JIHUI CAPITAL SERVICES, INC.
00 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000.000.0000 - tel
000.000.0000 - fax
October 15, 2001
Lexicon United Incorporated
00 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Retainer Letter
Dear Xx. Xxxxx:
This engagement letter (this "Agreement") sets forth the terms and
conditions pertaining to the provision of Services (as defined below) by Jihui
Capital Services, Inc. ("us," "we," or "our") to Lexicon United Incorporated
("you" or "your"). Please indicate your acceptance of these terms and conditions
by signing in the space designated below and returning this Agreement to my
attention at the above fax number.
1. Services. We agree to provide the following services to you
(the "Services"):
o We will assist you in the development and
implementation of your business plan.
o We will identify and help you to develop
relationships with strategic partners and help you to
identify acquisition targets and effect acquisitions.
o We will assist you in the negotiation of material
agreements and other arrangements with clients,
suppliers and others.
o We help you to communicate effectively with your
stockholders and assist you in the preparation and
dissemination of press releases and other stockholder
and market communications.
o We will assist you in obtaining and maintaining
effective relationships with market makers, transfer
agents, financial analysts and others.
o We will work with your legal counsel and accounting
firm and assist in the preparation of all of the
requisite or desirable filings under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
and the Securities Act of 1933, as amended (the
"Securities Act").
o We will organize your financial records, prepare your
unaudited financial statements and assist your
accountants to prepare your audited financial
statements.
o We will perform such other services as you may from
time to time request of us.
2. Fees and Expenses; Retainer.
(a) Fees and Expenses. In consideration of the Services, you
shall pay us $200.00 per hour. In addition, you shall reimburse us for all
costs and expenses (including travel expenses) that we reasonably incur
in the performance of the Services, including, without limitation, the fees and
disbursements of any legal, accounting or other firms that we retain on your
behalf and with your consent and you shall pay or reimburse us for all taxes
applicable to the fees paid or owed by you hereunder, excluding taxes based
solely on our income. We shall invoice you for expenses on a monthly or more
frequent basis. You shall pay in full all fees, costs, expenses, and taxes owed
by you to us on or before the tenth (10th) day following the date of the
applicable invoice. Upon request, we will provide you with a copy of expense
receipts. Late payments shall bear interest at 1.5% per month or the highest
rate permitted by applicable law, whichever is lower. We shall be entitled to
all costs of collection, including reasonable attorneys' fees and court costs.
We reserve the right to stop performing Services under this Agreement if you
fail to timely make any payments or reimbursements due to us hereunder.
(b) Retainer. Upon signing this Agreement, you shall
pay us a $10,000 retainer. We will apply this retainer to fees and expenses owed
by you to us under Section 2(a) above as those fees and expenses are incurred.
You shall replenish the retainer promptly upon notice from us that we have
applied all or a portion of it to outstanding fees and invoices. We reserve the
right to stop performing Services under this Agreement if you fail to promptly
replenish the retainer as specified in this Section 2(b).
3. Confidentiality. Both parties acknowledge that, during the
term of this Agreement, each party will provide the other with confidential
and/or proprietary information, including but not limited to data, information,
ideas, materials, sales, cost and other unpublished financial information,
product and business plans, or other relevant information that is marked
"confidential" (or similarly) or, if not so marked, is clearly intended to be
confidential (collectively, "Confidential Information").
Each party shall protect all such Confidential Information of the other
with at least the same degree of care it uses to protect its own confidential
information, but not less than a reasonable degree of care. Neither party shall
use, disclose, provide, or permit any person to obtain any such Confidential
Information in any form, except for employees, agents, or independent
contractors whose access is required to carry out the purposes of this Agreement
and who have agreed to be subject to the same restrictions as set forth herein.
The confidentiality obligations of this section shall not
apply to any information received by a party that (i) is generally available to
or previously known to the public, (ii) can be reasonably demonstrated was known
to such party prior to the negotiations leading to this Agreement, (iii) is
independently developed by such party outside the scope of this Agreement
without use of or reference to the other party's Confidential Information, or
(iv) is lawfully disclosed pursuant to a court order, provided that the party
subject to such order shall promptly notify the party whose Confidential
Information is to be disclosed, so such party may seek a protective or similar
order.
4. Indemnification; Limitation of Liability and Disclaimer.
(a) Indemnification. Since we will be acting on your
behalf, you shall indemnify and hold us and each of our principals, partners,
officers, employees and agents (each of such persons being herein called an
"Indemnified Party"), harmless against any and all losses, claims, damages or
liabilities, joint or several, to which any such Indemnified Party may become
subject under any statute or the common law or otherwise, any amount paid in
settlement of any claim, action or proceeding commenced or threatened, and any
and all expenses incurred in connection with investigating or defending any such
claim, action, or proceeding as and when incurred, insofar as such losses,
claims, damages, liabilities, actions, proceedings or expenses arise out of or
are based upon any of the matters which are the subject of this Agreement,
except that no Indemnified Party shall be so indemnified to the extent that any
such losses, claims, damages, liabilities, actions, proceedings or expenses
arise out of such Indemnified Party's recklessness or gross negligence in
connection with the performance of such Indemnified Party's services hereunder.
If the foregoing indemnification is held to be unavailable or insufficient, you
shall contribute to all losses, claims, damages, liabilities or expenses to
which any Indemnified Party may become subject, in the maximum proportion
permitted under applicable law.
We shall notify you promptly of any action, proceeding or investigation
for which an Indemnified Party shall seek indemnification hereunder; however,
failure to notify you shall not relieve you of your obligations hereunder,
unless, and only to the extent, such failure is prejudicial to the rights of and
defenses available to you or to us. You may elect in writing to assume the
defense of any action, proceeding or investigation as to which an Indemnified
Party has demanded indemnification hereunder and, upon such election, you shall
not be liable for any legal costs incurred by the Indemnified Party (other than
reasonable costs previously incurred) in connection therewith, unless (i) you
have failed to provide counsel reasonably satisfactory to the Indemnified Party
in a timely manner, or (ii) counsel for an Indemnified Party reasonably
determines that representation of both you and any Indemnified Party by counsel
for you would be inappropriate due to an actual or potential conflict of
interest. Neither you nor any Indemnified Party shall enter into any settlement
agreement without the prior written consent of any other party affected by such
settlement agreement or who shall be liable for indemnification for amounts paid
thereunder.
(b) Limitation of Liability. Regardless of the basis of
recovery claimed, whether under any contract, negligence, strict liability, or
any other theory, our aggregate liability hereunder to you will be limited to
direct damages or loss up to the amount of the fees actually paid by you to us
hereunder for the Services with respect to which any claim arises. We shall not
be liable under any circumstances for any special, indirect, incidental or
consequential damages, including without limitation loss of profits, even if we
have been advised of the possibility of such damages.
(c) Disclaimer. You acknowledge, understand and agree
that although we have attorneys and accountants on our staff we are not a law
firm or accounting firm and we are not qualified to provide legal, accounting or
auditing services to you. Any work that we perform of a legal, auditing or
accounting nature will require review by outside law and accounting firms. If
you do not have outside counsel or outside auditors we can recommend appropriate
firms to you.
5. Termination. This Agreement is effective for a six (6) month
period and shall be automatically renewed for successive six (6) month periods,
provided that either party may terminate this Agreement for any reason by giving
not less than thirty (30) days' written notice to the other party. Termination
of this Agreement shall in no way affect your obligation to pay us accrued fees
or to reimburse us for any expenses incurred on your behalf through the date of
termination nor shall your termination of this Agreement entitle you to a refund
of any fees advanced to us. One party's obligations to perform under this
Agreement shall terminate automatically upon the dissolution, termination of
existence, insolvency, business failure, appointment of a receiver of any part
of the other's property, assignment or trust mortgage for the benefit of
creditors by the other, the commencement of any proceeding under any bankruptcy,
receivership or insolvency laws by or against the other.
6. Miscellaneous. Each party shall be and act as an independent
contractor and not as partner, joint venturer, or agent of the other, and shall
not bind nor attempt to bind the other to any contract. All notices under this
Agreement shall be in writing, and shall be deemed given when personally
delivered, three days after being sent by prepaid certified or registered U.S.
mail, or one day after being sent by overnight express courier to the address of
the party to be noticed, as set forth in any writing or document provided by the
party to be noticed to the other. This Agreement constitutes the entire
agreement between the parties regarding the subject matter hereof and supersedes
all prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they related in any way to the subject
matter hereof. No changes, modifications, or waivers to this Agreement will be
effective unless in writing and signed by both parties. In the event that any
provision hereof is determined to be illegal or unenforceable, that provision
will be limited or eliminated to the minimum extent necessary so that these
terms and conditions shall otherwise remain in full force and effect and
enforceable. These terms and conditions shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws provisions of such state. Neither party may assign its rights
or delegate its duties under this Agreement without the express prior written
consent of the other party, which consent shall not be unreasonably withheld.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original and all of which, together, shall constitute one and the
same instrument. Facsimile execution and delivery of this Agreement is legal,
valid and binding execution and delivery for all purposes.
[signature page follows]
We are delighted to accept this engagement and look forward to working
with you on this assignment.
Sincerely,
Jihui Capital Services, Inc.
By:____________________________
Name:__________________________
Title:_________________________
Acknowledged and agreed to as of the date first above written:
Lexicon United Incorporated
By:__________________________
Name: Xxxxxxx X. Xxxxx
Title: President
