Consulting Agreement - Cheung Laboratories Inc. and New Opportunities Ltd.
NEW OPPORTUNITIES, LTD.
[LETTERHEAD]
August 15, 1996
Cheung Laboratories, Inc.
10220-1 Old Columbia Road
Columbia, MD 21046-1705
Attention: Board of Directors
Dr. Augustine Cheung had requested (he asked nicely) if I would provide him
assistance in restructuring Cheung Laboratories, Inc. In a meeting on July 8, 9,
and 10, 1996 it became very clear from the "Financial Advisor, Mr. Warren
Stearns, that the "assistance" Warren had in mind was that of a full time CEO
and President. Further, that the individual selected must be "an experienced
businessman, competent to attend to the coordination of all contemplated
activities particularly attendant to the preparation of the Company to financial
institutions and investment bankers." After interviewing with Mr. Stearns, I
believe I have his full recommendation and support.
The past two weeks, starting on July 27, I have had the opportunity to work with
Dr. Cheung and all other employees, review extensive correspondence files, and
meet with recommended special attorneys, a marketing consultant, our financial
advisor, and the leader of our technical advisory board. My conclusion, with no
reservations, is: we now have the greatest opportunity for success that this
Company has ever had.
With that said, and if the Board of Directors approves, I would accept the full
responsibility of CEO and President of Cheung Laboratories, Inc. The "By Laws"
of CLI requires that the President be a member of the Board of Directors.
Therefore, I would accept that responsibility also.
I propose that the agreement and compensation be through my consulting company,
New Opportunities, Ltd (NOL). I would agree to suspend most of my current
activities with NOL and Trans Pacific Alliance of America (TPA). I do have a
consulting commitment to Maytag at a fee of U.S. $300 per hour that I must
honor. This should require only about one week of my time. In addition, I have a
"religious holiday" the first week of October and the first week of November
that I also must honor.
I propose the following agreement:
5. That the agreement be a consulting contract between CLI and NOL for
the specific services of Blaha.
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As an inducement for me to suspend my third retirement, reduce my
participation in the activities of NOL and TPA, and to reduce my consulting fee
from U.S. $300 per hour, I propose the following compensation schedule:
6. Payment of an initial fee of U.S. $25,000 upon the Board of
Directors approval of Blaha as the CEO and President. This fee to cover costs
and expenses of reducing activity in NOL and TPA.
7. Payment of a consulting fee of U.S. $175 per hour. Maximum
charge of 8 hours per day and 40 hours per week regardless of the length of the
day or week.
8. Reimbursement of all normal business expenses while conducting
CLI business. The Company shall provide a suitable residence including all
utilities in Columbia, Maryland at no charge.
9. Grant a fully vested, transferable and divisible Warrant to
purchase 400,000 shares of CLI common stock at a strike price of U.S. $0.41 at
any time after August 14, 1996 and eight years thereafter.
10. CLI shall fully indemnify NOL and Blaha against any liability
whatsoever (including legal fees and expenses) arising from claims in connection
with conducting CLI business.
11. The term of this agreement shall be for six months starting
and effective as of July 27, 1996 and ending on January 27, 1997.
12. This agreement is written in casual business language and if the
Board of Directors so desires it may be translated into a formal legal language
by CLI council.
By:/s/_____________________ By:/s/____________________ President
Director
New Opportunities, Ltd.
____________________
Director
____________________
Director
____________________
Director
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