncompliance
could not, in the aggregate, have a material adverse effect on the
business, operations, property, assets, condition or prospects of Party
B.

    

    6.
NEGATIVE COVENANTS

    

    Party B
covenants and agrees that, during the term of this Agreement, without the
prior written consent of Party A:

    

    6.1
Equity. Party B will not issue, purchase or redeem any equity or debt
securities of Party B.

    

    6.2
Liens. Party B will not create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of Party B whether existing or hereafter acquired, provided that the
provisions of this Clause 6.2 shall not prevent the creation, incurrence,
assumption or existence of:

    

    6.2.1
Liens for taxes not yet due, or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves have
been established; and

    

    6.2.2
Liens in respect to Party B’s property or assets imposed by law, which were
incurred in the ordinary course of business, and (i) which do not in the
aggregate, materially detract from the value of Party B’s property or
assets or materially impair the use thereof in the operation of Party B’s
business or (ii) which are being contested in good faith by appropriate
proceedings and proceedings which have the effect of preventing the forfeiture
or sale of the property of assets subject to any such Lien.

    

    6.3
Consolidation, Merger, Sale of Assets, etc. Party B will not wind up,
liquidate or dissolve its affairs or enter into any transaction of merger
or consolidation, or convey, sell, lease or otherwise dispose of (or agree
to do any of the foregoing at any future time) all or any part of its property
or assets, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, except that (i) Party B may sell inventory in the
ordinary course of business and (ii) Party B may sell equipment which is
uneconomic or obsolete, in the ordinary course of business.

    

    6.4
Dividends. Party B will not declare or pay any dividends, or return any
capital, to its shareholders or authorize or make any other distribution,
payment or delivery of property or cash to its shareholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock now or hereafter
outstanding (or any options or warrants issued by Party B with respect to its
capital stock), or set aside any funds for any of the foregoing
purposes.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.5
Leases. Party B will not permit the aggregate payments (including,
without limitation, any property taxes paid as additional rent or lease
payments) by Party B under agreements to rent or lease any real or personal
property to exceed US$1 million in any fiscal year of Party B.

    

    6.6
Indebtedness. Party B will not contract, create, incur, assume or suffer to
exist any indebtedness, except accrued expenses and current trade accounts
payable incurred in the ordinary course of business, and obligations under
trade letters of credit incurred by Party B in the ordinary course of business,
which are to be repaid in full not more than one (1) year after the date on
which such indebtedness is originally incurred to finance the purchase of goods
by Party B.

    

    6.7
Advances, Investment and Loans. Party B will not lend money or grant credit
or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, except that Party B may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms.

    

    6.8
Transactions with Affiliates. Party B will not enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of Party B, other than on terms and conditions
substantially as favorable to Party B as would be obtainable by Party B at the
time in a comparable arm’s-length transaction with a Person other than an
Affiliate and with the prior written consent of Party A.

    

    6.9
Capital Expenditures. Party B will not make any expenditure for fixed or
capital assets (including, without limitation, expenditures for maintenance
and repairs which are capitalized in accordance with generally accepted
accounting principles in the PRC and capitalized lease obligations) during
any quarterly period which exceeds the aggregate the amount contained in
the budget as set forth in Section 5.1.5.

    

    6.10
Modifications to Debt Arrangements, Agreements or Articles of
Association. Party B will not (i) make any voluntary or optional payment or
prepayment on or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) any existing
Indebtedness or (ii) amend or modify, or permit the amendment or modification
of, any provision of any existing Indebtedness or of any agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating to any of the foregoing or (iii)
amend, modify or change its Articles of Association or business license, or any
agreement entered into by it, with respect to its capital stock, or enter into
any new agreement with respect to its capital stock.

    

    6.11 Line of Business.
Party B will not engage (directly or indirectly) in any business other than
those types of business prescribed within the business scope of Party B’s
business license
except with the prior written consent of Party
A.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. TERM
AND TERMINATION

    

    7.1 This
Agreement shall take effect on the date of execution of this Agreement
and shall remain in full force and effect unless terminated pursuant to
Clause 7.2.

    

    7.2 This
Agreement may be terminated:

    

    7.2.1 By
either Party giving written notice to the other Party if the other
Party has committed a material breach of this Agreement (including, but not
limited to, the failure by Party B to pay the Consulting Services Fee) and such
breach, if capable of remedy, has not been so remedied within fourteen (14)
days, in the case of breach of a non-financial obligation, following the receipt
of such written notice;

    

    7.2.2 By
either Party giving written notice to the other Party if the other
Party becomes bankrupt or insolvent or is the subject of proceedings or
arrangements for liquidation or dissolution or ceases to carry on business or
becomes unable to pay its debts as they become due;

    

    7.2.3 By
either Party giving written notice to the other Party if, for any
reason, the operations of Party A are terminated;

    

    7.2.4 By
either Party giving written notice to the other Party if the
business license or any other license or approval material for the business
operations of Party B is terminated, cancelled or revoked;

    

    7.2.5 By
either Party giving written notice to the other Party if
circumstances arise which materially and adversely affect the performance
or the objectives of this Agreement; or

    

    7.2.6 By
election of Party A with or without reason.

    

    7.3 Any
Party electing to terminate this Agreement pursuant to Clause 7.2 shall
have no liability to the other Party for indemnity, compensation or damages
arising solely from the exercise of such termination right, provided that
the expiration or termination of this Agreement shall not affect the continuing
obligation of Party B to pay any Consulting Services Fees already accrued or due
and payable to Party A. Upon expiration or termination of this Agreement, all
amounts then due and unpaid to Party A by Party B hereunder, as well as all
other amounts accrued but not yet payable to Party A by Party B, shall thereby
become due and payable by Party B to Party A.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8. PARTY
A’S REMEDY UPON PARTY B’S BREACH

    

    In
addition to the remedies provided elsewhere under this Agreement, Party A shall
be entitled to remedies permitted under PRC laws, including, without
limitation, compensation for any direct and indirect losses arising from the
breach and legal fees incurred to recover losses from such breach.

    

    9.
AGENCY

    The
Parties are independent contractors, and nothing in this Agreement shall be
construed to constitute either Party to be the agent, partner, legal
representative, attorney or employee of the other for any purpose whatsoever.
Neither Party shall have the power or authority to bind the other except as
specifically set out in this Agreement.

    

    10.
GOVERNING LAW AND JURISDICTION

    10.1
Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the PRC.

    

    10.2
Arbitration. Any dispute arising from, out of or in connection with
this Agreement shall be settled through amicable negotiations between the
Parties. Such negotiations shall begin immediately after one Party has
delivered to the other Party a written request for such negotiation. If,
within ninety (90) days following the date of such notice, the dispute
cannot be settled through negotiations, the dispute shall, upon the request of
either Party with notice to the other Party, be submitted to arbitration in
China under the auspices of China International Economic and Trade Arbitration
Commission (the “CIETAC”). The Parties shall jointly appoint a qualified
interpreter for the arbitration proceeding and shall be responsible for sharing
in equal portions the expenses incurred by such appointment. The arbitration
proceeding shall take place in Shanghai, China. The outcome of the arbitration
shall be final and binding and enforceable upon the Parties.

    

    10.2.1
Number and Selection of Arbitrators. There shall be three (3)
arbitrators. Party B shall select one (1) arbitrator and Party A shall
select one (1) arbitrator, and both arbitrators shall be selected within
thirty (30) days after giving or receiving the demand for arbitration. Such
arbitrators shall be freely selected, and the Parties shall not be limited in
their selection to any prescribed list. The chairman of the CIETAC shall select
the third arbitrator. If a Party does not appoint an arbitrator who consents to
participate within thirty (30) days after giving or receiving the demand for
arbitration, the relevant appointment shall be made by the chairman of the
CIETAC.

    

    10.2.2
Arbitration Language and Rules. Unless otherwise provided by
the arbitration rules of CIETAC, the arbitration proceeding shall be
conducted in Chinese. The arbitration tribunal shall apply the arbitration
rules of the CIETAC in effect on the date of execution of this Agreement.
However, if such rules are in conflict with the provisions of this clause,
or with Section 10 of this Agreement, then the terms of Section 10 of this
Agreement shall prevail.

    

    10.2.3
Cooperation; Disclosure. Each Party shall cooperate with the other Party
in making full disclosure of and providing complete access to all
information and documents requested by the other Party in connection with
such proceedings, subject only to any confidentiality obligations binding
on such Parties.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10.2.4
Jurisdiction. Judgment rendered by the arbitration may be entered into
by any court having jurisdiction, or application may be made to such court
for a judicial recognition of the judgment or any order of enforcement
thereof.

    

    10.3
Continuing Obligations. The Parties shall continue their implementation of
this Agreement during the period when the relevant dispute is being
resolved.

    

    11.
ASSIGNMENT

    

    No part
of this Agreement shall be assigned or transferred by either Party without
the prior written consent of the other Party. Any such assignment or
transfer shall be void, provided that Party A may assign its rights and
obligations under this Agreement to an Affiliate without Party B’s
consent.

    

    12.
NOTICES

    Notices
or other communications required to be given by any Party pursuant to
this Agreement shall be written in English and Chinese and delivered
personally or sent by registered mail or prepaid mail or by a recognized courier
service or by facsimile transmission to the address of the other Party set forth
below or to such other address of the Party as specified by such Party from time
to time. The date when the notice is deemed to be duly served shall be
determined as the follows: (a) a notice delivered personally is deemed duly
served upon the delivery; (b) a notice sent by mail is deemed duly served the
tenth (10th) day after the
date, or the fourth (4th)
day after the delivery date of an internationally recognized courier service;
and (c) a notice sent by facsimile transmission is deemed duly served upon the
time shown on the transmission confirmation of relevant documents.

    

    Party
A

    

    Hebei
Anbang Investment Consultation Co., Ltd.

    Address:
Inside of Baosheng Steel Product Company, No. 3 Muslim

    Shangmao
Street (Xiaodingfu Part in the south of Jingha Road),

    Xiadian
Town, Hui Autonomous County, China

    Attn: LI,
Hongzhong

    Fax:

    Tel:

    

    Party
B:

    

    Dachang
Hui Autonomous County Baosheng Steel Products Co., Ltd.

    Address:
Xiadian Town Industrial Zone, Dachang County, China.

    Attn: LI,
Hongzhong

    Fax:

    Tel:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    13.
GENERAL

    

    13.1 The
failure or delay in exercising a right or remedy under this Agreement
shall not be constituted as a waiver of the right or remedy, and no single
or partial exercise of any right or remedy under this Agreement shall
prevent any further exercise of the right or remedy.

    

    13.2
Should any clause or any part of any clause contained in this Agreement
be declared invalid or unenforceable for any reason whatsoever, all other
clauses or parts of clauses contained in this Agreement shall remain in full
force and effect.

    

    13.3 This
Agreement constitutes the entire agreement between the Parties relating
to the subject matter of this Agreement and supersedes all previous
agreements.

    

    13.4 No
amendment or variation of this Agreement shall be valid unless it is in
writing and executed by the Parties or their authorized
representatives.

    

    13.5 This
Agreement shall be executed in two (2) duplicate originals in English.
Each Party shall receive one (1) duplicate original, and all originals
shall be equally valid.

    

    [SIGNATURE
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