[LOGO]
Since 1842
XXXXX BROTHERS
The Farm House
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxx 00000
May 22, 2006
Xx. Xxx Yuchuan
Chairman
Beijing Zhong Ran Wei Ye Gas Co., Ltd.
Xx. 00 Xxxxxxxxxxxxxxxx Xx.
Xxxxxx Xxxxxxxx, Xxxxxxx 000000
People's Republic of China
ENGAGEMENT AGREEMENT PROVIDING FOR INVESTMENT BANKING SERVICES
Dear Xx. Xxx,
This letter agreement (the "Agreement") is written to set forth the
understanding and agreement between Xxxxx Brothers, Inc. and its related
subsidiaries (altogether, "Xxxxx Brothers") and Beijing Zhong Ran Wei Ye Gas
Co., Ltd. with its principal place of business in Beijing in the People's
Republic of China (the "Company") and shall supersede all previous discussions,
proposals and engagement agreement between Xxxxx Brothers and the Company,
including inter alia, the engagement agreement and the proposal letter both
dated February 13, 2006 entered into between Xxxxx Brothers, Inc. and the
Company (the "Previous Engagement Letter and Proposal").
The Company and Xxxxx Brothers hereby agree to terminate the Previous
Engagement Letter and Proposal without recourse between the parties and the
parties' obligations thereunder shall be fully and finally released from the
date hereof.
The Company hereby engages Xxxxx Brothers on an exclusive basis, from the
date hereof until August 13, 2006 (Beijing time), to provide it with investment
banking services described in paragraph I hereinafter and Xxxxx Brothers hereby
accepts such engagement. In the event that as a result of this engagement of
Xxxxx Brothers a term sheet (the "Term Sheet") representing a commitment between
a lead investor and the Company with respect to the Financing (as defined below)
is obtained before August 1, 2006 (Beijing time), this Agreement will remain in
force for a period of two years following the closing of such related Financing.
Xxxxx Brothers acknowledges that the Company's representation as to its profits
for 2006 or its profits for 2007 will be adjusted to the closing of the
Financing, and are currently expected to be as set forth in Schedule C.
I. INVESTMENT BANKING SERVICES
1. Financial Advisory Services
Xxxxx Brothers, through its subsidiary Xxxxx Bros. & Co., Inc. (the
"Financial Advisor") and its subsidiary Xxxxx Brothers Securities Corporation
(the "Placement Agent"), will assist the Company with its current investment
banking requirements, including an equity financing of $12,800,000 for the
Company (the "Financing") by way of issuance of common stock and warrants (or
things of equivalent value invested in it or its controlled subsidiaries or
affiliates) to institutional and high-net-worth individual financial investors
("Financial Investors") or, at the option of the Company, strategic investors
("Strategic Investors"), in accordance with the terms and conditions contained
in this Agreement and the principal terms set out in Schedule B to this
Agreement and the acquisition by the Company of a public shell listed on an
exchange in the United States of America (the "Public Shell") in a reverse
takeover merger (altogether with the Financing, the "Transaction), such
assistance to be provided over the period of this Agreement.
With respect to the Financing, the interest in the Company to be held by
the Financial Investors or Strategic Investors (where applicable) shall
represent 27% of the total shares of common stock (the "Common Stock") in the
Company after the Financing. The proceeds receivable by the Company from the
Financing shall not be less than $10,000,000. For such investment, the Financial
Investors or Strategic Investors (where applicable) shall also receive a warrant
(the "Warrant") to subscribe for US$6,300,000 of incremental Common Stock in the
Company at 140% of the subscription price of the shares offered in the Financing
exercisable within five years of the Financing.
Xxxxx Brothers assistance with respect to the Financing and the
Transaction shall be provided in the best interest of the Company on a best
efforts basis and shall always be subject to detailed terms and conditions to be
agreed by the Company with the parties involved in the Financing and Transaction
(including the choice of legal counsel, auditors and senior management of the
Company). In any event, Xxxxx Brothers shall only provide assistance and
consultancy services to the Company but have no right to make any decision in
connection therewith.
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With respect to Financial Investors, Xxxxx Brothers, through the Financial
Advisor and the Placement Advisor, will provide the following financial advisory
and placement agency services:
(i) provide advice regarding the financial structure of the Company
or its subsidiaries or any projects or programs undertaken by any of
the foregoing; (ii) assist in structuring the Financing with respect
to what is usual and standard practice on terms and conditions
equivalent for organizations in similar financings; (iii) assist in
preparing and documenting the offering memorandum and related
materials relating to the Financing; (iv) when the structuring of
the Financing has reached an appropriate stage, assist in the
process to obtain and execute such Financing; and (v) assist in
obtaining and executing such Financing on terms and conditions
consistent with current market conditions and most favorable to the
Company in light of the nature of and risks inherent in the Company.
With respect to Strategic Investors, Xxxxx Brothers, through the Financial
Advisor and the Placement Advisor, will provide the following financial advisory
and placement agency services:
(i) assist in the evaluation of a Strategic Investor from a
financial point of view; (ii) provide advice and assistance with
respect to the form and structure of any transaction involving a
Strategic Investor; and (iii) when the structuring of the strategic
relationship has reached an appropriate stage, act as the Company's
agent to assist the Company in locating and obtaining, on terms and
conditions most favorable to the Company, such Strategic Investor(s)
in the form of Company clients, customers or vendors, and assist the
parties to enter into sales, vendor, licensing or related strategic
agreements. (Such agreements with Strategic Investors, whether they
result in a financial investment and or license arrangement, sales
or vendor agreement or otherwise, shall also be considered Financing
for purposes of this Agreement.)
With respect to the purchase of the Public Shell, Xxxxx Brothers will
provide the following financial advisory and placement agency services:
(i) provide advice regarding, and source and obtain, alternative
Public Shells to be purchased by the Company; (ii) assist in
structuring the purchase of the Public Shell and the merger
agreement between it and the Company with respect to what is usual
and standard practice on terms and conditions equivalent for
organizations in similar transactions; (iii) assist in preparing and
documenting the offering memorandum and related materials as they
relate to the purchase of the Public Shell; (iv) when the
structuring of the purchase of the Public Shell and its merger with
the Company has reached an appropriate stage, assist in the process
to purchase such Public Shell on behalf of the Company and to merge
the Public Shell with the Company; and (v) assist in obtaining and
executing such purchase and merger on terms and conditions
consistent with current market conditions and most favorable to the
Company in light of the nature of and risks inherent in the Company.
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Xxxxx Brothers shall not be required to undertake duties not reasonably
within the scope of the financial advisory services in which it is generally
engaged. In performance of its duties, Xxxxx Brothers, through the Financial
Advisor and the Placement Agent, shall provide the Company with the benefits of
its best judgment and efforts, but it is understood and acknowledged by the
parties that the value of Xxxxx Brothers' advice may not be measurable in a
quantitative manner.
The Company acknowledges that Xxxxx Brothers and its affiliates are in the
business of providing financial advisory services of all types contemplated by
this Agreement to others. Nothing herein contained shall be construed to limit
or restrict Xxxxx Brothers or its affiliates in conducting such business with
respect to others or rendering such advice to others, provided that the
provision of such services will not cause any conflict of interest to Xxxxx
Brothers and its affiliates nor any prejudice to the interests of the Company.
The Company recognizes and confirms that Xxxxx Brothers, in acting
pursuant to this Agreement, will be using information in reports and other
information provided by third parties, including information provided by or on
behalf of the Company. Xxxxx Brothers does not assume responsibility for and may
rely on, without independent verification, the accuracy and completeness of any
such reports and information. The Company hereby warrants that any information
relating to the Company that is furnished to Xxxxx Brothers by or on behalf of
the Company will be accurate and will not contain any material misstatements of
fact or omissions. The Company agrees that any information or advice rendered by
Xxxxx Brothers or its representatives in connection with this Agreement is for
confidential use of the Company's Board of Directors, management and employees,
as well as attorneys, accountants and other agents of the Company on a
need-to-know basis and, except as otherwise required by law, the Company will
not, and will not permit any third party to, disclose or otherwise refer to such
advice or information in any manner without Xxxxx Brothers' prior written
consent.
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2. Merger and Acquisition Services
Relating to its assistance with respect to the Financing, Xxxxx Brothers
shall provide the Company with services related to merger and acquisition
transactions in the event that at any time during which this Agreement is in
place, the Company or any of its affiliates shall enter into any "merger and
acquisition transaction" as described below with any party introduced to the
Company by Xxxxx Brothers, directly or indirectly.
Xxxxx Brothers' assistance with respect to merger and acquisition
transactions shall be provided in the best interest of the Company on a best
efforts basis, and any of such merger and acquisition transactions shall always
be subject to detailed terms and conditions to be agreed by the Company with the
parties involved in the merger and acquisition transactions (including the
choice of legal counsel, auditors and senior management of the Company). In any
event, Xxxxx Brothers shall only provide assistance and consultancy services but
have no right to make any decision in connection therewith.
For purposes of this Agreement, the term "merger and acquisition
transaction" means: (i) any merger, consolidation, reorganization or other
business combination including strategic partnerships or joint ventures pursuant
to which the business or businesses of a third party, including projects,
stand-alone assets or technologies, are combined with that of the Company in
either a direct ownership, joint venture or strategic alliance fashion; (ii) the
acquisition, directly or indirectly, by the Company of all or a substantial
portion of the assets or equity of a third party by way of negotiated purchase
or otherwise; or (iii) the acquisition, directly or indirectly, by a third party
of all or a substantial portion of the assets or equity of the Company by way of
negotiated purchase or otherwise (the "Merger and Acquisition Transaction(s)").
Xxxxx Brothers' merger and acquisition services may include, but will not
necessarily be limited to:
(i) assistance to the Company for its acquisition of a public shell
listed on an exchange in the United States of America (the "Public
Shell") in a reverse takeover merger (the "Shell Purchase
Transaction"), such assistance to be provided over the period of
this Agreement in accordance with the terms and conditions contained
in this Agreement and the principal terms set out in Schedule B to
this Agreement; (ii) assistance in the identification of businesses,
organizations, assets or technologies that may constitute potential
Merger and Acquisition Transactions; (iii) assistance in the
evaluation of such third parties from a financial point of view;
(iv) assistance with respect to the form and structure of the Merger
and Acquisition Transaction; (v) conducting discussions and
negotiations regarding a Merger and Acquisition Transaction; and
(vi) providing other related advice and assistance as the Company
may reasonably request in connection with a Merger and Acquisition
Transaction.
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With respect to the Shell Purchase Transaction, Xxxxx Brothers, through
the Financial Advisor, will provide the following financial advisory services:
(i) provide advice regarding, and source and obtain, alternative
Public Shells to be purchased by the Company; (ii) assist in
structuring the purchase of the Public Shell and the merger
agreement between it and the Company with respect to what is usual
and standard practice on terms and conditions equivalent for
organizations in similar transactions; (iii) assist in preparing and
documenting the offering memorandum and related materials as they
relate to the purchase of the Public Shell; (iv) when the
structuring of the purchase of the Public Shell and its merger with
the Company has reached an appropriate stage, assist in the process
to purchase such Public Shell on behalf of the Company and to merge
the Public Shell with the Company; and (v) assist in obtaining and
executing such purchase and merger on terms and conditions
consistent with current market conditions and most favorable to the
Company in light of the nature of and risks inherent in the Company.
It is understood that pursuant to this Agreement, all activities
with respect to sourcing, selecting and negotiating the purchase of
the Public Shell shall be assisted by Xxxxx Brothers as an integral
part of its services provided to the Company pursuant to this
Agreement.
The Company acknowledges that Xxxxx Brothers and its affiliates are in the
business of providing merger and acquisition services (of all types contemplated
by this agreement) to others. Nothing herein contained shall be construed to
limit or restrict Xxxxx Brothers or its affiliates in conducting such business
with respect to others or in rendering such advice to others, provided that the
provision of such services will not cause any conflict of interest to Xxxxx
Brothers and its affiliates nor any prejudice to the interests of the Company.
The Company also acknowledges that Xxxxx Brothers and its affiliates have
or may have ownership interests in businesses, assets or technologies identified
by them or others to the Company as potential Merger and Acquisition
Transactions. Nothing herein contained shall be construed to limit or restrict
the ability of Xxxxx Brothers or its affiliates to be compensated for its
ownership interest in such a Merger and Acquisition Transaction on a basis
separate and apart from the compensation described herein, provided that Xxxxx
Brothers and its affiliates shall have fully disclosed then interests in
advance.
3. Strategic Planning Services
Relating to its assistance with respect to the Financing, Xxxxx Brothers
shall provide the Company with strategic planning services. Xxxxx Brothers
strategic planning services shall include, but not be limited to, the following:
(i) advice regarding the Company's business plan; (ii) advice
regarding formation of the Company's corporate goals and their
implementation; (iii) advice regarding corporate organization,
personnel and the related selection of needed specialty skills; (iv)
general corporate documentation preparation and assistance,
including services relating to assisting the Company in preparation
of its business plan and related materials, including regulatory and
filing documentation; (v) assistance regarding preparation and
organization of the Company's corporate paperwork.
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Xxxxx Brothers' assistance with strategic planning services shall be
provided in the best interest of the Company on a best efforts basis.
II. COMPENSATION
In consideration of rendering such services, the Company agrees to pay
Xxxxx Brothers on the following basis:
(i) for financial advisory services--
(a) a non-refundable signing fee of $50,000, payable upon the completion
of the audit for the years 2004 and 2005 (this fee has previously been
paid in full);
(b) a non-refundable documentation fee of US$30,000, payable from the
closing(s) of the Financing;
(a) a financing fee, payable upon closing(s) of the Financing, equal to
10% of the total Financing value:
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CORPORATE FINANCING FEE
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Public equity offering 10.00%, plus warrants
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Exercise of Warrants or Subscription 10.00%
Rights
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With respect to warrants provided as compensation as indicated in the table
above, the warrant "coverage", that is the percent of the dollar amount of
securities issued for which Xxxxx Brothers shall receive warrants to purchase
the Company's equity securities, shall be 10%. For example, if the Company
issues $1 million of common stock with warrants attached, Xxxxx Brothers shall
receive a warrant to buy $100,000 of common stock with warrants attached of the
Company. Such warrant will have a strike price that is 140% of the price of the
equity securities, or underlying equity securities, offered in the Financing, or
in the case of compensation not involving a Financing shall be at a strike price
that is 140% of the price of the Company's common stock as set by the most
recent third party sale, and shall be outstanding for a period of 5 years.
In connection with our financial advisory services, you agree that if
during the period Xxxxx Brothers is retained by you a Financing is consummated
with a third party, acting either as a Financial Investor or as a Strategic
Investor, who was introduced directly by Xxxxx Brothers ("Introduced
Investors"), or if the Company enters into a definitive agreement with
Introduced Investors which at any time thereafter results in a Financing, you
will pay Xxxxx Brothers a financing fee for the first time such Introduced
Investor participates in a Financing. For any subsequent Financing from any of
such Introduced Investors during the subsistence of this Agreement, the Company
will pay Xxxxx Brothers a financing fee equal to 3% of such Financing value. It
is understood that for purposes of this Agreement, Xxxxx Brothers shall be
deemed to have introduced such Introduced Investors to the Company not only by
physical introductions and meetings, but also by arranging or facilitating
telephonic or correspondence meetings between the parties, whether or not Xxxxx
Brothers participated in such meetings, telephone calls or correspondence.
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(ii) for merger and acquisition services--
(a) For the purchase and merger of the Public Shell, a shell purchase fee
of US$120,000, payable upon the successful purchase of the Public Shell,
payable from the closing(s) of the Financing;
(b) For any other merger or acquisition, a merger and acquisition fee
equal to the "Xxxxxx Formula" based on US$5 million increments, that is,
3% of the first US$5 million, 2% of the second US$5 million, etc., of the
consideration paid in the Merger and Acquisition Transaction, or the
Xxxxxx Formula of the equity value of the organization being acquired, at
the option of Xxxxx Brothers.
For purpose of this Agreement, "consideration" means the aggregate value,
whether in cash, securities, assumption (or purchase subject to) of debt or
liabilities (including, without limitation, indebtedness for borrowed money,
pension liabilities or guarantees) or other property, obligations or services,
paid or payable directly or indirectly (in escrow or otherwise) or otherwise
assumed in connection with the Merger and Acquisition Transaction, or the net
present value of the estimated benefits to the Company of any joint venture,
licensing or marketing agreement ("Consideration"). The value of Consideration
shall be determined as follows:
(a) the value of securities, liabilities, obligations, property and
services shall be the fair market value as shall mutually be agreed
upon at the date of the closing of the Merger and Acquisition
Transaction;
(b) the value of indebtedness, including indebtedness assumed, shall be
the face amount; and/or
(c) the net present value of the estimated benefits to the Company of
any joint venture, licensing or marketing agreement, as mutually
determined by the parties. If the parties cannot come to such mutual
determination, the net present value described above shall be
determined by arbitration.
If the Consideration payable in a Merger and Acquisition Transaction
includes contingent payments to be calculated by reference to uncertain future
occurrences, such as future financial or business performance, then any fees of
Xxxxx Brothers relating to such Consideration shall be payable at the time of
the receipt of such Consideration.
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In connection with the merger and acquisition services, the Company agrees
that if during the period Xxxxx Brothers is retained by the Company, a Merger
and Acquisition Transaction is consummated with a third party introduced by
Xxxxx Brothers or the Company enters into a definitive agreement with a third
party introduced by Xxxxx Brothers which at any time thereafter results in a
Merger and Acquisition Transaction ("Third Parties"), you will pay Xxxxx
Brothers a transaction fee equal to the Xxxxxx Formula times the Consideration.
It is understood that for purposes of this Agreement, Xxxxx Brothers shall
be deemed to have introduced such Third Parties to the Company not only by
physical introductions and meetings, but also by arranging or facilitating
telephonic or correspondence meetings between the parties, whether or not Xxxxx
Brothers participated in such meetings, telephone calls or correspondence.
(iii) for strategic planning services--
Upon closing of all the Financing, a non-refundable monthly retainer of
US$10,000 per month, payable on the first of the month, will be paid to
Xxxxx Brothers for 24 months.
(iv) for expenses--
The Company shall pay directly the reasonable out-of-pocket expenses
incurred by Xxxxx Brothers in relation to the Financing, including
out-of-pocket expenses related to Xxxxx Brothers' due diligence, subject
to such expenses being authorized in advance by the Company (including,
without limitation, reasonable professional and reasonable legal fees and
disbursements incurred by Xxxxx Brothers in connection with its engagement
hereunder with respect to services to be rendered by it upon production of
receipts by Xxxxx Brothers).
All compensation and expenses will be reimbursed to Xxxxx Brothers via
wire transfer. The Firm's wiring instructions are attached as Schedule A.
III. RIGHT TO SUB-CONTRACT OR SYNDICATE
Subject to the Company's consent, Xxxxx Brothers may sub-contract any of
its rights to provide services hereunder to qualified third parties in its sole
discretion, so long as Xxxxx Brothers remains the prime contractor of such
services to the Company. Subject to the Company's consent, Xxxxx Brothers has
the right to enter into any finder, inter dealer or syndication agreements with
qualified parties with respect to placing and arranging the Financing.
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IV. ADDITIONAL INVESTMENT BANKING SERVICES
The Company agrees that Xxxxx Brothers shall have the right, but not the
obligation, which right is exercisable in Xxxxx Brothers' sole discretion, to
provide investment banking services to the Company to provide such services in
relation to the Company during the subsistence of this Agreement and such
additional period of time as may be necessary to complete any project or
transaction already commenced pursuant to the Company's written request or
engagement of Xxxxx Brothers during the subsistence of this Agreement. Such
services may include underwriting and acting as a placement agent for the
Company's securities on a lead-managed or co-managed basis, assisting in merger
or acquisition transactions and providing other financial advisory services.
Such right shall terminate with respect to any financing, transaction or service
if the Company shall request in writing by certified mail Xxxxx Brothers to lead
such financing or transaction or to provide such service and Xxxxx Brothers
shall fail to notify the Company within fifteen (15) days thereafter that Xxxxx
Brothers will accept the engagement. In the event that Xxxxx Brothers agrees to
provide such investment banking services, Xxxxx Brothers shall be paid in
accordance with the terms and conditions to be agreed by Xxxxx Brothers and the
Company, and the terms and conditions of such engagement shall be contained in
specific engagement agreements relating to the specific financing or
transaction. Notwithstanding the above or any oral representations or assurances
previously or subsequently made by the parties, this Agreement does not
constitute a commitment by or obligation of Xxxxx Brothers to act as underwriter
or placement agent in connection with any future offering of the Company's
securities. Such a commitment on the part of Xxxxx Brothers would exist only
upon the execution of a final, written engagement agreement and then only in
accordance with the terms and conditions thereof. In any event, Xxxxx Brothers
may determine in its sole discretion, for any reason (including, without
limitation, the results of its due diligence investigation, a material change in
the Company's financial condition; business or prospects, the lack of
appropriate internal Xxxxx Brothers committee approvals or then current market
conditions) not to participate in such an offering of the Company's securities.
In the event that Xxxxx Brothers, with respect to any particular financing or
transaction, elects not to provide investment banking or financial advisory
services to the Company, nothing contained herein shall be deemed to prevent the
Company from utilizing the services of another investment banking firm for such
financing or transaction, but such retention of another investment banking firm
shall be without prejudice to Xxxxx Brothers' rights hereunder with respect to
other transactions.
Upon the successful execution of the Financing, Merger and Acquisition
Transaction or any publicly traded equity or debt capital markets financing lead
or co-managed by Xxxxx Brothers, Xxxxx Brothers, in accordance with its
customary practices, will provide market making and research services to
investors in the securities of the Company (subject, however, to the Company's
continuation of its engagement of Xxxxx Brothers as a financial advisor pursuant
to the terms of this Agreement) for a period of two years following the closing
of such Financing, and subject to Xxxxx Brothers' customary right not to make a
market in such securities at any time or to suspend research coverage).
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V. TERMINATION FOR CAUSE
The Company may terminate this Agreement for cause. For the purpose of
this Agreement, "cause" means the failure by Xxxxx Brothers to perform in a
material respect its obligations hereunder in accordance with the skill and
diligence normally provided by recognized investment banking companies;
provided, however, that the Company shall first give Xxxxx Brothers reasonable
prior written notice (a minimum of ten days notice) of the Company's intent to
terminate the engagement (such notice to specify in reasonable detail the facts
alleged to give rise to the Company's right to terminate for cause) and shall
have provided Xxxxx Brothers a reasonable opportunity to cure by performing such
obligations (the reasonableness of such opportunity to be measured not only by
Xxxxx Brothers' ability to perform during such period but also by the adverse
effect on the Company resulting from providing such additional period to enable
Xxxxx Brothers to perform).
VI. INDEMNIFICATION
The Company shall indemnify Xxxxx Brothers and hold it harmless against
any and all losses, claims, damages or liabilities to which Xxxxx Brothers may
become subject arising in any manner out of or in connection with the rendering
of service by Xxxxx Brothers hereunder, unless it is finally judicially
determined that such losses, claims, damages or liabilities resulted from the
gross negligence, bad faith and willful misconduct of Xxxxx Brothers.
The Company shall reimburse Xxxxx Brothers promptly for any legal or other
expenses reasonably incurred by it in connection with investigating, preparing
to defend or defending, or providing evidence in or preparing to serve or
serving as a witness with respect to, or otherwise relating to, any lawsuits,
investigations, claims or other proceedings arising in any manner out of or in
connection with the rendering of services by Xxxxx Brothers hereunder (including
without limitation, in connection with the enforcement of this Agreement and the
indemnification obligations set forth herein); provided, however, that in the
event of a final judicial determination is made to the effect specified above,
Xxxxx Brothers will remit to the Company any amounts reimbursed under such
paragraph.
The Company agrees that the indemnification and reimbursement commitments
set forth in this paragraph shall apply if either the Company or Xxxxx Brothers
is a formal party to any such lawsuits, claims or other proceedings and that
such commitments shall extend upon the terms set forth in this paragraph to any
controlling person, director, officer or employee of Xxxxx Brothers (each, with
Xxxxx Brothers, an "Indemnified Person"). The Company further agrees that,
without Xxxxx Brothers' prior written consent, which consent will not be
unreasonably withheld, it will not enter into any settlement of a lawsuit, claim
or any other proceeding arising out of the financings or transactions
contemplated by this Agreement unless such settlement includes an implicit and
unconditional release from the party bringing such lawsuit, claim or other
proceeding against all indemnified persons.
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The Company further agrees that the indemnified persons are entitled to
retain separate counsel of their choice in connection with any matters in
respect of which indemnification, reimbursement or contribution may be sought
under this Agreement. Fees for counsel in such cases will be payable by the
Company only if management and counsel to the Company have been consulted and
allowed to participate fully in the selection of reasonable and appropriate
counsel to the indemnified person(s). Each indemnified person shall give notice
to the Company within thirty (30) days of the assertion against such indemnified
person of any claim or the commencement of any action or proceeding relating to
any foregoing, provided further that if the indemnified person fails to notify
the Company within thirty (30) days of such assertion, then the Company shall be
relieved of any liability that it may have to such indemnified person as to such
claim hereunder.
t 6 0 The Company and Xxxxx Brothers agree that if any indemnification or
reimbursement sought pursuant to the preceding paragraph is judicially
determined to be unavailable for a reason other than the gross negligence, bad
faith or willful misconduct of Xxxxx Brothers, then whether or not Xxxxx
Brothers is the indemnified person, the Company and Xxxxx Brothers shall
contribute to the losses, claims, damages, liabilities and expenses for which
such indemnification or reimbursement is held unavailable (i) in such proportion
as is appropriate to reflect the relative benefits to the Company on the one
hand, and Xxxxx Brothers on the other hand, in connection with the financings or
transactions to which such indemnification or reimbursement relates, or (ii) if
the allocation provided by clause (i) above is judicially determined not to be
permitted, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative faults of the Company
on the one hand, and Xxxxx Brothers on the other hand, as well as any other
equitable considerations; provided, however, that in no event shall the amount
to be contributed by Xxxxx Brothers pursuant to this paragraph exceed the amount
of the fees actually received by Xxxxx Brothers hereunder.
VII. MISCELLANEOUS
Except as contemplated by the terms hereof or subpoena issued by a court
of competent jurisdiction, Xxxxx Brothers shall keep confidential all non-public
information provided to it by the Company, and shall not disclose such
information to any third party, other than such of its employees and advisors as
Xxxxx Brothers determines to have a need to know. This obligation of Xxxxx
Brothers shall survive termination of this Agreement.
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Except as required by applicable law, any advice to be provided by Xxxxx
Brothers under this Agreement shall not be disclosed publicly or made available
to any third parties without the prior approval by Xxxxx Brothers, and
accordingly such advice shall not be relied upon by any person or entity other
than the Company.
Xxxxx Brothers' engagement hereunder shall commence from the date hereof
until the expiration of this Agreement or terminated as set forth below. Subject
to the provisions of this Agreement that shall expressly survive any termination
or expiration of the understanding between the parties, either party may
terminate Xxxxx Brothers' engagement hereunder at any time by giving the other
party at least 10 days written notice without recourse.
The Company agrees that Xxxxx Brothers has the right to place
advertisements in financial and other newspapers and journals describing the
Company's Financing and Xxxxx Brothers' related services to the Company
hereunder, provided that Xxxxx Brothers will submit a copy of any such
advertisements to the Company for its prior approval, which approval shall not
be unreasonably withheld.
Nothing in this Agreement, expressed or implied, is intended to confer or
does it confer on any person or entity other than the parties hereto or their
respective successors and assigns, and to the extent expressly set forth herein,
the indemnified persons, any rights or remedies under or by reason of this
Agreement or as a result of the services to be rendered by Xxxxx Brothers
hereunder.
Neither the execution and delivery of this Agreement by the Company nor
the consummation of the financings or transactions contemplated hereby will,
directly or indirectly, with or without the giving of notice or lapse of time,
or both: (i) violate any provisions of the Certificate of Incorporation or
By-laws of the Company; or (ii) violate, or be in conflict with, or constitute a
default under, any agreement, lease, mortgage or debt of the Company.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
This Agreement may not be amended or modified except in writing signed by
each of the parties and shall be governed by and construed and enforced in
accordance with the laws of the State of Connecticut. The Company and Xxxxx
Brothers hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Connecticut and of the
United States District Courts located in Connecticut for any lawsuits, actions
or other proceedings arising out of or relating to this Agreement and agree not
to commence any such lawsuit, action or other proceeding except in such courts.
Both parties further agree that service of any process, summons, notice or
document by mail, return receipt requested, to the other party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought against such other party in any such court. The Company
and Xxxxx Brothers hereby irrevocably and unconditionally waive any objection to
the laying of venue of any lawsuit, action or other proceeding arising out of or
relating to this Agreement in the courts of the State of Connecticut or the
United States District Courts located in the State of Connecticut, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Any right to trial by jury
with respect to any lawsuit, claim or other proceeding arising out of or
relating to this Agreement or the services to be rendered by Xxxxx Brothers
hereunder is expressly and irrevocably waived.
13
This Agreement is subject to the approval of the board of directors of
both parties.
If the foregoing correctly sets forth the understanding and agreement
between Xxxxx Brothers and the Company, please so indicate in the space provided
for that purpose below, whereupon this letter shall constitute a binding
agreement as of the date hereof.
Xxxxx Brothers, Inc.
By: ________________________________
Name: Xxxx X. Xxxxx
Title: Chairman
AGREED:
Beijing Zhong Ran Wei Ye Gas Co., Ltd.
By: ________________________________
Name: Xx. Xxx Yuchuan
Title: Chairman
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SCHEDULE A
XXXXX BROTHERS ELECTRONIC WIRE TRANSFER INSTRUCTIONS
Please wire funds to:
Bank: National Iron Bank
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx
Telephone: (000) 000-0000
Account: Xxxxx Brothers, Inc.
Account #: 38718
ABA#: 000000000
