Document:

pdoss1a2ex1015.htm - Generated by SEC Publisher for SEC Filing

 

ADDENDUM

 

This Addendum (“Addendum”) to the Investment Agreement dated January 12, 2010 (the "Investment Agreement") between Dutchess Opportunity Fund, II, LP ("Dutchess") and Platinum Studios, Inc., (the "Company") is made this XXth day of March, 2010.

 

WHEREAS, it is in the best interest of both parties to facilitate (the "Facilitation") the amendments in connection with the Investment Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein and in reliance upon the representations and warranties contained herein, the parties hereto covenant and agree as follows:

 

1.                  Amendment to the Investment Agreement.  

 

a.       The Investment Agreement is hereby amended to DELETE in its entirety the definition of Purchase Price and contemporaneously the Investment Agreement is hereby amended to INSERT the following sentence as the amended definition of Purchase Price:

 

"Purchase Price" shall mean ninety-five percent (95%) of the lowest daily VWAP (as defined herein) during the Pricing Period. 

            

b.      The Investment Agreement is hereby amended to DELETE in its entirety the Section 3 (G) and contemporaneously the Investment Agreement is hereby amended to INSERT the following sentence as the amended Section 3 (G):

 

(G) INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration provisions of the 1933 Act (or pursuant to an exemption from such registration provisions). 

 

c.       The Investment Agreement is hereby amended to DELETE in its entirety the Section 4 (D) and contemporaneously the Investment Agreement is hereby amended to INSERT the following sentence as the amended Section 4 (D):

 

(D) ISSUANCE OF SHARES. The Company has reserved 41,000,000 Shares for issuance pursuant to this Agreement, which have been duly authorized and reserved for issuance (subject to adjustment pursuant to the Company's covenant set forth in Section 5(F) below) pursuant to this Agreement. Upon issuance in accordance with this Agreement, the Securities will be validly 
issued, fully paid for and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. In the event the Company cannot register a sufficient number of Shares for issuance pursuant to this Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of Shares required for the Company to perform its obligations hereunder as soon as reasonably practicable. 

 

 

 

 

 

Any such reference made in the Investment Agreement to Purchase Price or Put Amount shall refer to the amended sections, as described herein.

 

 

2.                  No other terms, rights or provisions of the Investment Agreement are or should be considered to have been modified by the terms of this Addendum and each party retains all other rights, obligations, privileges and duties contained in Investment Agreement that correspond respectively to the Investment Agreement including but not limited to the Registration Rights Agreement between the Company and Dutchess. 

 

 

 

Agreed and Accepted, and duly authorized to sign, on this XXth day of March, 2010 

 

By Dutchess:  ___________________________________________________

                                 Douglas H. Leighton, Managing Director

 

By Company: ___________________________________________________

                                  Scott Rosenberg, Chief Executive Officer

 

.Exhibit
10.1

      

       

      SECURITIES
PURCHASE AND

       

      REGISTRATION
RIGHTS AGREEMENT

       

      SECURITIES PURCHASE AND REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of May
3, 2010, by and among New Oriental Energy & Chemical Corp., a Delaware
corporation, with headquarters located at Xicheng Industrial Zone of Luoshan,
Xinyang Henan Province, The People’s Republic of China (the “Company”), and the investors
listed on the Schedule of Buyers attached hereto (each individually, a “Buyer” and collectively, the
“Buyers”).

       

      WHEREAS:

       

      A.           The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”)
under the 1933 Act.

       

      B.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, units (the “Units”), with each Unit
consisting of (i) one (1) share of common stock, par value $0.001 per share, of
the Company (the “Common
Stock”) and (ii) a warrant, in substantially the form attached hereto as
Exhibit A (the
“Warrant”), to purchase
one half of one (1⁄2) share of Common Stock (the “Warrant Shares”). The
aggregate amount of Units to be sold to all Buyers together shall be up to Two
Million Four Hundred Thousand (2,400,000) Units, with the Company reserving the
right to issue more Units in its sole discretion (the “Offering”).

       

      C.           The
Company has also agreed to provide certain registration rights with respect to
the Units under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

       

      D.           The
Common Stock, the Warrants, the Warrant Shares and the Units collectively are
referred to herein as the “Securities”.

       

      NOW, THEREFORE, the Company
and each Buyer, intending to be legally bound hereby, agree as
follows:

       

      
        	
                 
      

              	
                1.

              	
                PURCHASE AND SALE
      OF UNITS.

              

      

       

      (a)           Purchase of
Units.  Subject to the satisfaction (or waiver) of the
conditions set forth below, at the closing (the “Closing”), the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees
to purchase from the Company on the Closing Date (as defined below), the number
of Units as is set forth opposite such Buyer’s name on the Schedule of Buyers.
There is no minimum for the Closing and the Company reserves the right to
increase the size of the Offering.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)           Purchase
Price.  The purchase price for each Unit to be purchased by
each Buyer at the Closing shall be One Dollar and Twenty Five Cents ($1.25) (the
“Purchase
Price”).

       

      (c)           Closing.  The
Closing shall occur on a date and at a time (the “Closing Date”) as shall be
mutually agreed to by the Company and the Placement Agent (as defined below).
The Closing shall occur on the Closing Date at the offices of K&L Gates LLP,
599 Lexington Avenue, New York, New York 10022.

       

      (d)           Form of
Payment.  Each Buyer shall pay its respective Purchase Price
for the Units to be issued and sold to such Buyer at Closing by wire transfer of
immediately available funds to a separate escrow account maintained by K&L
Gates LLP (the “Escrow
Agent”). The Escrow Agent’s wiring instructions are attached hereto as
Exhibit B. Upon
fulfillment of the other conditions precedent set forth herein, the Escrow Agent
shall release certain funds from the Escrow Account and deliver such funds to
the Company on the Closing Date.  Within five (5) business days of the
Closing Date, the Company shall deliver to each Buyer (i) one (1) or more stock
certificates, free and clear of all restrictive and other legends (except as
expressly provided in Section 2(e) hereof), evidencing the number of shares of
Common Stock such Buyer is purchasing as is set forth opposite such Buyer’s name
on the Schedule of Buyers and (ii) a Warrant pursuant to which such Buyer shall
have the right to acquire such number of Warrant Shares as is set forth opposite
such Buyer’s name on the Schedule of Buyers, in all cases duly executed on
behalf of the Company and registered in the name of such Buyer.

       

      
        	
                 
      

              	
                2.

              	
                BUYER’S
      REPRESENTATIONS AND
WARRANTIES.

              

      

       

      Each
Buyer, individually and not jointly, represents and warrants as
follows:

       

      (a)           No Public Sale or
Distribution.  Such Buyer is acquiring the Securities in the
ordinary course of business for its own account and not with a view towards, or
for resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act and such Buyer does
not have a present arrangement to effect any distribution of the Securities to
or through any person or entity; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.  Such Buyer
is acquiring the Securities hereunder in the ordinary course of its
business.  Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind (a “Person”) to distribute any of
the Securities.

       

      (b)           Accredited Investor
Status.  Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (c)           Reliance on
Exemptions.  Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
the provinces of Canada, and that the Company is relying in part upon the truth
and accuracy of, and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of such Buyer to acquire the Securities.

       

      (d)           Information.  Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by such
Buyer.  Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company.  Neither such inquiries
nor any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities
involves a high degree of risk and is able to afford a complete loss of such
investment.  Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.

       

      (e)           Legends.  Such
Buyer understands that the certificates or other instruments representing the
Securities and, until such time as the resale of the Common Stock and the
Warrant Shares have been registered under the 1933 Act as contemplated herein,
the stock certificates representing the Common Stock and the Warrant Shares,
except as set forth below, shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock
certificates):

       

      THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE “RESTRICTED SECURITIES” AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT.  SUCH
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE
SATISFACTION OF COUNSEL TO THE ISSUER.

      

      (f)           Validity;
Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (g)           No
Conflicts.  The execution, delivery and performance by such
Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment  or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.

       

      (h)           Residency.  Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.

       

      
        	
                 
      

              	
                3.

              	
                REPRESENTATIONS AND
      WARRANTIES OF THE COMPANY.

              

      

       

      The
Company represents and warrants to each of the Buyers that:

       

      (a)           Organization.  The
Company is a corporation duly organized and validly existing in good standing
under the laws of the State of Delaware, and has the requisite corporate power
and authorization to own its properties and to carry on its business as now
being conducted.

       

      (b)           Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and
each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to
issue the Securities in accordance with the terms hereof and
thereof.  The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the Common
Stock and the Warrants and the reservation for issuance and the issuance of the
Warrant Shares issuable upon exercise of the Warrant have been duly authorized
by the Company’s Board of Directors and a majority of the Company’s
stockholders.  This Agreement and the other Transaction Documents have
been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

       

      (c)           Issuance of
Securities.  The Common Stock and the Warrants are duly
authorized and, upon issuance in accordance with the terms hereof, shall be
validly issued and free from all taxes, liens and charges with respect to the
issue thereof and the Common Stock shall be fully paid and nonassessable with
the holders being entitled to all rights accorded to a holder of Common Stock.
As of the Closing Date, the Company shall have duly authorized and reserved for
issuance a number of shares of Common Stock which equals the number of Warrant
Shares. Upon exercise in accordance with the Warrants, the Warrant Shares will
be validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock.  This Offering and
the issuance by the Company of the Securities is exempt from registration under
the 1933 Act.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (d)           No General Solicitation;
Placement Agent’s Fees.  Neither the Company, nor any of its
affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the
Securities.  The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other
than for Persons engaged by any Buyer or its investment advisor) relating to or
arising out of the transactions contemplated hereby.  The Company
shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, attorneys’ fees and out-of-pocket expenses)
arising in connection with any such claim.  The Company acknowledges
that it has engaged Internet Securities, Inc. as placement agent (the “Placement Agent”) in connection with the
sale of the Securities.  The Company will pay the Placement Agent an
amount equal to ten percent (10%) of the aggregate gross proceeds raised in the
Offering in cash and a five (5) year warrant to purchase ten percent (10%) of
the Securities sold in the Offering (the “Placement Agent Warrant”). The
Placement Agent Warrant shall have the same terms as the Warrant, except that
the exercise price of the Placement Agent Warrant shall be One Dollar and Twenty
Five Cents ($1.25). Other than the Placement Agent, the Company has not engaged
any placement agent or other agent in connection with the sale of the
Securities.

       

      (e)           No Integrated
Offering.  Neither the Company, its affiliates or any Person
acting on their behalf has, directly or indirectly, made any offers or sales of
any security or solicited any offers to buy any security, under circumstances
that would require registration of any of the Securities under the 1933 Act or
cause this offering of the Securities to be integrated with prior offerings by
the Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated.  Neither the Company, its affiliates
or any Person acting on their behalf will take any action or steps referred to
in the preceding sentence that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.

       

      (f)           Dilutive
Effect.  The Company understands and acknowledges that the
number of Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances.  The Company further acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants, in each case, is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company.

       

      (g)           Sarbanes-Oxley
Act.  The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (h)           Absence of
Litigation.  To the best of the Company’s knowledge, there is
no action, suit, proceeding, inquiry or investigation before or by NASDAQ (the
“Principal Market”), any
court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company, its Common Stock or any of the Company’s officers or directors, whether
of a civil or criminal nature or otherwise.

      (i)           Investment Company
Status.  The Company is not, and upon consummation of the sale
of the Securities will not be, an “investment company,” a company controlled by
an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company” as such terms are defined
in the Investment Company Act of 1940, as amended.

       

      (j)           No Additional
Agreements.  The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction
Documents.

       

      (k)           Disclosure.  The
Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their respective agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information.  The Company understands and confirms
that each of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company.  All disclosure provided to
the Buyers regarding the Company, its business and the transactions contemplated
hereby furnished by or on behalf of the Company are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.  No event or
circumstance has occurred or information exists with respect to the Company or
its business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed (assuming for this purpose that the Company’s reports filed under the
Exchange Act of 1934, as amended (the “1934 Act”), are being
incorporated into an effective registration statement filed by the Company under
the 1933 Act).  The Company acknowledges and agrees that no Buyer
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 4.

       

      
        	
                 
      

              	
                4.

              	
                COVENANTS.

              

      

       

      (a)           Best
Efforts.  Each party shall use its best efforts timely to
satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 5 and 6 of this Agreement.

       

      (b)           Form D and Blue
Sky.  The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing.  The Company, on or before the
Closing Date, shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for or to qualify the Securities
for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States and
the provinces of Canada (or to obtain an exemption from such qualification), and
shall provide evidence of any such action so taken to the Buyers on or prior to
the Closing Date.  The Company shall make all filings and reports
relating to the offer and sale of the Securities required under applicable
securities or “Blue Sky” laws of the states of the United States following the
Closing Date.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (c)           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes, including general and
administrative expenses.

       

      (d)           Filing of Registration
Statement.  On or prior to sixty (60) calendar days following
the Closing Date, and subject to the availability of Rule 415, the Company shall
use all reasonable efforts to prepare and file with the SEC a registration
statement covering the resale of the Securities for an offering to be made on a
continuous basis pursuant to Rule 415 (the “Registration Statement”). The
Registration Statement shall be on Form S-1 or S-3, as applicable, and shall be
modified by the Company as necessary to conform to comments from the SEC.
Subject to the terms of this Agreement, the Company shall use all reasonable
efforts to cause the Registration Statement to be declared effective under the
1933 Act as promptly as possible after the filing thereof (the “Effective Date”).

       

      (e)           Limits on
Registration.  In the event the number of shares available
under a Registration Statement filed pursuant to this Agreement is insufficient
to cover all of the Securities required to be covered by such Registration
Statement, the Company shall amend the applicable Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover all of the Securities.  The
Company shall use all reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof.

       

      (f)           Registration Statement
Expenses.  All expenses incurred in connection with the filing
of the Registration Statement, excluding any underwriters’ commissions, shall be
borne by the Company

       

      
        	
                 
      

              	
                5.

              	
                CONDITIONS TO THE
      COMPANY’S OBLIGATION TO
SELL.

              

      

       

      The
obligation of the Company hereunder to issue and sell the Securities to each
Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion by providing each Buyer with prior written notice
thereof:

       

      (a)           Such
Buyer shall have executed each of the Transaction Documents to which it is a
party and delivered the same to the Company.

       

      (b)           Such
Buyer shall have delivered to the Escrow Agent the Purchase Price for the Units
being purchased by such Buyer prior to the Closing.

       

      (c)           The
representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date which shall be true and correct as of such specified date), and
such Buyer shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by such Buyer at or prior to the Closing
Date.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                6.

              	
                CONDITIONS TO EACH
      BUYER’S OBLIGATION TO
PURCHASE.

              

      

       

      The
obligation of each Buyer hereunder to purchase the Securities is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for each Buyer’s sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the
Company with prior written notice thereof:

       

      (a)           The
Company shall have executed and delivered to such Buyer each of the Transaction
Documents.

       

      (b)           The
representations and warranties of the Company shall be true and correct as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date) and the Company shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing
Date.

       

      (c)           The
Company shall have received any necessary approvals and consents from the
Principal Market with respect to the sale of the Securities.

       

      
        	
                 
      

              	
                7.

              	
                DUTIES AND
      RESPONSIBILITIES OF ESCROW
AGENT.

              

      

       

      The
duties and obligations of the Escrow Agent are only those specifically set forth
in this Section and no other.  The Escrow Agent’s duties are
ministerial, and the Escrow Agent shall not incur any liability whatsoever for
any error of judgment, any mistake of fact or law or any act or omission of any
kind, so long as it has acted in good faith.

       

      (a)           Escrow
Account.  The Escrow Agent shall use its IOLA account, which is
a non-interest-bearing escrow account at the branch of a bank selected by the
Escrow Agent (the “Escrow
Account”).  The purpose of the Escrow Account is for (i) the
deposit of all subscription monies which are received from the Buyers and are
delivered to the Escrow Agent, (ii) the holding of amounts of subscription
monies which are collected through the banking system and (iii) the disbursement
of collected funds, all as described herein.

       

      (b)           Release of Funds in Escrow
Account.  Pursuant to written instructions from the Company,
the Escrow Agent shall release the net funds in the Escrow Account as directed
in such instructions. The Escrow Agent shall deduct from the Escrow Account and
pay directly the fees and expenses owed to the Placement Agent and all fees and
expenses owed to the Escrow Agent. The Escrow Agent shall reserve One Hundred
Fifty Thousand Dollars ($150,000) for the filing of the Registration Statement
and the preparation of on-going reports to be filed by the Company under the
1934 Act and as for these future fees and expenses, the Escrow Agent shall
deduct such amounts payable for such services from the Escrow Account
immediately upon the issuance of an invoice to the Company. In the event that
for any reason the Escrow Agent shall be uncertain as to its duties or rights
hereunder or shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions hereof, the Escrow
Agent shall be entitled, but not obligated, to refrain from taking any action,
and its sole obligation shall be to keep safely all funds, until it shall be
directed pursuant to written instructions of the Company or a final court order,
provided that, not withstanding the foregoing, at any time the Escrow Agent may
deposit any or all of the funds with any court of competent jurisdiction in
connection with an action in the nature of interpleader.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (c)           Validity of
Documents.  The Escrow Agent shall not have any responsibility
for the genuineness or validity of any document or other item deposited with it
or any liability for action in accordance with any written instructions or
notices or certificates given to it hereunder and believed by it to be signed by
the proper parties.

       

      (d)           Resignation of Escrow
Agent.  The Escrow Agent may at any time resign hereunder by
giving written notice of its resignation to the Company, at least five (5)
calendar days prior to the date specified for such resignation to take effect,
and upon the effective date of such resignation, all property then held by the
Escrow Agent hereunder shall be delivered by it to such attorney, or firm of
attorneys, or bank or trust company in New York City as may be agreed upon and
designated by the Company and Placement Agent in writing, whereupon all of the
Escrow Agent’s obligations hereunder shall cease and terminate.  If no
such person shall have been designated by such date, all obligations of the
Escrow Agent hereunder shall nevertheless cease and terminate.  The
Escrow Agent’s sole responsibility thereafter shall be to keep safely the funds
in the Escrow Account and deliver the same to such person designated as the
Escrow Agent shall be directed pursuant to written instructions of the parties
or a final court order, provided that, not withstanding the foregoing, at any
time the Escrow Agent may deposit any or all of the funds in the Escrow Account
with any court of competent jurisdiction in connection with an action in the
nature of interpleader.

       

      (e)           Indemnification of Escrow
Agent.  The Company shall indemnify, defend, and hold the
Escrow Agent and all of its partners and associates and other employees harmless
from and against any and all claims, losses, damages, taxes, liabilities, and
expenses whatsoever incurred or arising out of or in connection with the Escrow
Agent’s acceptance of appointment as Escrow Agent or its performance hereunder,
including, without limitation, any and all reasonable legal fees (including fees
for the time of its partners and associates and other employees and fees for any
other attorneys or their employees) and any other expenses incurred in
investigating, preparing for, defending against, or settling any commenced or
threatened legal proceeding or claim.

       

      (f)           Counsel to the
Company.  The Buyers acknowledge that the Escrow Agent is also
acting as counsel to the Company, and as a result, the Escrow Agent does not
take on any additional duties to the Buyers or possess any additional knowledge
from such role as counsel other than as specifically set forth in this
Agreement. In addition, the Buyers acknowledge that K&L Gates LLP can
represent the Company in connection with any dispute that may arise between the
Buyers and the Company.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                8.

              	
                MISCELLANEOUS.

              

      

       

      (a)           Governing Law; Jurisdiction;
Jury Trial.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such 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.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

       

      (b)           Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, except the Company has agreed to pay
the legal expenses of the Placement Agent up to Ten Thousand Dollars
($10,000).  The Company shall pay all transfer agent fees, stamp taxes
and other taxes and duties levied in connection with the delivery of any Common
Stock to the Buyers.

       

      (c)           Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

       

      (d)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

       

      (e)           Severability.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (f)           Entire Agreement;
Amendments.  This Agreement supersedes all other prior oral or
written agreements between the Buyers, the Company, their affiliates and Persons
acting on their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters.  No provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the holders of Common
Stock representing at least a majority of the amount of the Common Stock, or, if
prior to the Closing Date, the Buyers listed on the Schedule of Buyers as being
obligated to purchase at least a majority of the amount of the Common
Stock.  No provision hereof may be waived other than by an instrument
in writing signed by the party against whom enforcement is sought.  No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Common Stock then outstanding.  No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Common Stock or holders of the Warrants, as the case may
be.  The Company has not, directly or indirectly, made any agreements
with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.  Without limiting the foregoing, the Company confirms that,
except as set forth in this Agreement, no Buyer has made any commitment or
promise or has any other obligation to provide any financing to the Company or
otherwise.

       

      (g)           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) business day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

       

      If to the
Company:

       

      New
Oriental Energy & Chemical Corp.

      Xicheng
Industrial Zone of Luoshan

      Xinyang
Henan Province, The People’s Republic of China

      
        
          	
                	
                  Telephone: 

                	
                  (86)
      27 853 75701

                

        

      

      
        	
              	
                Facsimile: 

              	
                (86)
      10 6709 2670

              
	 	
                Attention:        

              	Chen
      Si Qiang, Chief Executive Officer

      

       

      
        	
                 
      

              	
                With
      a copy (for informational purposes only)
to:

              

      

      

      K&L
Gates LLP

      599
Lexington Avenue

      New York,
New York 10022

      
        	
              	
                Telephone: 

              	
                (212)
      536-3900

              
	 	
                Facsimile:

              	(212)
      536-3901
	 	
                Attention:

              	Robert
      S. Matlin, Esq.

      

      
         

        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer’s representatives as set forth on the Schedule of
Buyers, or to such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

       

      (h)           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Common Stock or the Warrants.  The Company shall
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the holders of Common Stock representing at least a
majority of the number of the Common Stock, including by merger or
consolidation.  A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights.

       

      (i)           No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

       

      (j)           Survival.  The
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the covenants set forth in Section 4 shall survive the
Closing and the delivery and exercise of Securities, as
applicable.  Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

       

      (k)           Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

       

      (l)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

       

      (m)           Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (n)           Independent Nature of
Buyers’ Obligations and Rights.  The obligations of each Buyer
under any Transaction Document are several and not joint with the obligations of
any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under any Transaction
Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents.  Each Buyer confirms that it has independently participated
in the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors.  Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose.

       

      [Signature
Page Follows]

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, each Buyer
and the Company have caused its respective signature page to this Agreement to
be duly executed as of the date first written above.

       

      
        
          	 	COMPANY:	 
	 	 	 
	 	NEW ORIENTAL ENERGY &
      CHEMICAL CORP.	 
	 	 	 	 
	 	
                  By:
      

                	/s/
      Chen Si Qiang	 
	 	 	Name:
      Chen Si Qiang	 
	 	 	
                  Title:   Chairman
      and CEO

                	 
	 	 	 	 

        

      

       

      
        
          
          

        

        
          
            [Signature
Page to Securities Purchase and Registration Rights
Agreement]

          

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Agreement to
be duly executed as of the date first written above.

       

      
        
          	 	[BUYER]:	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

        

      

       

      
        
          
          

        

        
          
            [Signature
Page to Securities Purchase and Registration Rights
Agreement]

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