Exhibit 10.2
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement (this “
Agreement ”) is dated June 23, 2008, and is entered
into in Xi’an, China between Xi’an Jiahui Real Estate
Co., Ltd (“Jiahui”), with a registered address at 89
Chang’an Middle Rd., Yangming Int’l Tower 27
th Floor, Xi’an, Shaanxi, China (“Party
A”), and Shaanxi Xinyuan Real Estate Co. Ltd., with a
registered address at 89 Chang’an Middle Rd., Yangming
Int’l Tower 26 th Floor, Xi’an, Shaanxi,
China (“Party B”),. Party A and Party B are referred to
collectively in this Agreement as the “Parties.”
RECITALS
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(1)
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Party A, a wholly foreign owned limited company incorporated
under law of China, has the expertise in the business of real
estate development, including sale and lease of real estate;
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(2)
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Party B, a limited company incorporated in China, is engaged in
the development, sale and lease of, including but not limited to,
the Yan Ta Shopping Mall (the “Business”);
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(3)
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The Parties desire that Party A provide real estate development
consulting services and relevant services to Party B;
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(4)
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The Parties are entering into this Agreement to set forth the
terms and conditions under which Party A shall provide consulting
services to Party B.
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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 ownership of
securities or partnership or other ownership interests, by contract
or otherwise);
“ Consulting Services Fee ” shall be as defined
in Clause 3.1;
“ Indebtedness ” shall mean, as to any Person,
without duplication, (i) all indebtedness (including principal,
interest, fees and charges) of such Person for borrowed money for
the deferred purchase price of property or services, (ii) the face
amount of all letters of credit issued for the amount of 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 leases under which such Person is the lessee and (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; In this Agreement a reference to a Clause,
unless the context otherwise requires, is a reference to a clause
of this Agreement.
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 upon the terms and
conditions of this Agreement. The services subject to this
Agreement shall include, without limitation:
(a)
General Business Operation . Advice and assistance relating
to the development, sale and lease of the Yan Ta Shopping
Mall and provision of consultancy services, particularly as
related to the real estate development.
(b)
Human Resources .
(i)
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)
Training of management, staff and administrative personnel;
(iii)
Assistance in the development of sound payroll administrative
controls in Party B;
(iv)
Advice and assistance in the relocation, if necessary, of
management and staff of Party B;
(c)
Business Development
(i)
Advice and assistance in relation to Party B’s business
development;
(ii)
Advice and assistance in business growth and development; and
(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 unless the prior written approval is obtained
from Party A.
2.3 Intellectual Properties 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
properties. If Party B must utilize any intellectual property,
Party A agrees to grant an appropriate license to Party B on terms
and conditions to be set forth in a separate agreement.
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2.4 Pledge . Party B shall permit and
cause Party B’s shareholders to pledge the equity interests
of Party B to Party A for securing the Fee that should be paid by
Party B pursuant to this Agreement.
3. PAYMENT
3.1 General .
(a) In
consideration of the Services provided by Party A hereunder, Party
B shall pay to Party A during the term of this Agreement a
consulting services fee (the “Consulting Services
Fee”), payable in RMB each quarter, equal to all of its net
after tax income for such quarter based on the quarterly financial
statements provided under Clause 5.1 below. Such quarterly payment
shall be made within 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, or its agents or representatives
(including independent public accountants, which may be Party
B’s independent public accountants), (i) to conduct periodic
audits of books and records of Party B, (ii) to examine and make
copies
of 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 provided in the preceding
sentence at any time, provided that Party A provides ten days
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 written consent.
3.3 The Consulting Services Fee shall be paid in
RMB by telegraphic transfer to Party A’s bank account, 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 Service’s 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 announced 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 of and without deduction for or on
account of tax, unless Party B is required to make such payment
subject to the deduction or withholding of tax.
4. FURTHER TERMS OF COOPERATION
4.1 All business revenue of Party B shall be
directed in full by Party B into a bank account nominated 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 will
furnish to Party A:
5.1.1
Preliminary Monthly Reports . Within five (5) days of the
end of each calendar month the preliminary income statements and
balance sheets of Party B made up to and as at the end of such
calendar month, in each case prepared in accordance with the PRC
generally accepted accounting principles, consistently applied.
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 position and results of operations and affairs of Party B
made up to and as at the end of such calendar month and for the
elapsed portion of the relevant financial year, setting forth in
each case in comparative form figures for the corresponding period
in the preceding financial year, in each case prepared in
accordance with the PRC generally accepted accounting principles,
consistently applied.
5.1.3
Quarterly Reports . As soon as available and in any event
within forty-five (45) days after each Quarterly Date (as defined
below), unaudited consolidated and consolidating statements of
income, retained earnings and changes in financial position of the
Party B and its subsidiaries, if any, 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 at the end of such quarterly period, setting
forth in each case actual versus budgeted comparisons and in
comparative form the corresponding consolidated and consolidating
figures for the corresponding period in the preceding fiscal year,
accompanied by a certificate of the chief financial officer of the
Party B, which certificate shall state that said financial
statements fairly present the consolidated and consolidating
financial condition and results of operations, as the case may be,
of the Party B and its subsidiaries, if any, in accordance with PRC
general accepted accounting principles applied on a consistent
basis as at the end of, and for, such period (subject to normal
year-end audit adjustments and the preparation of notes for the
audited financial statements); for purposes of this Agreement,
“a Quarterly Date” shall mean the last day of March,
June, September and December in each year, the first of which shall
be the first such day following the date of this Agreement;
provided that if any such day is not a business day in the PRC,
then such Quarterly Date shall be the next succeeding business day
in the PRC.
5.1.4
Annual Audited Accounts . Within three (3) months after the
end of the financial year, the annual audited accounts of Party B
to which they relate (setting forth in each case in comparative
form the corresponding figures
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