EXHIBIT 10.2
 
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February 8, 2010

STRICTLY CONFIDENTIAL

Frank C. Ingriselli
President & CEO
Pacific Asia Petroleum, Inc.
250 East Hartsdale Ave.
Hartsdale, NY 10530

Dear Mr. Ingriselli:

This letter (the “Agreement”) constitutes the agreement between Rodman &
Renshaw, LLC (“Rodman” or the “Placement Agent”) and Pacific Asia Petroleum,
Inc. (the “Company”), that Rodman shall serve as the exclusive placement agent
for the Company, on a “reasonable best efforts” basis, in connection with the
proposed placement (the “Placement”) of  registered securities (the
“Securities”) of the Company, including 5,000,000 shares (the “Shares”) of the
Company’s common stock, par value $0.001 per share (the “Common Stock” at a
price of $4.00 per Share for aggregate gross proceeds to the Company of
approximately $20,000,000, along with common stock purchase warrants (“Series A
Warrants”) to purchase up to, in the aggregate, an additional $9,000,000 of
Common Stock at a price of $4.50 per share and common stock purchase warrants
(“Series B Warrants,” and together with the Series A Warrants, the “Warrants”)
to purchase up to, in the aggregate, an additional $8,000,000 of Common Stock at
a price of $4.00 per share.  The terms of such Placement and the Securities
shall be mutually agreed upon by the Company and the purchasers (each, a
“Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes
that Rodman would have the power or authority to bind the Company or any
Purchaser or an obligation for the Company to issue any Securities or complete
the Placement.  This Agreement and the documents executed and delivered by the
Company and the Purchasers in connection with the Placement shall be
collectively referred to herein as the “Transaction Documents.”  The date of the
closing of the Placement shall be referred to herein as the “Closing Date.”  The
Company expressly acknowledges and agrees that Rodman’s obligations hereunder
are on a reasonable best efforts basis only and that the execution of this
Agreement does not constitute a commitment by Rodman to purchase the Securities
and does not ensure the successful placement of the Securities or any portion
thereof or the success of Rodman with respect to securing any other financing on
behalf of the Company.

SECTION 1.   COMPENSATION AND OTHER FEES.

As compensation for the services provided by Rodman hereunder, the Company
agrees to pay to Rodman:

(A)  The fees set forth below with respect to the Placement:
 
 
Rodman & Renshaw, LLC o 1251 Avenue of the Americas, 20th Floor, New York, NY
10020
Tel: 212 356 0500 o Fax: 212 581 5690 o www.rodm.como Member: FINRA, SIPC
 
 
 
 

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1.  
A cash fee payable immediately upon the closing of the Placement and equal to 6%
of the aggregate gross proceeds raised in the Placement.  The Placement Agent’s
fee shall be paid at the closing of the Offering from the gross proceeds of the
Securities sold.

 
2.  Such number of warrants (the “Rodman Warrants”) to Rodman or its designees
at the Closing to purchase shares of Common Stock equal to 3% of the aggregate
number of Shares sold in the Placement, plus any Shares underlying any
convertible Securities sold in the Placement.  The Rodman Warrants shall have
the same terms as the warrants (if any) issued to the Purchasers in the
Placement except that the exercise price shall be 125% of the public offering
price per share and the expiration date shall be five years from the effective
date of the shelf registration statement referred to in Section 2(A) below.  The
Rodman Warrants shall not have antidilution protections or be transferable for
six months from the date of the Offering except as permitted by Financial
Industry Regulatory Authority (“FINRA”) Rule 5110, and further, the number of
Shares underlying the Rodman Warrants shall be reduced if necessary to comply
with FINRA rules or regulations.

 
(B)  Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also
agrees to reimburse Rodman’s out-of-pocket accountable expenses actually
incurred by Rodman or persons associated with Rodman (with supporting
invoices/receipts) up to a maximum of 0.8% of the aggregate gross proceeds
raised in the placement, but in no event more than $25,000.  Such reimbursement
shall be payable immediately upon (but only in the event of) the closing of the
Placement.

SECTION 2.  REGISTRATION STATEMENT.

The Company represents and warrants to, and agrees with, the Placement Agent
that:
 
       (A)  The Company has filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-3 (Registration File No.
333-163269) under the Securities Act of 1933, as amended (the “Securities Act”),
which became effective on February 3, 2010, for the registration under the
Securities Act of the Shares and Warrants.  At the time of such filing, the
Company met the requirements of Form S-3 under the Securities Act.  Such
registration statement meets the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complies with said Rule. The Company will file with
the Commission pursuant to Rule 424(b) under the Securities Act, and the rules
and regulations (the “Rules and Regulations”) of the Commission promulgated
thereunder, a supplement to the form of prospectus included in such registration
statement relating to the placement of the Shares and Warrants and the plan of
distribution thereof and has advised the Placement Agent of all further
information (financial and other) with respect to the Company required to be set
forth therein. Such registration statement, including the exhibits thereto, as
amended at the date of this Agreement, is hereinafter called the “Registration
Statement”; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus”; and the supplemented form
of prospectus, in the form in which it will be filed with the Commission
pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is
hereinafter called the “Prospectus Supplement.” Any reference in this Agreement
to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the documents incorporated by reference
therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be; and any reference
in this Agreement to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference. All references in this Agreement to financial
statements and schedules and other information that is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is or is deemed to
be incorporated by reference in the Registration Statement, the Base Prospectus
or the Prospectus Supplement, as the case may be.  No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or
the Prospectus Supplement has been issued, and no proceeding for any such
purpose is pending or has been initiated or, to the Company's knowledge, is
threatened by the Commission. For purposes of this Agreement, “Time of Sale
Prospectus” means the preliminary prospectus used in connection with the
Placement, including any documents incorporated by reference therein.
 
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       (B)  The Registration Statement (and any further documents to be filed
with the Commission) contains all exhibits and schedules as required by the
Securities Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective, complied in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations and did not and, as amended or supplemented, if applicable, will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and
the Prospectus Supplement, each as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, as amended or supplemented,
did not and will not contain as of the date thereof any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein (with respect to Incorporated Documents incorporated
by reference in the Base Prospectus or Prospectus Supplement), in light of the
circumstances under which they were made not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus, the
Time of Sale Prospectus, if any, or Prospectus Supplement, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations, as
applicable, and will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. No post-effective
amendment to the Registration Statement reflecting any facts or events arising
after the date thereof which represent, individually or in the aggregate, a
fundamental change in the information set forth therein is required to be filed
with the Commission.  There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that (x) have
not been filed as required pursuant to the Securities Act or (y) will not be
filed within the requisite time period. There are no contracts or other
documents required to be described in the Base Prospectus, the Time of Sale
Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, that have not been described or filed
as required.
 
(C)  The Company has delivered, or will as promptly as practicable deliver, to
the Placement Agent complete conformed copies of the Registration Statement and
of each consent and certificate of experts, as applicable, filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits),
the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement, as amended or supplemented, in such quantities and at such places as
the Placement Agent reasonably requests.  Neither the Company nor any of its
directors and officers has distributed and none of them will distribute, prior
to the Closing Date, any offering material in connection with the offering and
sale of the Shares and Warrants other than the Base Prospectus, the Time of Sale
Prospectus, if any, the Prospectus Supplement, the Registration Statement,
copies of the documents incorporated by reference therein and any other
materials permitted by the Securities Act.
 
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SECTION 3.  REPRESENTATIONS AND WARRANTIES.
 
(A) There are no affiliations with any FINRA member firm among the Company’s
officers, directors or, to the knowledge of the Company, any five percent (5%)
or greater stockholder of the Company, except as set forth in the Base
Prospectus.
 
(B) Except as otherwise provided in this Agreement, no brokerage or finder’s
fees or commissions are or will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the
Transaction Documents.
 
(C) Rodman shall be entitled to rely upon any and all representations and
warranties of the Company included in the purchase agreements entered into by
the Company and the Purchasers in connection with the Placement, subject to the
qualifications and limitations therein.
 
SECTION 4.  ENGAGEMENT TERM.  Rodman's engagement hereunder will be for the
period of 15 days from the date hereof.  The engagement may be terminated by
either the Company or Rodman at any time upon 2 days' written notice.
Notwithstanding anything to the contrary contained herein, the provisions in
this Agreement concerning confidentiality, indemnification and contribution will
survive any expiration or termination of this Agreement.  Upon any termination
of this Agreement, the Company's obligation to pay Rodman any fees actually
earned on closing of the Offering and otherwise payable under Section 1(A),
shall survive any expiration or termination of this Agreement, as permitted by
FINRA Rule 5110(f)(2)(d).  Upon any termination of this Agreement, the Company's
obligation to reimburse Rodman for out of pocket accountable expenses actually
incurred by Rodman and reimbursable upon closing of the Offering pursuant to
Section 1(B), if any are otherwise due under Section 1(B) hereof, will survive
any expiration or termination of this Agreement, as permitted by FINRA Rule
5110(f)(2)(d).

SECTION 5.  RODMAN INFORMATION.  The Company agrees that any information or
advice rendered by Rodman in connection with this engagement is for the
confidential use of the Company only in their evaluation of the Placement and,
except as otherwise required by law, the Company will not disclose or otherwise
refer to the advice or information in any manner without Rodman’s prior written
consent.

SECTION 6.   NO FIDUCIARY RELATIONSHIP.  This Agreement does not create, and
shall not be construed as creating rights enforceable by any person or entity
not a party hereto, except those entitled hereto by virtue of the
indemnification provisions hereof.  The Company acknowledges and agrees that
Rodman is not and shall not be construed as a fiduciary of the Company and shall
have no duties or liabilities to the equity holders or the creditors of the
Company or any other person by virtue of this Agreement or the retention of
Rodman hereunder, all of which are hereby expressly waived.

SECTION 7.   CLOSING.   The obligations of the Placement Agent and the
Purchasers, and the closing of the sale of the Securities hereunder are subject
to the accuracy, when made and on the Closing Date, of the representations and
warranties on the part of the Company and its Subsidiaries contained herein, to
the accuracy of the statements of the Company and its Subsidiaries made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and its Subsidiaries of their obligations hereunder, and to each of the
following additional terms and conditions:
 
(A)  No stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the Registration
Statement, the Base Prospectus or the Prospectus Supplement or otherwise) shall
have been complied with to the reasonable satisfaction of the Placement Agent.

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(B)  The Placement Agent shall not have discovered and disclosed to the Company
on or prior to the Closing Date that the Registration Statement, the Base
Prospectus or the Prospectus Supplement or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel for the
Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
 
(C)  All corporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this Agreement,
the Securities, the Registration Statement, the Base Prospectus and the
Prospectus Supplement and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
 
(D)  The Placement Agent shall have received from outside counsel to the Company
such counsel’s written opinion, addressed to the Placement Agent and the
Purchasers dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.
 
(E)  Neither the Company nor any of its Subsidiaries shall have sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Base Prospectus, any loss or interference with its business
from fire, explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth in or contemplated by the Base
Prospectus and (ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position, stockholders’ equity,
results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement.
 
(F)  The Common Stock is registered under the Exchange Act and, as of the
Closing Date, the Shares and shares underlying the Warrants shall be listed and
admitted and authorized for trading on the Trading Market, and satisfactory
evidence of such actions shall have been provided to the Placement Agent.  The
Company shall have taken no action designed to, or likely to have the effect of
terminating the registration of the Common Stock under the Exchange Act or
delisting or suspending from trading the Common Stock from the Trading Market,
nor has the Company received any information suggesting that the Commission or
the Trading Market is contemplating terminating such registration or listing.
 
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(G)  Subsequent to the execution and delivery of this Agreement, there shall not
have occurred any of the following: (i) trading in securities generally on the
New York Stock Exchange, the Nasdaq National Market or the NYSE Amex or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by federal or state authorities or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, (iii) the United States shall have
become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities
involving the United States, or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have
occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the
effect of any such event in clause (iii) or (iv) makes it, in the reasonable
judgment of the Placement Agent, impracticable or inadvisable to proceed with
the sale or delivery of the Securities on the terms and in the manner
contemplated by the Base Prospectus and the Prospectus Supplement.
 
(H)  No action shall have been taken and no statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body
which would, as of the Closing Date, prevent the issuance or sale of the
Securities or materially and adversely affect or potentially and adversely
affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities or materially and adversely affect or
potentially and adversely affect the business or operations of the Company.
 
(I)  The Company shall have prepared and filed with the Commission a Current
Report on Form 8-K with respect to the Placement, including as an exhibit
thereto this Agreement.
 
(J)  The Company shall have entered into subscription agreements with each of
the Purchasers and such agreements shall be in full force and effect and shall
contain representations and warranties of the Company as agreed between the
Company and the Purchasers.
 
(K)  FINRA shall have raised no objection to the fairness and reasonableness of
the terms and arrangements of this Agreement.  In addition, the Company shall,
if requested by the Placement Agent, make or authorize Placement Agent’s counsel
to make on the Company’s behalf, an Issuer Filing with FINRA pursuant to FINRA
Rule 5110 with respect to the Registration Statement and pay all filing fees
required in connection therewith.
  
(L)  Prior to the Closing Date, the Company shall have furnished to the
Placement Agent such further information, certificates and documents as the
Placement Agent may reasonably request
 
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.
 
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SECTION 8.   INDEMNIFICATION.                                           
 
        (A)  To the extent permitted by law, the Company will indemnify Rodman
and its affiliates, stockholders, directors, officers, employees and controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) against all losses, claims, damages, expenses and liabilities,
as the same are incurred (including the reasonable fees and expenses of
counsel), relating to or arising out of its activities hereunder or pursuant to
this engagement letter, except to the extent that any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted primarily
and directly from Rodman’s willful misconduct or gross negligence in performing
the services described herein.

(B)  Promptly after receipt by Rodman of notice of any claim or the commencement
of any action or proceeding with respect to which Rodman is entitled to
indemnity hereunder, Rodman will notify the Company in writing of such claim or
of the commencement of such action or proceeding, and the Company will assume
the defense of such action or proceeding and will employ counsel reasonably
satisfactory to Rodman and will pay the fees and expenses of such
counsel.  Notwithstanding the preceding sentence, Rodman will be entitled to
employ counsel separate from counsel for the Company and from any other party in
such action if counsel for Rodman reasonably determines that it would be
inappropriate under the applicable rules of professional responsibility for the
same counsel to represent both the Company and Rodman.  In such event, the
reasonable fees and disbursements of no more than one such separate counsel will
be paid by the Company.  The Company will have the exclusive right to settle the
claim or proceeding provided that the Company will not settle any such claim,
action or proceeding without the prior written consent of Rodman, which will not
be unreasonably withheld.

(C)  The Company agrees to notify Rodman promptly of the assertion against it or
any other person of any claim or the commencement of any action or proceeding
relating to a transaction contemplated by this engagement letter.

(D)  If for any reason the foregoing indemnity is unavailable to Rodman or
insufficient to hold Rodman harmless, then the Company shall contribute to the
amount paid or payable by Rodman as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and Rodman on the
other, but also the relative fault of the Company on the one hand and Rodman on
the other that resulted in such losses, claims, damages or liabilities, as well
as any relevant equitable considerations.  The amounts paid or payable by a
party in respect of losses, claims, damages and liabilities referred to above
shall be deemed to include any legal or other fees and expenses incurred in
defending any litigation, proceeding or other action or claim.  Notwithstanding
the provisions hereof, Rodman’s share of the liability hereunder shall not be in
excess of the amount of fees actually received, or to be received, by Rodman
under this engagement letter (excluding any amounts received as reimbursement of
expenses incurred by Rodman).

(E)  These indemnification provisions shall remain in full force and effect
whether or not the transaction contemplated by this engagement letter is
completed and shall survive the termination of this engagement letter, and shall
be in addition to any liability that the Company might otherwise have to any
indemnified party under this engagement letter or otherwise.

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SECTION 9.   GOVERNING LAW.  This Agreement will be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made and to be performed entirely in such State.  This Agreement may not be
assigned by either party without the prior written consent of the other
party.  This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns. Any right
to trial by jury with respect to any dispute arising under this Agreement or any
transaction or conduct in connection herewith is waived.  Any dispute arising
under this Agreement may be brought into the courts of the State of New York or
into the Federal Court located in New York, New York and, by execution and
delivery of this Agreement, the Company hereby accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of aforesaid
courts.  Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
delivering a copy thereof via overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process
and notice thereof.  Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. If either party
shall commence an action or proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

SECTION 10.   ENTIRE AGREEMENT/MISC.  This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof.  If any
provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect
or any other provision of this Agreement, which will remain in full force and
effect.  This Agreement may not be amended or otherwise modified or waived
except by an instrument in writing signed by both Rodman and the Company.  The
representations, warranties, agreements and covenants contained herein shall
survive the closing of the Placement and delivery and/or exercise of the
Securities, as applicable.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or a .pdf format file, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile
or .pdf signature page were an original thereof.

SECTION 11.   NOTICES.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified on the signature pages attached hereto prior to 6:30
p.m. (New York City time) on a business day, (b) the next business day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number on the signature pages attached hereto on a day that is
not a business day or later than 6:30 p.m. (New York City time) on any business
day, (c) the business day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given.  The address for such
notices and communications shall be as set forth on the signature pages hereto.

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Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to Rodman a copy of this Agreement.

 
Very truly yours,
 
RODMAN & RENSHAW, LLC
 
By: /s/ John Borer                                                      
       Name: John Borer
      Title:  Senior Managing Director
 
Address for notice:
1251 Avenue of the Americas, 20th Floor
New York, NY, 10020
Fax (646) 841-1640
Attention:  General Counsel

 
Accepted and Agreed to as of
the date first written above:

PACIFIC ASIA PETROLEUM, INC.

By: /s/ Frank C.
Ingriselli                                                                
       Name:  Frank C. Ingriselli
       Title:  President and Chief Executive Officer
 
Address for notice:
250 East Hartsdale Ave.
Hartsdale, NY 10530
Fax: (914) 472-6793
Attention:  President and Chief Executive Officer

 
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