(English Translation) CONSULTING AGREEMENT

This Consulting Agreement (this "Agreement") is entered into as of March 8, 2007 by and between the International Lorain Holding Inc. a holding company organized under the laws of the Cayman Islands, (”Lorain"), and Heritage Management Consultants, Inc., a corporation organized under the laws of South Carolina, USA (“Heritage” or "the "Consultant").

 

1. Consultant is willing to provide to Lorain and its affiliated companies (collectively, the “Company”) the consulting services identified in this Agreement.

2. Lorain is willing to engage Consultant as an independent contractor, and not as an employee, on the terms and conditions set forth herein.

In consideration of the foregoing and of the mutual promises set forth herein, and intending to be legally bound, the parties hereto agree as follows:

1. Engagement. Lorain hereby engages Consultant as an independent contractor to provide outsourced professional management services for the purpose of assisting the Company in its reverse merger transaction and in meeting its obligations as a US publicly traded company. Heritage will provide an executive who will act as the Company’s U.S. based executive (the “Spokesperson”) to the U.S. financial markets, and who will be supported by the Heritage staff. The scope of work includes the following:

·	The Spokesperson will be supported by a staff financial analyst.

·	Heritage representative(s) will visit the Company’s location(s) to conduct a detailed analysis of the Company in order to gain an understanding of the Company’s operations, strategies and financial projections.

·	Heritage will develop an investor presentation for use in any transactions.

·	Heritage will review and suggest edits to any written business plans in the English language that will be used for any transaction.

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Heritage will provide consultation to the Company during all fund raising activities during the term of the engagement. The Spokesperson will make “one on one,” web cast and teleconference presentations to investment banks and potential investors on behalf of the Company with the Company’s executive management in attendance. Heritage staff will coordinate communications between investment banks, investors and the Company.

 

 

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Heritage staff will assist the company in the construction of both historical and projected financial models appropriate for use with the investment community. Heritage staff will conduct a detailed review of the financial projections for any potential issues prior to their release to the investment community.

·	On an ongoing basis, Spokesperson will be available to make “one on one” presentations, web cast presentation and teleconference updates to current investors, potential investors, and the analyst community as appropriate

·	Spokesperson will participate in investor conferences, as appropriate.

·	Spokesperson will conduct quarterly investor conference calls, as appropriate.

·	Spokesperson and the Heritage staff will be readily available to receive inquiries and coordinate responses to potential and current investors, buy and sell side analysts, the financial press, and the Securities and Exchange Commission.

·	Heritage will work with the Company on proactively analyzing, identifying potential issues or areas of concern and constructing responses to potential questions which may result from the Company’s quarterly financial results.

·	Heritage can assist the Company in interviewing; selecting and retaining an investor relations firm.

·	Heritage will solicit independent research coverage with the sell side analyst community.

·	Heritage will review all press releases on financial results and material company events.

·	Heritage will assist the company in the recruitment of independent directors as required to facilitate the company’s listing on NASDAQ or the American Stock Exchange.

·	Heritage will assist the company in putting into place the necessary internal management resources that will enable the company to operate effectively in the capital markets on an ongoing basis.

·	Heritage will assist the company in the arrangement of Directors and Officers Liability Insurance coverage.

2. Term. This Agreement will commence on the date first written above, and unless modified by the mutual written agreement of the parties, shall continue for a period of one year.

3. Compensation.

 

a. In consideration of the services to be performed by Consultant, Lorain agrees to pay Consultant one hundred seventy five thousand U.S. dollars ($175,000.) Payment of one hundred fifteen thousand U.S. dollars ($115,000) will be made immediately upon the successful completion of a transaction (a “RTO”) whereby Lorain becomes a wholly owned subsidiary of a corporation domiciled in the United States of America., The remaining sixty thousand U.S. dollars ($60,000) will be paid in three equal installments of twenty thousand dollars ($20,000) at the beginning of each calendar quarter commencing ninety (90) days after the execution of this agreement.

 

b. All out of pocket expenses incurred by Consultant and/or its associates shall be reimbursed by the Company. If the RTO is not consummated, Lorain agrees to reimburse Heritage for all out of pocket expenses incurred up to the date it is determined the RTO will not be effected. Travel expenses will be incurred at a Business Class level of service. Besides travel in the US, it is expected that the Spokesperson will visit company’s China locations(s) two (2) times during the term of the agreement. Maximum travel expenses will be $25,000 unless specifically authorized by Lorain.

4. Representations and Warranties. Consultant represents and warrants (i) that Consultant has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with Consultant's undertaking this relationship with the Company, (ii) that Consultant will not use in the performance of its responsibilities under this Agreement any confidential information or trade secrets of any other person or entity and (iii) that Consultant has not entered into or will enter into any agreement (whether oral or written) in conflict with this Agreement.

 

5. Indemnification. Company agrees to indemnify and save harmless the Consultant, as well as Consultant’s officers, employees, and agents from all suits, actions, losses, damages, claims, or liability of any character, type or description, including without limiting the generality of the foregoing all expenses of litigation, court costs, and attorney’s fees arising out of or occasioned by the acts of Lorain, its agents or employees, or occasioned by the acts of Consultant in the execution or performance of the services provided by the Consultant, at any time from the execution date of this Agreement until such time after any pertinent limitations period expires after the termination of this Agreement.

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As part of this indemnification, Lorain agrees to defend and hold harmless Consultant from and against any and all liabilities arising from the consulting agreement. As such, Consultant shall not be liable to Lorain , or to anyone who may claim any right due to its relationship with Lorain , for any acts or omissions on the part of the Consultant or the agents or employees of the Consultant in the performance of Consultant’s services under this agreement. Lorain shall hold Consultant free and harmless from any obligations, costs, claims, judgments, attorney’s fees, or attachments arising from or growing out of the services rendered to the Company.

Lorain agrees to list Mr. James H. Groh, Spokesperson and Mr. Gerard Pascale on any Directors and Officers Liability Insurance policies that the Company may retain for a period of 6 years from the date of this Agreement.

 

6. Governing Law. This Agreement shall be governed by the laws of the Peoples Republic of China and any dispute arising hereunder shall be submitted for binding arbitration to the China Foreign Trade Commission Arbitration Committee in Shanghai.

 

It is understood that this Agreement will be prepared and executed in both the English and Chinese languages, with both versions having legal efficacy. If a dispute arises as to the interpretation of a particular provision of this Agreement because of differences between the Chinese and English languages, the dispute shall be resolved in accordance with the provisions of the preceding paragraph.

7. Miscellaneous. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs. This Agreement shall be binding on and inure to the benefit of the parties to it and their respective successors and assigns.

Executed at Hilton Head Island, SC, USA on the day and year first above written.

 

International Lorain Holding Inc. (Corporate Seal)			Heritage Management Consultants, Inc (Corporate Seal)
By : /s/ Hisashi Akazawa			By: /s/ James H. Groh
Hisashi Akazawa			James H. Groh, President
Date : March 8, 2007			March 8, 2007