AMENDED AND RESTATED CONSULTING AGREEMENT
EXHIBIT
10.6
AMENDED
AND RESTATED CONSULTING AGREEMENT
This
Amended and Restated Consulting Agreement (this “Agreement”)
is
made on January 18, 2007, by and between Fujian Zhongde Technology Co., Ltd.,
a
People’s Republic of China corporation (“Client”),
and
Allstar Capital, Inc., a Maryland corporation (“Consultant”).
In
consideration of the respective covenants, representations, warranties and
agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which the parties hereby
acknowledge, the parties agree as follows:
RECITALS
WHEREAS,
Client and Consultant entered into that certain Consulting Agreement dated
January 7, 2006 (the “Original
Consulting Agreement”);
WHEREAS,
the Original Consulting Agreement was amended by that certain Agreement
Amendment to Consulting Agreement dated October 16, 2006, by and between Client
and Consultant (the “Amendment”);
and
WHEREAS,
Client and Consultant desire to amend and restate the Original Consulting
Agreement and the Amendment in their entirety as provided below.
NOW
THEREFORE, in consideration of the foregoing premises and the mutual covenants
hereinafter set forth, IT IS AGREED that the Original Consulting Agreement
and
the Amendment are hereby amended and restated in their entirety to read as
follows:
ARTICLE
I.
ENGAGEMENT
OF CONSULTANT
Section
1.01 Engagement
of Consultant.
Client
hereby engages Consultant to render consulting services to Client on a
non-exclusive basis and on the terms and for the consideration specified herein.
As such, Consultant will familiarize itself to the extent it deems necessary
and
appropriate with the business, operations, condition (financial and otherwise)
and prospects of Client and will provide advice on the capital structure of
Client, financing options, types of financial instruments to be offered, and
the
likely market segment that the financial instruments are suitable. Consultant
may identify possible investors interested in providing capital to Client or
otherwise participating in a Transaction (as defined below) pursuant to terms
to
be negotiated by and among such possible investors and Client (without the
involvement of Consultant), and, at the option of Consultant, will provide
consulting services with respect to any Transaction. If Consultant, after
becoming familiar with potential transactions of Client, declines to render
advice to Client with respect to a particular Transaction, Consultant shall
not
enter into any other engagement with a third party with respect to such
Transaction. Client understands that no particular result is promised or can
be
guaranteed by Consultant in rendering the services for any particular matter
or
with respect to any Transaction. Consultant undertakes to render the services
competently and with professional skill. Client will provide Consultant with
such factual information and materials as Consultant may require to perform
such
consulting services. Client shall determine the scope of the work to be
performed, but after having agreed to perform such
services,
Consultant shall determine the means, manner and method of performing these
services. For purposes of this Agreement, a “Capital
Transaction”
shall
mean any private placement of any securities of Client (including debt, equity
or any derivative or convertible securities) with investors identified by
Consultant and any other investors who participate in such transaction through
the direct or indirect efforts of Consultant (“Consultant
Identified Investors”).
For
purposes of this Agreement, an “M&A
Transaction”
shall
mean (a) any acquisition of outstanding capital stock or control of the
outstanding capital stock or all or substantially all of the assets of companies
made by Client by one or more Consultant Identified Investors or (b) any merger,
consolidation, tender or exchange offer, leveraged buyout, acquisition or sale
of substantially all of Client’s assets or equity interests, recapitalization
involving the distribution of cash, securities or property to Client’s equity
holders or similar transactions involving all or a substantial part of the
business, assets or equity interests of Client and/or its affiliates in one
or
more transactions. A “Transaction”
shall
mean any Capital Transaction or M&A Transaction and any additional matters
identified in advance and mutually agreed to in writing by Consultant and
Client.
Section
1.02 Broker
or Dealer; Investment Advisor Status.
(a) Consultant
is not (i) a registered “broker” (“Broker”)
or
“dealer” (“Dealer”)
as
such terms are defined in Section 3(a)(4) and 3(a)(5) of the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”),
or
(ii) an investment adviser (“Investment
Advisor”),
as
such term is defined in Section 202(a)(11) of the Investment Advisors Act of
1940, as amended, and will not act to effect any transactions in securities
for
the account of Client. With respect thereto and notwithstanding anything set
forth herein to the contrary, in connection with any transaction, Consultant
shall not carry out any activity or function that (i) may be traditionally
performed by or otherwise be deemed to include those of (A) a Broker, Dealer
or
Investment Adviser or (ii) would require Consultant to register itself as a
Broker, Dealer, or Investment Advisor. In particular, Consultant shall not
do,
cause to be done or otherwise participate, directly or indirectly, in any of
the
following on behalf of Client: (a) participate in the negotiation of terms
and
conditions of the sale and purchase of any securities of Client; (b) assist
Client in the distribution of materials relating to the sale of any securities
of Client; (c) prepare any analysis or provide any advice to any potential
investors regarding the benefits or potential return relating to the purchase
of
any securities of Client; (d) directly assist Client or any prospective investor
of securities of Client with the completion of a Transaction; (e) facilitate
the
sale, exchange or transfer of securities of Client or any handling of any funds
received from the potential investors for any securities of Client, (f) discuss
the details of a proposed Transaction with a potential investor, or (g) make
recommendations to a potential investor with respect to a Transaction.
(b) Client
understands and agrees that Client may need to retain a Broker, Dealer or
Investment Advisor to assist Consultant in certain aspects of a Transaction.
In
addition, Client understands and agrees that if Client requests Consultant
to
undertake services causing Consultant to become or to be deemed a Broker, Dealer
or Investment Advisor, then investors might have a right of rescission or an
action for damages with respect to Transactions in which Consultant is deemed
to
be a Broker, Dealer or Investment Advisor.
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ARTICLE
II.
TERM;
TERMINATION
Section
2.01 Term.
The
term of this Agreement shall commence on the date hereof and shall continue
until the two (2) year anniversary of the date set forth above (the
“Initial
Term”).
This
Agreement will automatically renew for unlimited consecutive additional one
(1)
year periods (the commencement date of each such one (1) year renewal period
is
referred to herein as a “Renewal
Date”)
unless
either party provides written notice of non-renewal to the other party at least
thirty (30) days prior to the expiration of the Initial Term or any renewal
period thereafter as the case may be (the Initial Term and such renewal period,
if any, shall be referred to herein as the “Term”).
Section
2.02 Termination.
Upon
termination of this Agreement, except as otherwise provided herein, Client’s
sole responsibility to Consultant shall be to pay Consultant for any unpaid
expenses, fees or other consideration earned pursuant to this
Agreement.
ARTICLE
III.
COMPENSATION;
REIMBURSEMENT
Section
3.01 Signing
Fee.
Upon
execution of the Original Agreement, Client paid Consultant Twenty Thousand
Dollars ($20,000).
Section
3.02 Additional
Payments.
(a) During
2006, Client paid consultant an aggregate of One Hundred Eighty Thousand Dollars
($180,000.00) in connection with services rendered hereunder.
(b) On
October 24, 2006, Client caused its parent company, China Clean Energy Inc.,
a
Delaware corporation (“CCE”),
to
issue various assignees of Client a total of Five Hundred Eighty Three Thousand
Three Hundred Thirty Four (583,334) shares of common stock of CCE, $.001 par
value per share.
Section
3.03 Expenses.
Client
shall reimburse Consultant for all reasonable costs and expenses that are
incurred by or on behalf of Consultant in carrying out its duties or obligations
under this Agreement and that Client has approved in advance in writing.
Consultant’s invoices for approved costs and expenses shall be payable by Client
within thirty (30) days of Client’s receipt of such invoices.
Section
3.04 Registration
of Securities.
If, at
any time or from time to time, Client shall determine to register any of its
equity securities, either for its own account or the account of a stockholder,
Client shall promptly (but in no event less than thirty (30) days prior to
registration) give Consultant written notice thereof; and shall include in
such
registration (and any related qualifications including compliance with Blue
Sky
laws), and in any underwriting involved therein, all shares of common stock
held
by Consultant or its designees, as specified in a written response(s) by
Consultant, made within twenty (20) days after receipt of the written notice
of
registration from Client. Notwithstanding any other provision of this Section
3.04, if the registration by Client is for a registered public offering
involving an underwriting and the managing underwriter determines that marketing
factors require a limitation of the number of
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shares
to
be underwritten, the percentage of shares of securities to be registered for
sale by Client and Consultant shall be equally reduced. If the registration
by
Client is for a registered public offering involving an underwriting, Consultant
agrees that it shall (a) not effect any public sale or distribution (including
sales pursuant to Rule 144) of equity securities of Client or any securities
convertible into or exchangeable or exercisable for such securities and (b)
provide upon request, customary lock-up agreements for itself and its affiliates
by which they agree not to sell any of their shares of common stock for a period
of 90 days from the effective date of the registration statement, or for such
other length of time determined by the managing underwriter. In addition to
the
rights set forth above, Consultant shall be entitled to request, at any time
and
in any number of requests, that Client file a registration statement on Form
S-3
(or any successor form to Form S-3) for an offering of shares of common stock
of
Client held by Consultant having an aggregate market value (net of underwriters’
discounts and commissions) of at least $500,000 and the Client is a registrant
entitled to use Form S-3 to register the shares of common stock for such an
offering, Client shall use its commercially reasonable efforts to cause such
shares of common stock to be registered for the offering on such form and to
cause such shares of common stock to be qualified in such jurisdictions as
Consultant may reasonably request. If such offer is to be an underwritten
offering, the underwriter shall be selected by Consultant.
Section
3.05 No
Reduction Due to Other Advisors.
No fee
payable to any other advisor either by Client or any other entity shall reduce
or otherwise affect the compensation, fees, payments or reimbursements payable
hereunder to Consultant.
ARTICLE
IV.
WORK
PRODUCT
Consultant
shall promptly and fully disclose to Client in writing all Work Products (as
defined below), and the entire right, title and interest to all such Work
Products (including, without limitation the entire right, title and interest
to
any renewals, reissues, extensions, substitutions, continuations, continuations
in part, or divisions that may be filed with respect to the Work Products)
shall
be Client’s exclusive property and all Work Products developed by Consultant are
hereby assigned to Client. Consultant will, at Client’s expense, give Client all
assistance reasonably required to perfect, protect, and use the Work Products.
The obligations of Consultant pursuant to this Article IV shall survive for
the
one (1) year period immediately following termination of this Agreement. As
used
herein, “Work
Product”
means
any work product, improvement, discovery, design, work or idea (whether
patentable or not and including those which may be subject to copyright
protection, trademark protection or other intellectual property rights
protection) generated, conceived, created or reduced to practice by Consultant
alone or in conjunction with others, during or after working hours, that relates
directly or indirectly to Client’s or its subsidiaries’ businesses or to
Client’s actual research or development.
ARTICLE
V.
ACCURACY
OF DISCLOSURE
Client
agrees to cooperate with Consultant and will furnish to, or cause to be
furnished to, Consultant all information and data concerning Client (the
“Information”)
that
Consultant reasonably deems appropriate in connection with the services to
Client as provided herein and will provide Consultant with access to Client’s
officers, directors, employees and advisors.
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Client
represents and warrants that all Information made available to Consultant by
Client with respect to any Transaction included or incorporated by reference
into a related private placement memorandum or prospectus will be complete
and
correct in all material respects as of the date such Information is provided,
and as of the closing date of the related Transaction, and will not be
misleading or violate the anti-fraud provisions of the Exchange Act in any
material respect, and that any projections, forecasts or other Information
provided by Client to Consultant will have been prepared in good faith and
will
be based upon reasonable assumptions and projections. Client agrees to promptly
notify Consultant if Client believes that any Information that was previously
provided to Consultant has become materially misleading. Client acknowledges
and
agrees that in rendering its services hereunder, Consultant will be using and
relying on the Information (and information available from public sources and
other sources deemed reliable by Consultant) without independent verification
thereof or independent appraisal or evaluation of Client or any party to a
Transaction. Consultant does not assume responsibility for the accuracy or
completeness of the Information. If all or any portion of the business of Client
is engaged in through subsidiaries or other affiliates, the references in this
paragraph to Client will, when appropriate, be deemed also to include all such
subsidiaries or other affiliates.
ARTICLE
VI.
INDEMNIFICATION
Client
agrees to indemnify and hold harmless Consultant and its affiliates and their
respective directors, officers, managers, attorneys, finders, agents,
representatives, advisors, stockholders, members and employees, and each person,
if any, who controls Consultant within the meaning of the Securities Act of
1933, as amended (the “Securities
Act”)
and
the Exchange Act (collectively, the “Consultant
Indemnified Parties”)
in
accordance with the provisions for indemnification and contribution set forth
in
Attachment “A” hereto, which is incorporated by reference in and made a part of
this Agreement as if fully set forth herein.
ARTICLE
VII.
PUBLICITY
With
the
prior written consent of Client, which shall not be unreasonably withheld,
Consultant shall have the right to place advertisements in mailings and
financial and other newspapers and journals at its own expense describing its
services hereunder to Client relating to any consummated Transaction and using
Client’s logo, slogan, trademark, and/or service xxxx.
ARTICLE
VIII.
CONFIDENTIALITY;
MATERIAL NONPUBLIC INFORMATION
Section
8.01 Restrictions
on Consultant.
Consultant recognizes that its relationship with Client will give it access
to
non-public proprietary information, confidential information and trade secrets.
Consequently, during the Term of this Agreement and for the two (2) year period
immediately thereafter, Consultant will not use or disclose for itself or for
others (except persons specifically designated by Client) any Confidential
Information. “Confidential
Information”
shall
include but not be limited to, any information concerning Client’s processes,
products, services, inventions, purchasing, accounting, marketing, selling
methods and techniques, research and development, computer programs, purchasing
information, ideas and
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plans
for
development, historical financial data and forecasts, long range plans and
strategies, customer lists, Information and any other information related to
Client’s customers, and any such other information concerning the business of
Client or its manner of operation that is not generally known in the industry.
Confidential Information shall not include any information that: (a) is or
subsequently becomes publicly available without Consultant’s breach of this
Agreement; (b) was in the Consultant’s possession at the time of disclosure and
was not acquired from Client; (c) is received from third parties, and is
rightfully in the possession of such third parties and not subject to a
confidentiality obligation of third parties; (d) is required by law to be
disclosed (with prior notice to Client); or (e) is intentionally disclosed
without restriction by Client to a third party.
Section
8.02 Regulation
FD Disclosure.
Notwithstanding anything to the contrary contained herein, Client shall not,
and
shall cause each of its subsidiaries and each of their respective officers,
directors, employees and agents, not to, provide Consultant with any material,
nonpublic information regarding the Company or any of its subsidiaries without
the express written consent of Consultant. In the event of a breach of the
foregoing covenant by Client, and provided that Client shall have failed
(following proper written request therefor) to make an appropriate public
disclosure consistent with the requirements of Regulation FD, Consultant shall
have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such material, nonpublic information
without the prior approval by Client. Consultant shall not have any liability
to
Client for any such disclosure.
Section
8.03 Restrictions
on Client.
Client
agrees that any advice or communication, written or oral, provided by Consultant
pursuant to this Agreement will be treated by Client as confidential, will
be
solely for the information and assistance of Client in connection with its
consideration of a Transaction and will not be used, circulated, quoted or
otherwise referred to for any other purpose, nor will it be filed with, included
in or referred to, in whole or in part, in any registration statement, proxy
statement or any other communication, whether written or oral, prepared, issued
or transmitted by Client or any affiliate, director, officer, employee, agent
or
representative of any thereof, without, in each instance, Consultant’s prior
written consent. Client further agrees that it will not disclose the identity
of
Consultant, the existence of this Agreement or the engagement created hereby
or
Consultant’s role with respect to any Transaction without the prior written
consent of Consultant, other than as may be required by applicable law or
regulations, including any requirements imposed under the Securities Act or
the
Exchange Act; provided, that in the event such disclosure is required under
applicable law or regulation, Client shall notify Consultant and provide
Consultant with an opportunity to review and provide comments with respect
to
such proposed disclosure not less than two (2) business days prior to making
such disclosure; provided, further, that if Consultant fails to respond to
Client within two (2) business days of receipt of such proposed disclosure,
Consultant shall be deemed to have consented to such proposed disclosure and
waived its right to review and provided comments with respect to such
disclosure.
Section
8.04 Third
Party Information.
Client
recognizes that Consultant has received, and in the future may receive, from
third parties their confidential or proprietary information subject to a duty
on
the Consultant’s part to maintain the confidentiality of such information and to
use it only for certain limited purposes. Consultant agrees at all times during
the Term of this
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Agreement,
not to commingle the Confidential Information with other third parties’
confidential or proprietary information.
Section
8.05 Surrender
of Material upon Termination of Agreement.
Upon
termination of this Agreement, Consultant shall return immediately to Client
all
Work Products including, but not limited to, books, records, notes, data and
information relating to Client or its business, and will so certify in writing
that it has done so.
ARTICLE
IX.
CONFLICT
WAIVER
Client
acknowledges that Consultant and its affiliates have and will continue to have
other relationships with parties other than Client pursuant to which Consultant
may acquire information of interest to Client. Consultant shall have no
obligation to disclose such information to Client, or to use such information
in
connection with any contemplated Transaction. Client recognizes that Consultant
is being engaged hereunder to provide the consulting services described above
only to Client and is not acting as an agent or a fiduciary of, and shall have
no duties or liability to, the equity holders of Client or any third party
in
connection with its engagement hereunder, all of which are hereby expressly
waived. No one other than Client (and such other parties in such capacities,
if
any) is authorized to rely upon the engagement of Consultant hereunder or any
statements, advice, opinions or conduct by Consultant.
ARTICLE
X.
MISCELLANEOUS.
Section
10.01 Notices.
Any
notices desired, required or permitted to be given hereunder shall be delivered
personally or mailed, certified or registered mail, return receipt requested,
or
delivered by overnight courier service, to the following addresses, or such
other addresses as shall be given by notice delivered hereunder, and shall
be
deemed to have been given upon delivery, if delivered personally, three (3)
business days after mailing, if mailed, or one (1) business day after timely
delivery to the overnight courier service, if delivered by overnight courier
service:
(a) If
to
Consultant:
Allstar
Capital Inc.
0000
Xx.
Xxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Attn:
Xx.
Xxxx Xxxxx
(b) If
to
Client:
Fujian
Zhongde Technology Co., Ltd.
Fulong
Industrial Zone
Logtian
Town Fuqing City
Fujian,
China 35013
Attn:
Xx.
Xxx-ming Ou
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or
to
such other address as such party may indicate by a written notice delivered
to
the other party hereto.
Section
10.02 Attorneys’
Fees.
If any
party to this Agreement brings an action or proceeding directly or indirectly
based upon this Agreement or the matters contemplated hereby against another
party, the prevailing party shall be entitled to recover, in addition to any
other appropriate amounts, its reasonable costs and expenses in connection
with
such action or proceeding, including, but not limited to, reasonable attorneys’
fees and court costs.
Section
10.03 Governing
Law; Jurisdiction.
It is
the intention of the parties that this Agreement shall be subject to and shall
be governed by and construed in accordance with the internal laws of the State
of New York without reference to its choice of law provisions. All actions
and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any New York state or federal court sitting in New
York, New York (Borough of Manhattan). The parties hereto hereby (a) submit
to
the exclusive jurisdiction of any such court for the purpose of any claim,
action, suit, proceeding, arbitration, mediation or investigation (an
“Action”)
arising out of or relating to this Agreement brought by any party hereto, and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally
to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated hereby may not be enforced in or
by
any of the above-named courts.
Section
10.04 Entire
Agreement.
This
Agreement sets forth the entire understanding of the parties relating to the
subject matter hereof, and supersedes and cancels any prior communications,
understandings and agreements between the parties with respect to the subject
matter contemplated herein.
Section
10.05 Amendment;
Waiver.
This
Agreement may not be amended or modified except by a writing executed by both
of
the parties hereto. The waiver by any party hereto of any breach of any
provision hereunder shall not operate or be construed as a waiver of any prior
or subsequent breach of the same or any other provision hereunder.
Section
10.06 Assignability.
Neither
party to this Agreement may assign its rights and obligations under this
Agreement without the prior written consent of the other party.
Section
10.07 Binding
Effect.
This
Agreement and any amendment thereto, shall be binding upon and shall inure
to
the benefit of the successors and assignees of the parties hereto.
Section
10.08 Relationship.
Nothing
in this Agreement shall be interpreted to provide that Consultant and Client
are
partners, joint venturers, agents or assignees of the other. Consultant is
and
shall remain an independent contractor providing services to Client, and is
not
an employee or agent of Client, and neither party shall be entitled to bind
the
other party in any way.
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Section
10.09 Headings.
The
section headings herein are intended for reference and shall not by themselves
determine the construction or interpretation of this Agreement.
Section
10.10 Severability.
Should
a court or other body of competent jurisdiction determine that any provision
in
this Agreement is invalid or unenforceable, the remaining provisions in this
Agreement nevertheless shall be deemed valid and enforceable, and continue
in
full force and effect without being impaired or invalidated in any
way.
Section
10.11 Further
Assurances.
The
parties shall execute, acknowledge and deliver any further documents,
instruments, or other assurances and shall take any other action consistent
with
the terms of this Agreement that may be reasonably requested by any other party
or its counsel for the purpose of confirming or effectuating any of the actions
contemplated by this Agreement.
Section
10.12 Remedies
Cumulative.
Any
termination of this Agreement shall be without prejudice to any right or remedy
to which a party may be entitled either by law, or in equity, or under this
Agreement.
Section
10.13 Survival.
Notwithstanding any termination of this Agreement, Section 2.02 and Articles
III, IV, VI, VIII and this Article X shall survive and remain in full force
and
effect.
Section
10.14 Counterparts.
This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one and the same Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.
ALLSTAR
CAPITAL INC.
By:
/s/ Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
President
FUJIAN
ZHONGDE TECHNOLOGY CO., LTD.
By:
/s/ Tai-ming Ou
Name:
Tai-ming Ou
Title:
Chief Executive Officer
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Attachment
“A”
Indemnification
and Contribution
Client
shall indemnify and hold harmless Consultant and each of its controlling
persons, subsidiaries, affiliates, directors, officers, and employees
(“Indemnified
Persons”),
from
and against all losses, claims, damages and liabilities, and all suits, actions,
claims, proceedings and investigations in respect thereof, relating to or
arising out of the activities contemplated by Consultant’s engagement described
in the Consulting Agreement to which this Attachment “A” is attached. The
foregoing shall include the reasonable expenses incurred by Consultant and
Indemnified Persons in appearing as witnesses or being deposed, producing
documents or otherwise being involved in any suits, actions, proceedings or
investigations. Client shall reimburse Consultant and each Indemnified Person
for all reasonable expenses, including attorneys’ fees and disbursements, as
they are incurred in connection with investigating, preparing for or defending
any suit, action, proceeding or investigation, whether or not Consultant or
such
Indemnified Person shall be a party thereto, whether or not the same shall
involve or result in any liability on the part of Consultant or such Indemnified
Person; provided that Client shall advance such expenses only upon receipt
of an
undertaking by Consultant or such person to repay such advances if it shall
ultimately be determined that Consultant or such person was not entitled to
be
indemnified. Notwithstanding the forgoing, Client shall not, however, be
obligated to indemnify Consultant or any Indemnified Person in respect of any
loss, claim, damage, liability or expense to the extent the same is found by
a
final judgment of a court of competent jurisdiction to have resulted from gross
negligence, willful misconduct or bad faith on the part of Consultant or such
Indemnified Person. Consultant shall have no liability to Client for any loss,
claim, damage, liability or expense related to or arising out of the activities
contemplated by Consultant’s engagement, except to the extent such loss, claim,
damage, liability or expense is found by a final judgment of a court of
competent jurisdiction to have resulted from gross negligence, willful
misconduct or bad faith on the part of Consultant.
If
any
suit, action, claim, proceeding or investigation is instituted against
Consultant or any Indemnified Person aforesaid in respect of which
indemnification may be sought hereunder, Consultant or such person shall
promptly notify Client thereof in writing, but the omission so to notify Client
shall not relieve Client from any liability except to the extent Client shall
have been materially prejudiced by such omission. Neither Consultant nor any
Indemnified Person shall be required to provide notice to Client with respect
to
any suit, action or proceeding in which Client is named a defendant. Client
shall be entitled to assume the defense of any suit, action or proceeding with
counsel reasonably satisfactory to Consultant; provided,
however,
that if
the defendants in any such suit, action or proceeding include both Consultant
or
an Indemnified Person and Client or another indemnified person, and counsel
for
Consultant or such Indemnified Person shall have advised in writing that a
conflict or potential conflict exists between Consultant or such Indemnified
Person and Client or another indemnified person, or that there may be one or
more legal defenses available to Consultant or an Indemnified Person that are
different from or additional to those available to Client or another indemnified
person, then Client shall not have the right to assume the defense of such
suit,
action or proceeding on behalf of Consultant or such Indemnified Person, and
Consultant and such Indemnified Person shall have the right to select separate
counsel to defend such suit, action or proceeding on its behalf, with costs
to
be borne by Client. Subject to the foregoing, Client shall not be liable for
the
A-1
expenses
of more than one separate counsel (in addition to local counsel) for Consultant
and all Indemnified Persons similarly situated in any one suit, action or
proceeding or substantially similar suits, actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances.
Client shall not be liable for the settlement of any suit, action, claim or
proceeding by Consultant or any Indemnified Person without Client’s prior
written consent. Client agrees that it shall not settle any suit, action, claim
or proceeding relating to or arising out of the activities contemplated by
Consultant’s engagement, unless such settlement includes a provision
unconditionally releasing Consultant and each Indemnified Person from all
liabilities in respect of the matters which are the subject of such suit, action
claim or proceeding. The provisions hereof are in addition to all other existing
rights to indemnification on the part of Consultant and each Indemnified Person
aforesaid, and shall survive any termination of Consultant’s engagement
hereunder.
In
order
to provide for just and equitable contribution, if a claim for indemnification
hereunder is made, but it is found in a final judgment of a court of competent
jurisdiction that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then Client, on the one hand, and Consultant, on the other hand, shall
contribute to the amounts paid, payable or suffered in respect of the losses,
claims, damages, liabilities or expenses for which indemnification is
unavailable or insufficient (i) in such proportion as appropriately reflects
the
relative benefits to Client, on the one hand, and Consultant, on the other
hand,
from the transaction contemplated by Consultant’s engagement hereunder, or (ii)
if the allocation provided by clause (i) is not permitted by applicable law,
in
such proportion as appropriately reflects not only the relative benefits
referred to in clause (i), but also the relative faults of Client, on the one
hand, and Consultant, on the other hand, in connection with the statements,
acts
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. It is agreed
that it would not be just or equitable if the contribution provided for herein
were determined by pro rata allocation or any other method which does not take
into account the foregoing. The relative benefits to Client and Consultant
shall
be deemed to be in the proportion which (A) the total amount to be paid by
Client from the transaction contemplated by Consultant’s engagement (whether or
not consummated), bears to (B) the fees actually received by Consultant for
its
engagement (excluding any amounts received in reimbursement of expenses). In
no
event shall Consultant’s share of any liability be in excess of the fees
actually received by Consultant for its engagement (excluding any amounts
received in reimbursement of expenses).
A-2
