ENTRUSTED MANAGEMENT AGREEMENT BETWEEN Hou Renyi Liu Zhenyu Hou Longchao Hou Cijiu Yang Yang Ling Yong Ke Hongwei He Yue AND Wincroft, Inc. As of October 20, 2008
Exhibit 10.1
BETWEEN
Hou
Renyi
Liu
Xxxxxx
Xxx
Longchao
Hou
Cijiu
Xxxx
Xxxx
Ling
Xxxx
Xx
Xxxxxxx
Ke
Xxxxxxx
Xx
Xxx
Xx
Xxx
AND
Wincroft,
Inc.
As of
October 20, 2008
This
Entrusted Management Agreement (the "Agreement") is entered into as of the
20th
day of October, 2008 in Chengdu, Sichuan province, P. R. China,
by:
Party A
(collectively referred to herein as “Party A”):
1. Hou Renyi,
a citizen of
PRC
2. Xxx Xxxxxx,
a citizen of
PRC
3. Hou
Longchao a citizen
of PRC
4. Hou Cijiu
a citizen of
PRC
5. Xxxx Xxxx
a citizen of
PRC
6. Xxxx Xxxx
a citizen of
PRC
7. Xx Xxxxxxx
a citizen of
PRC
8. Xx Xxx
a citizen of
PRC
9. Ke Hongwei
a citizen of
PRC
10. He Yue
a citizen of
PRC
and
Party
B: Wincroft, Inc., a corporation formed under the
laws of the State of Nevada (“WCRF” or “Party B”, as the context
requires), which owns 100% of Apollo Solar Energy, Inc., a corporation organized
under the laws of the State of Delaware, United States (“ASE”), which owns 100%
of the equity of Sichuan Apollo Solar Science and Technology Co. Ltd.
(“Sichuan”), a wholly
foreign-owned enterprise (WOFE)
organized under the laws of the People’s Republic of China, with its registered
address at 00-0-0 Xxxxxxx Xxxx, Xxxxx Section, Shuangliu County, Xxxxxxx,
Xxxxxxx Xxxxxxxx, X. X. Xxxxx, 000000.
Party A
and Party B are collectively referred to herein as the “Parties”.
Whereas:
1.
Pursuant to that certain Merger Agreement dated October 14, 2008, by and among
Wincroft, Inc., a Nevada corporation (“WCRF”), Apollo Solar Energy, Inc., a
Delaware corporation and a wholly owned subsidiary of WCRF (the “Merger Sub”),
and ASE, ASE and Merger Sub combined into a single company through the statutory
merger of Merger Sub with and into ASE, with ASE as the surviving corporation,
and ASE became a wholly owned subsidiary of WCRF (the “Merger”).
2. Party
A is comprised of the management and technical experts of Sichuan with
expertise, experience and a reputation in the field of the Solar PV industry in
China.
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3. Party
B has very limited experience in the technological and managerial fields related
to Solar PV and other matters material to the management and operations of WCRF
and its affiliated parties, and desires Party A to have responsibility and
authority for the management of WCRF and its subsidiaries, and Party A is
willing to serve in that capacity for WCRF and its subsidiaries.
4. As
partial consideration for such services and in full satisfaction of certain
indebtedness of Sichuan to Party A, Party B agrees that 26.80 million shares of
Common Stock of WCRF shall be issued to Party A.
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein, the
parties agree as follows:
Article 1
Entrusted Management
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1.1
|
As
of and from the Effective Date (as defined below), Party B agrees that the
management of WRCF shall be entrusted to Party A pursuant to the terms and
conditions of this Agreement. Party A agrees to manage WRCF in accordance
with the terms and conditions of this
Agreement.
|
|
1.2
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Party
B agrees that 26.80 millions shares of Common Stock of WCRF, in the
aggregate, shall be issued and delivered to Party A as soon as reasonably
practicable following the date
hereof.
|
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1.3
|
Party
B agrees to pay regular cash compensation and to implement a stock
ownership incentive plan as further compensation for the management
services of Party A.
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（1） During the term
of this Agreement, the regular cash compensation of Party A will be paid in RMB
on a monthly basis.
（2） Party B shall
implement the stock ownership incentive plan according to the performance of
Party A.
（3） For the 3 year period
immediately following the date of this Agreement, if the annual return on equity
rate of WCRF is lower than 5%，Party A shall not
be entitled to the issuance of any WCRF Common Stock under the stock ownership
incentive plan with respect to such annual period, except with the consent of
Party B.
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1.4
|
The
term of this Entrusted Management Agreement shall be from the date of this
Agreement (the “Effective Date”) until the earlier to occur of the
following (the “Entrustment
Period”):
|
(1) the
winding up of WRCF;
(2) 15
years from the date hereof; or
2
(3) the
termination date of this Entrusted Management Agreement as determined by the
Parties hereto.
|
1.5
|
During
the Entrustment Period, Party A shall be fully responsible for the
day-to-day management of WRCF. Party A’s management services shall
include, without limitation, the following (except to the extent, if any,
provided by applicable
law):
|
(1) Party
A shall be responsible for the operation of WRCF, which includes the right to
hire managerial and administrative personnel for WRCF and any of its
subsidiaries.
(2) Party
A shall administer the financial affairs and daily operations of WRCF and its
subsidiaries such as entering into and performing contracts and paying
taxes.
(3) Party
A shall have all other customary powers and duties associated with the
management authority and responsibilities contemplated hereby. Party A shall be
subject to WRCF’s policies, work rules, procedures, and approval practices, as
generally in effect from time to time for all employees of WCRF, to the extent
necessary and appropriate.
Article 2
Rights and Obligations of the Parties
2.1
During the Entrustment Period, Party B's rights and obligations shall include
the following:
(1) Party
B shall entrust the management of WRCF to Party A hereunder as of the Effective
Date and deliver or cause to be delivered to Party A the appropriate business
materials, business licenses and corporate seals of WRCF and its
subsidiaries;
(2) Party
B shall have the right to be advised of the business affairs of WRCF by Party A
at any time and to provide proposals with respect thereto;
(3) Party
B shall have the right to assist Party A in carrying out the management of WRCF
and its subsidiaries;
(4) Party
B shall not unreasonably and without cause intervene in Party A's management of
WRCF in any manner by making use of voting powers of shareholders of WRCF
(except to the extent, if any, required by applicable law);
(5) Party
B shall not terminate this Agreement unilaterally with or without cause;
and
(6) Party
B shall benefit from its other rights and perform its other obligations under
this Agreement.
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2.2
During the Entrustment Period, Party A's rights and obligations hereunder shall
include:
(1) Party
A shall have the right to appoint general managers, deputy general managers,
financial managers and other senior managerial personnel of WRCF;
(2) Party
A shall benefit from its other rights and perform its other obligations under
this Agreement.
(3) If the annual
return on equity rate is lower than 5%，Party A shall cut
the melon, except with the consent of Party B.
(4） The shares of
WRCF held by Party A shall not be transferred within 3 years after Party A
obtained the shares, except with the consent of Party B.
(5） After the
expiration of above mentioned lock-up period, Party A may transfer the shares of
WRCF held by Party A but shall not transfer in excess of 20% per year, except
with the consent of Party B.
(6) Party
A shall have all other customary powers and duties associated with the
management authority and responsibilities contemplated hereby.
Article 3
Representation and Warranties
Each of
the Parties hereto hereby represents and warrants to the other as of the date of
this Agreement that:
(1) such
Party has the right to enter into this Agreement and the ability to perform the
same;
(2) this
Agreement, upon execution, will constitute the binding and effective agreement
of such Party;
(3) the
execution of this Agreement, and performance of its obligations hereunder, by
such Party will not:
(a)
violate any provision of the business license, articles of association or other
similar documents of such Party;
(b)
violate any provision of the laws and regulations of the PRC or other
governmental or regulatory authority or approval;
(c)
violate or result in a breach of any contract or agreement to which such Party
is a party or by which it is bound.
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Article 4
Effectiveness
This
Agreement shall take effect after it is duly executed by the authorized
representatives of the parties hereto with signature.
Article 5
Term
Party A
promises that the term of the management services Party A
shall provide to WRCF hereunder shall be 15 years.
Article 6
Liability for Breach of Agreement
During
the Entrustment Period, any violation of any provisions herein by either Party
constitutes breach of contract and the breaching Party shall compensate the
non-breaching Party for the loss incurred as a result of this
breach.
Article 7
Force Majeure
The
failure of either Party to perform all or part of its obligations under the
Agreement due to force majeure shall not be deemed a breach of contract. The
affected Party shall present promptly valid evidence of such force majeure, and
the failure of performance shall be settled through consultations between the
Parties hereto.
Article 8
Governing Law
The
construction, validity, interpretation, and performance of this Agreement and
the settlement of any disputes arising out of this Agreement shall be governed
by the laws and regulations of the People's Republic of China.
Article 9
Settlement of Dispute
Any
disputes under this Agreement shall be settled at first through friendly
consultation between the Parties hereto. In case no settlement can be reached
through consultation, each Party shall have the right to submit such disputes to
China International Economic and Trade Arbitration Commission. The place of
arbitration is Beijing. The final arbitration award rendered by such commission
shall be final and binding on both Parties.
Article
10 Confidentiality
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10.1 The
Parties hereto agree to cause their respective employees or representatives who
have access to and knowledge of the terms and conditions of this Agreement to
treat and hold confidential any of the terms and conditions of this Agreement
and not disclose the same to any third party unless (i) expressly required under
law, (ii) by request from judicial authorities or governmental departments, or
(iii) with the consent of the other Party.
10.2 The
obligations of confidentiality under Section 9.1 of this Article shall survive
after the termination of this Agreement.
Article
11 Severability
11.1 Any
provision of this Agreement that is invalid or unenforceable due to applicable
laws and regulations shall be ineffective without affecting in any way the
remaining provisions hereof.
11.2. In
the event of any invalidity or unenforceability of a provision hereof by virtue
of the foregoing paragraph, the Parties hereto shall enter into a supplemental
agreement reasonably designed to give effect, to the extent possible, to the
intentions of such provision as soon as possible through friendly
consultation.
Article
12 Non-waiver of Rights
12.1 Any
failure or delay by any Party in exercising its rights under this Agreement
shall not constitute a waiver of such right.
12.2 Any
failure of any Party to demand that the other Party perform its obligations
under this Agreement shall not be deemed as a waiver of its right to demand that
the other Party perform such obligations later.
12.3 If a
Party excuses the non-performance by the other Party of certain provisions under
this Agreement, such excuse shall not be deemed to excuse any future
non-performance by the other Party of the same, or any other,
provision.
Article
13 Non-transferability
Unless
otherwise specified under this Agreement, no Party can assign or delegate any of
its rights or obligations under this Agreement to any third party nor can it
provide any guarantee to such third party or carry out other similar activities
without the prior written consent from the other Party.
Article
14 Miscellaneous
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14.1 Any
and all taxes arising from execution and performance of this Agreement and
during the course of the entrusted management and operation shall be borne by
the Parties respectively pursuant to the provisions of applicable laws and
regulations.
14.2 Any
written amendment entered into by the Parties hereto after the effectiveness of
this Agreement shall be an integral part of this Agreement and have the same
legal effect as part of this Agreement. In case of any discrepancy between any
such amendment and this Agreement, the amendment shall prevail. In case of
several amendments, the amendment with the latest date shall
prevail.
14.3 This
Agreement is executed by Chinese and English in duplicate, and in case of any
conflict the English version shall prevail. Each of the original Chinese and
English versions of this Agreement shall be executed in 6 copies. Each party
shall hold two originals of each version, and the rest shall be used for
governmental registration or other necessary approval purposes.
14.4 In
witness hereof, the Agreement is duly executed by the Parties hereto as of the
date first written above.
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(Page of
signature, no text)
Party
A:
/s/ Hou
Renyi
Hou Renyi
(signature)
/S/ Xxx
Xxxxxx
Xxx
Xxxxxx (signature)
/s/ Hou
Longchao
Hou
Longchao (signature)
/s Hou
Cijiu
Hou Cijiu
(signature)
/s/ Xxxx
Xxxx
Xxxx
Xxxx (signature)
/s/ Xxxx
Xxxx
Xxxx Xxxx
(signature)
/s/ Xx
Xxxxxxx
Xx
Xxxxxxx (signature)
/s/ Xx
Xxx
Xx
Xxx (signature)
/s/ Ke
Hongwei
Ke
Hongwei (signature)
/s/ He
Yue
He Yue
(signature)
8
Party
B:
/s/ Xiao Xxx
Xxxx
Name: Xiao
Xxx Xxxx
Title:
President
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