China Valves Technology, Inc. - Exhibit 10.2 - Prepared By TNT Filings
   Inc.










Exhibit 10.2

 

December 24, 2009 

CONFIDENTIAL 

China Valves Technology, Inc. 
Attn: Mr. Siping Fang,
Chairman and C.E.O. 

Dear Mr. Fang: 

This letter (the
“Agreement”) constitutes the agreement between Rodman & Renshaw, LLC
(“Rodman” or the “Placement Agent”) and China Valves Technology,
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 333,334 shares (the
“Shares”) of the Company’s common stock, par value $0.001 per share (the
“Common Stock” at a price of $9.00 per Share for aggregate gross proceeds
to the Company of approximately $3,000,000 along with a short term 30-day common
stock purchase warrants (“Warrants”) to purchase up to, in the aggregate,
an additional $450,000 of Common Stock at a price of $9.00. 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 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 cash fee payable immediately
upon the closing of the Placement and equal to 5.0% of the aggregate gross
proceeds raised in the Placement.

SECTION 2. REGISTRATION STATEMENT.

The Company represents and warrants to, and agrees with, the
Placement Agent that: 

Rodman & Renshaw, LLC - 1251 Avenue of the Americas,
20th Floor, New York, NY 10020 
Tel: 212 356
0500 - Fax: 212 581 5690 - www.rodm.com - Member: FINRA, SIPC 




(A) The Company has filed with
the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (Registration File No. 333-163418) under the Securities
Act of 1933, as amended (the “Securities Act”), which became effective on
December 14, 2009, 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 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) [Intentionally Omitted.] 

(D) 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.

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. 

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(B) 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 4 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, shall survive any expiration or termination of this Agreement.

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
applicable 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.

(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. 

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(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) 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. 

(E) 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. 

(F) 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. 

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(G) 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. 

(H) 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. 

(I) 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.


(J) 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.

(K) Prior to the applicable
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 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. 

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. 

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(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. 

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. 

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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/ Edward Rubin 
	 	Name: Edward Rubin 
	 	Title: CEO 
	 	  
	 	Address for notice: 
	 	1251 Avenue of the Americas, 20th Floor
    
	 	New York, NY, 10020 
	 	Fax (646) 841-1640 
	 	Attention: General Counsel 
	 	  
	 	  
	 	  
	 	


[Company Signature Page is to Follow] 

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[Company signature page to Rodman Engagement Letter] 

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

CHINA VALVES TECHNOLOGY, INC. 

By: /s/ Siping Fang

       Name: Siping Fang

       Title: CEO 

Address for notice: 

No. 93 West Xinsong Road 
Kaifeng, Henan 475002, China 

With a copy to (which shall not constitute notice): 

Pillsbury Winthrop Shaw Pittman LLP 
Attention: Louis A.
Bevilacqua, Esq. 
2300 N Street, N.W. 
Washington, DC 20037-1122 
Fax:
202.663.8007 

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