ENTRUSTED MANAGEMENT AGREEMENT BETWEEN WANG XINSHUN WANG XINMING CHENG JUNSHENG HENAN SHUNCHENG GROUP COAL COKE CO., LTD. AND ANYANG SHUNCHENG ENERGY TECHNOLOGY CO., LTD. Anyang China
Exhibit
10.2
BETWEEN
WANG
XXXXXXX
XXXX
XXXXXXX
XXXXX
JUNSHENG
HENAN
SHUNCHENG GROUP COAL COKE CO., LTD.
AND
ANYANG
SHUNCHENG ENERGY TECHNOLOGY CO., LTD.
Anyang China
This
Entrusted Management Agreement (the “Agreement”) is entered into on
March 19, 2010, in Anyang, China by:
Party A:
1 Wang
Xinshun, a citizen of PRC with ID Card number of , owns 60% shares of Henan
Shuncheng Group Coal Coke Co., Ltd. ;
2 Xxxx
Xxxxxxx, a citizen of PRC with ID Card number of , owns 20% shares of Henan
Shuncheng Group Coal Coke Co., Ltd. ;
3 Xxxxx
Xxxxxxxx, a citizen of PRC with ID Card number of , owns 20% shares of Henan
Shuncheng Group Coal Coke Co., Ltd. ;
4 Henan
Shuncheng Group Coal Coke Co., Ltd. is an enterprise incorporated and existing
within the territory of China in accordance with the law of the People’s
Republic of China, the registration number of its legal and valid Business
License is 410522110001012 and the legal registered address is South Gongye Road, Tongye
County, Anyang City, Henan Province.
and
Party
B:
Anyang
Shuncheng Energy Technology Co., Ltd., is a wholly-foreign owned enterprise in
PRC, and the registration number of its legal and valid Business License is
410500400000623 and its
legal address is Tongye Town, Anyang County.
Whereas:
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1
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Party
A constitutes Henan Shuncheng Group Coal Coke Co.,
Ltd. (hereinafter referred to as “Opco ”) and all of its
shareholders holding all issued and outstanding shares of Opco . Under
this Agreement, Opco, Wang Xinshun, Xxxx Xxxxxxx and Xxxxx Xxxxxxxx have
acted collectively as one party to this
Agreement;
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2
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Anyang
Shuncheng Energy Technology Co., Ltd. (hereinafter referred to as “Party B”) is a
wholly-foreign owned enterprise incorporated and existing within the
territory of China in accordance with the law of the People’s Republic of
China, the registration number of its legal and valid Business License is
410500400000623,
and the legal registered address is Tongye Town, Anyang
County.
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3
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Party
A desires to entrust Party B to manage and operate Opco
;
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4
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Party
B agrees to accept such entrustment and to manage Opco on behalf of Party
A.
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Therefore,
in accordance with laws and regulations of the People’s Republic of China, the
Parties agree as follows after friendly consultation based on the principle of
equality and mutual benefit.
Article
1
Entrusted Management
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1.1
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Party
A agrees to entrust the management of Opco to Party B pursuant to the
terms and conditions of this Agreement. Party B agrees to manage Opco in
accordance with the terms and conditions of this
Agreement.
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1.2
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The
term of this Entrusted Management Agreement (the “Entrusted Period”) shall
be from the effective date of this Agreement to the earlier of the
following:
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(1) the
winding up of Opco, or
(2) the
date on which Party B completes the acquisition of Opco.
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1.3 During
the Entrusted Period, Party B shall be fully and exclusively responsible
for the management of Opco. The management service includes without
limitation the following:
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(1)
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Party
B shall be fully and exclusively responsible for the operation of Opco,
which includes the right to appoint and terminate members of Board of
Directors and the right to hire managerial and administrative personnel
etc. Party A or its voting proxy shall make a shareholder’s resolution and
a Board of Directors’ resolution based on the decision of Party
B.
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(2)
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Party
B has the full and exclusive right to manage and control all cash flow and
assets of Party A. Opco shall open one or more entrusted accounts and/or
designate one or more existing account as entrusted accounts
(collectively, the “Entrusted Accounts”).
Party B has the full and exclusive right to decide the use of the funds in
the Entrusted Accounts. The authorized signature of the Entrusted Accounts
shall be appointed or confirmed by Party B. All of the funds of Opco shall
be kept in the Entrusted Accounts, including but not limited to its
existing working capital and purchase price received from selling its
production equipment, inventory, raw materials and accounts receivable to
Party B (if any), all payments of funds shall be disbursed through the
Entrusted Accounts, including but not limited to the payment of all
existing accounts payable and operating expenses, payment of employees
salaries and purchase of assets, and all revenues from its operation shall
be kept in the Entrusted Accounts.
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(3)
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Party
B shall have the full and exclusive right to control and administrate the
financial affairs and daily operation of Opco, such as entering into and
performance of contracts, and payment of taxes
etc.
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1.4
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Subject
to anything to the contrary stated herein, in consideration of the
services provided by Party B hereunder, Party A shall pay an entrusted
management fee to Party B which shall be equal to the quarterly earnings
before tax (if any) of Opco. The entrusted management fee shall be as
follows: during the term of this agreement, the entrusted management fee
shall be equal to Opco’s estimated earnings before tax, being the
quarterly revenues after deduction of operating costs, expenses and taxes
other than income tax. If the quarterly earnings before tax is zero, Opco
is not required to pay the quarterly entrusted management fee; if Opco
sustains losses, all such losses will be carried over to next quarter and
deducted from next quarter’s entrusted management fee. Both Parties shall
calculate, and Party A shall pay, the quarterly entrusted management fee
within 45 days of end of the preceding quarter. The above quarterly
payment shall be adjusted prior to the filing of Opco’s tax return for
such quarter (the “Quarterly Adjustment”), so as to make the after-tax
profit of Opco of that quarter zero. In addition, the above monthly
payment shall be adjusted after the end of each fiscal year but before the
filing for the yearly tax return (the “Annual Adjustment”), so as to make
the after-tax profit of Opco of that fiscal year
zero.
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1.5
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Party
B shall assume all operation risks out of the entrusted management of Opco
and bear all losses of Opco. If Opco has no sufficient funds to repay its
debts, Party B is responsible for paying off these debts on behalf of
Opco; if Opco’s net assets are lower than its registered capital, Party B
is responsible for funding the
deficit.
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Article
2 Rights
and Obligations of the Parties
2.1 During
the term of this Agreement, Party A’s rights and obligations
include:
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(1)
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to
hand over Opco to Party B for entrusted management as of the effectiveness
date of this Agreement and to make all of business materials together with
Business License and corporate seal of Opco available to Party
B;
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(2)
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Party
A has no right to make any decision regarding Opco’s operations without
the prior written consent of Party
B;
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(3)
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to
have the right to know the business conditions of Opco at any time and
provide proposals;
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(4)
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to
assist Party B in carrying out the entrusted management in accordance with
Party B’s requirement;
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(5)
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to
perform its obligations pursuant to the Shareholders’ Voting Rights Proxy
Agreement, signed by and between Wang Xinshun, Xxxx Xxxxxxx and Xxxxx
Xxxxxxxx and Party B on March 19, 2010 in Anyang, and not to violate the
said agreement;
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(6)
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not
to intervene Party B’s management over Opco in any form by making use of
shareholder’s power;
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(7)
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not
to entrust or grant their shareholders’ rights in Opco to a third party
other than Party B without Party B’s prior written
consent;
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(8)
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not
to otherwise entrust other third party other than Party B to manage Opco
in any form without Party B’s prior written
consent;
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(9)
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not
to terminate this Agreement unilaterally with for any reason whatsoever;
or
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(10)
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to
enjoy other rights and perform other obligations under the
Agreement.
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2.2 During
the term of this Agreement, Party B’s rights and obligations
include:
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(1)
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to
enjoy the full and exclusive right to manage Opco
independently;
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(2)
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to
enjoy the full and exclusive right to dispose of all assets of
Opco;
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(3)
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to
enjoy all profits and bear losses arising from Opco’s operations during
the Entrusted Period;
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(4)
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to
appoint all directors of Opco;
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(5)
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to
appoint the legal representative, general manager, deputy general manager,
financial manager and other senior managerial personnel of
Opco;
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(6)
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to
convene shareholders’ meetings of Opco in accordance with the
Shareholders’ Voting Rights Proxy Agreement and sign resolutions of
shareholders’ meetings; and
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(7)
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to
enjoy other rights and perform other obligations under the
Agreement.
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Article
3 Representations
and Warranties
The Parties hereto hereby make the
following representations
and warranties to each
other as of the date of this Agreement that:
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(1)
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has the right to enter into the
Agreement and the ability to perform the
same;
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(2)
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the execution and delivery
of this Agreement by
each party have been duly authorized by all necessary corporate
action;
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(3)
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the execution of this Agreement by
the officer or representative of each party has been duly
authorized；
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(4)
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each party has no other reasons
that will prevent this Agreement from becoming a binding and effective
agreement between both parties after
execution;
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(5)
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the execution and performance of
the obligations under this Agreement will
not:
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(a) violate any provision of the business license,
articles of association or other similar documents of its
own;
(b) violate any provision of the laws and
regulations of PRC or other governmental or regulatory authority or
approval;
(c) violate or result in a breach of any
contract or agreement to
which the party is a party or by which it is bound.
Article
4 Effectiveness
This Agreement shall take effect after
it is duly executed
by the authorized
representatives of the parties hereto with seals affixed, provided, however, the entrusted management fees payable
by Party A under Section 1.4 shall accrue until such times as the parties shall
mutually agree..
Article
5 Liability for Breach of Agreement
During the term of this Agreement, 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.
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Article
6 Force Majeure
The failure of either party to perform
all or part of the obligations under the Agreement due to force
majeure shall not be deemed as 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
7 Governing Law
The conclusion, 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
8 Settlement of Dispute
Any disputes under the 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 in
Beijing. The
Place of arbitration is Beijing. The arbitration award shall be final
and binding on both parties.
Article
9 Confidentiality
9.1 The
parties hereto agree to cause its employees or representatives who has access to
and knowledge of the terms and conditions of this Agreement to keep strict
confidentiality and not to disclose any of these terms and conditions to any
third party without the expressive requirements under law or request from
judicial authorities or governmental departments or the consent of the other
party, otherwise such party or personnel shall assume corresponding legal
liabilities.
9.2 The
obligations of confidentiality under Section 1 of this Article shall survive
after the termination of this Agreement.
Article
10 Severability
10.1 Any
provision of this Agreement that is invalid or unenforceable due to the laws and
regulations shall be ineffective without affecting in any way the remaining
provisions hereof.
10.2. In
the event of the foregoing paragraph, the parties hereto shall prepare
supplemental agreement as soon as possible to replace the invalid provision
through friendly consultation.
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Article
11 Non-waiver of Rights
11.1 Any
failure or delay by any party in exercising its rights under this Agreement
shall not constitute a waiver of such right.
11.2
Any failure of any party to demand the other party to perform its obligations
under this Agreement shall not be deemed as a waiver of its right to demand the
other party to perform such obligations later.
11.3 If a
party excuses the non-performance by 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 provision.
Article
12 Non-transferability
Unless otherwise specified under this
Agreement, no party can assign or delegate any of the 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
13 Miscellaneous
13.1 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 laws and
regulations.
13.2 Any
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 the
amendment and this Agreement, the amendment shall prevail. In case of several
amendments, the amendment with the latest date shall prevail.
13.3 This
Agreement is executed by Chinese and English in duplicate and both the English
version and Chinese version shall have the same effect. Each of the original
Chinese and English versions of this Agreement shall be executed in five
copies.
13.4 In
witness hereof, the Agreement is duly executed by the parties hereto on the date
first written above.
(REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK)
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(Page of
signature only)
Party
A:
Wang
Xinshun
(signature): /s/
Wang Xinshun
Xxxx
Xxxxxxx
(signature): /s/
Xxxx Xxxxxxx
Xxxxx
Xxxxxxxx :
(signature): /s/
Xxxxx Xxxxxxxx
Henan
Shuncheng Group Coal Coke Co., Ltd.
(official
seal)
Authorized
representative: /s/ Wang Xinshun
(signature)
Party
B:
Anyang Shuncheng Energy Technology
Co., Ltd.
(official
seal)
Authorized
representative: /s/ Wang Jiankai
(signature)
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