INVESTMENT BANKING AGREEMENT
Xin Net Corporation, a Florida corporation having its head
office at:
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000.
Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
(Hereinafter referred as "Xin Net")
And:
iBanc Group, Inc. a California company having its head office
at:
0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx, XXX 00000
(Hereinafter referred as "iBanc")
Whereas:
A. Xin Net is an OTC-BB company trading under the symbol: XNET.
B. Xin Net and iBanc desire to enter into an agreement whereby iBanc will
arrange for a financing for Xin Net and provide other services of an
advisory nature.
C. On October 20, 2001, Xin Net advised iBanc that it had signed an
agreement dated October 1, 2001 to acquire all of the shares of
Protectserve Pacific Ltd. ("PSP"), a Hong Kong company.
D. Xin Net and PSP are now negotiating to cancel the agreement with PSP
and to replace it with a new agreement by which Xin Net will acquire
control of a publicly traded shell company, advance to this company up
to $1,000,000 US, the shell company will acquire PSP and thereafter Xin
Net will distribute its shares of the shell in the form of a dividend.
Wherefore, Parties hereto, in consideration of the mutual covenants contained
herein, agree as follows:
A. The Financing
1. Within 60 days of the signing of this Agreement, iBanc shall arrange
for the purchase of Twelve Million (12,000,000) shares of the
restricted common stock of Xin Net, at an agreed price of $0.50 US per
share (the "Financing").
2. Under no circumstances, without the express agreement in writing of Xin
Net, shall iBanc be entitled to any extension of the 60 day time for
arranging the Financing and, under no circumstances, shall Xin Net have
any obligation, financial or otherwise to iBanc, should iBanc, for any
reason, fail to arrange the Financing in its entirety
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B. Advisory Services
3. iBanc, shall, at the sole option of Xin Net, provide advisory services
to Xin Net for a period of up to 24 months, which services shall
include, but will not necessarily be limited to, the followings:
o Advice regarding the formation of corporate goals and their
implementation;
o Advice regarding the financial structure of Xin Net or its
divisions, or any programs and projects undertaken by any of the
foregoing;
o Advice regarding obtaining further financing;
o Advice regarding corporate organization, personnel, and selection
of needed specialty skills;
o SEC filings;
o Completion and distribution of a research report;
(i) in English to be distributed among financial institutions
in the U.S.
(ii) in Chinese to be distributed among financial institutions
in China, Taiwan, Hong-Kong and Singapore;
o Market intelligence implementation; and
o Mergers and acquisitions.
4. Xin Net acknowledges that iBanc and its affiliates are in the business
of providing advisory services of all types contemplated by this
Agreement to others. Nothing herein contained shall be construed to
limit or restrict iBanc or its affiliates in conducting such business
with respect to others or in rendering such advice to others, provided
however, iBanc agrees that any information which it acquires as a
result of its association with Xin Net shall be held in the strictest
confidence and shall not be used or disclosed in any manner without the
express written consent of Xin Net.
5. Furthermore, in the performance of its duties, iBanc shall provide Xin
Net with its best judgment and efforts and shall at all times conduct
itself in good faith.
C. Fees Payable to iBanc
6. The fees payable to iBanc for arranging for the Financing together with
such advisory services as Xin Net may request shall be as follows:
(a) $840,000US payable in equal monthly installments of $35,000US
commencing on the 20th of each month following the month in
which Xin Net receives the sum of $6,000,000 US from the
Financing;
(b) 600,000 restricted common shares of Xin Net to be issued to
iBanc or its designee within 30 days of completion of the
Financing;
(c) $600,000US to be paid to iBanc within 30- days of the
completion of the Financing as a transaction fee; and
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(d) a warrant to be issued to iBanc within 30 days of the
completion of the Financing for the purchase of 500,000 shares
of Xin Net exercisable at a price per share of 115% of the
average closing price of the shares of Xin Net over the last
10 days of trading prior to the date of issue of the warrant;
and
(e) a further warrant to be issued to iBanc within 30 days of the
completion of the Financing for the purchase of another
500,000 shares of Xin Net exercisable at price of $0.50 US per
share; both warrants are for a period of 5 years.
7. Xin Net shall have no obligation to pay any fees to iBanc unless Xin
Net receives $6,000,000 US pursuant to the Financing. Furthermore, in
the event that it completes the Financing, iBanc shall not be entitled,
nor shall the purchasers of any of the shares issued on the Financing,
have any right to receive by way of dividend any shares of the public
company referred to in Recital D.
8. Within 90 days of the date on which the average trading price of Xin
Net's shares for the previous 15 trading days exceeds $3.00 US per
share, Xin Net shall file a Registration Statement for the shares
referred to in paragraphs 6(d) and 6(e) above.
9. The monthly fees paid pursuant to paragraph 6(a) above shall be paid to
iBanc by wire transfer as follows:
Bank of America (Woodbridge Branch)
Bank's address: 0000 Xxxxxxxx Xxx, Xxxxxx, XX
Account Name: iBanc Group, Inc.
Account Number: 10154 11652
ABA Number: 21000358
C. Board Appointment
10. After the completion of the Financing, and during the time that iBanc
provides advisory services to Xin Net as set out above, Xin Net will,
at iBanc's option and if so requested by iBanc, recommend and use its
best efforts to elect one designee of iBanc, at the option of iBanc,
either as a member or advisor to its Board of Directors. Such designee,
if elected or appointed, shall attend meetings of the Board and receive
no more or less compensation than is paid to other non-management
directors of the Company and shall be entitled to receive reimbursement
for all reasonable costs incurred in attending such meetings including,
but not limited to, food, lodging and transportation.
11. To the extent permitted by law, Xin Net will agree to indemnify iBanc's
designee for the actions of such designee as a director of the Xin Net.
In the event Xin Net maintains a liability insurance policy affording
coverage for the acts of its officers and directors, it will agree, if
possible, to include, iBanc designee as an insured under such policy.
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D. General
12. iBanc has no liability in respect of any services or advice provided to
Xin Net by persons other than iBanc (including accountants, legal
advisers and other specialist advisers) and the degree to which iBanc
may rely on the work of such other persons shall not be affected by any
limitation of liability for such work agreed between them and Xin Net.
13. iBanc will not be responsible for any due diligence for Xin Net in
relation to any transaction which is carried out by specialist advisers
(such as accountancy, tax, legal or valuation advisers) notwithstanding
that any information or advice from these advisers may be passed on to
iBanc or passed on by iBanc to Xin Net.
14. In addition to all fees payable to iBanc as per the terms hereof, Xin
Net agrees to reimburse iBanc for all of its reasonable, pre-approved
with written approval, out-of-pocket expenses incurred in connection
with its activities under this Agreement.
15. This Agreement constitutes the entire understanding of the parties with
respect to the subject matter hereof and may not be altered or amended
except in writing signed by both parties.
16. This Agreement shall be governed by and construed under the laws of the
State of Florida.
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17. Neither the execution and delivery of this Agreement by Xin Net nor the
consummation of the 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 Xin Net or (ii) violate, or be in conflict with, or
constitute a default under any agreement, lease, mortgage, debt or
obligation of the Xin Net or require the payment, any pre-payment or
other penalty with respect thereto.
ACCEPTED AND AGREED TO:
Xin Net Corporation IBanc Group, Inc.
By: /s/ Xxxx Xxxx By: /s/ Xxxxxxx Xxxxx
-------------- -----------------
Xxxx Xxxx, President Xxxxxxx Xxxxx, President and
CEO
Date: 11/23/2001 Date: 11/23/2001
