Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of May 27, 2019
(the “Effective Date”), by and between Senmiao Technology Limited, incorporated
under the laws of the State of Nevada (the “Company”) and Xi Wen, an individual
(the “Executive”). Except with respect to the direct employment of the Executive
by the Company and the direct employment of the Executive by Sichuan Senmiao
Ronglian Technology Co., Ltd., the Company’s variable interest entity (“Sichuan
Senmiao”), the term “Company” as used herein with respect to all obligations of
the Executive hereunder shall be deemed to include the Company and all of its
subsidiary and variable interest entity (collectively, the “Group”).

 

RECITALS

 

WHEREAS, the Executive has served as the Chief Executive Officer of the Company
since August 1, 2018 and has not received any compensation for such services;

 

WHEREAS, the Executive has served as the Executive Director of Sichuan Senmiao
since February 2017 and has not received any compensation for such services; and

 

WHEREAS, the Company desires to continue to employ the Executive as its Chief
Executive Officer and to pay the Executive appropriate compensation for such
services.

 

NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, the parties agree as follows:

 

1.   POSITION

 

The Company and the Executive hereby agree that Executive shall continue to
serve in the positions of Chief Executive Officer of the Company and Executive
Director of Sichuan Senmiao (the “Employment”).

 

2.   TERM  

 

Subject to the terms and conditions of this Agreement, the initial term of the
Employment shall be three (3) years commencing on the Effective Date, unless
terminated earlier pursuant to the terms of this Agreement. The Employment will
be renewed automatically for additional one-year terms if neither the Company
nor the Executive provides a notice of termination of the Employment to the
other party within thirty (30) days prior to the expiration of the applicable
term.

 

3.   DUTIES AND RESPONSIBILITIES

 

  (a) The Executive’s duties at the Company will include all the duties and
responsibilities associated with a Chief Executive Officer of a U.S.-listed
public company with its primary operations in the People’s Republic of China.
 As Chief Executive Officer of the Company, the Executive shall be primarily
responsible for managing the day-to-day affairs and operations of the Company
and each member of the Group as well as all tasks and responsibilities normally
associated with the offices of Chief Executive Officer of a company of similar
size and nature to the Company and Executive Director of a company of similar
size and nature to Sichuan Senmiao.  During the term of his Employment,
Executive shall report and be responsible to the Company’s the Board of
Directors (including any designated compensation or other committee thereof, the
“Board”).  Executive shall also perform such other duties and responsibilities
as may be determined by the Board as long as such duties and responsibilities
are consistent with those of the Company’s Chief Executive Officer.

 

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  (b) The Executive shall devote all of his working time, attention and skills
to the performance of his duties to the Company and the Group and shall
faithfully and diligently serve the Company and the Group in accordance with
this Agreement, the Articles of Incorporation and Bylaws of the Company, as
amended and restated from time to time, and the guidelines, policies and
procedures of the Company approved from time to time by the Board.

 

  (c) During the term of Employment or other association with the Group, the
Executive shall use his best efforts to perform his duties hereunder. The
Executive shall not, without the prior written consent of the Board, become an
employee of any entity other than the Company or any member of the Group, and
shall not be concerned or interested in any business or entity that engages in
the same business in which the Company or any member of the Group engages (any
such business or entity, a “Competitor”), provided that nothing in this clause
shall preclude the Executive from holding less than one percent (1%) of the
outstanding voting equity of any Competitor that is listed on any securities
exchange or recognized securities market anywhere. The Executive shall notify
the Company in writing of his interest in such shares or securities in a timely
manner and with such details and particulars as the Company may reasonably
require.

 

4.   NO BREACH OF CONTRACT

 

The Executive hereby represents to the Company that: (i) the execution and
delivery of this Agreement by the Executive and the performance by the Executive
of his duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any other agreement or policy to which the Executive is
a party or otherwise bound except for agreements entered into by and between the
Executive and any member of the Group pursuant to applicable law, if any;
(ii) that the Executive has no information (including, without limitation,
confidential information and trade secrets) relating to any other person or
entity which would prevent, or be violated by, the Executive entering into this
Agreement or carrying out his duties hereunder; (iii) that the Executive is not
bound by any confidentiality, trade secret or similar agreement (other than
this) with any other person or entity except for other member(s) of the Group,
as the case may be.

 

5.   LOCATION

 

The Executive will be based in Sichuan Province, China. The Company reserves the
right to transfer or second the Executive to any location in China or elsewhere
in accordance with its operational requirements. Executive acknowledges that his
position will require travel, both within and outside of China.

 

6.   COMPENSATION AND BENEFITS

 

  (a) Base Salary. The Executive’s initial base salary shall be (i) One Hundred
Thousand U.S. Dollars ($100,000) per year for his service to the Company, paid
quarterly in arrears, and (ii) RMB 600,000 per year for his service to Sichuan
Senmiao, paid monthly in arrears, and such compensation is subject to annual
review and adjustment by the Board.  The payment of Base Salary shall commence
immediately upon the Company’s receipt of proceeds of a financing of at least
$1,000,000.  The Executive shall also be entitled to receive salary, as and in
the amounts approved by the Board, from any other member of the Group.

 

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  (b) Bonus. The Executive shall be eligible for a cash bonus of up to Fifty
Thousand U.S. Dollars ($50,000) per fiscal year upon satisfaction of certain
performance targets as determined by the Board in its discretion.  The cash
bonuses are subject to annual review and adjustment by the Board. Any bonuses
proposed to be paid to the Executive from any member of the Group shall be
subject to review and approval by the Board in advance of payment.

 

  (c) Equity Incentives. To the extent the Company adopts and maintains an
equity incentive plan, the Executive will be eligible to participate in such
plan pursuant to the terms thereof as determined by the Board.

 

  (d) Benefits. The Executive is eligible for participation in any standard
employee benefit plan of the Company or any member of the Group that currently
exists or may be adopted by the Company or any member of the Group in the
future, including, but not limited to, any retirement plan, life insurance plan,
health insurance plan and travel/holiday plan, provided that such plans shall be
subject to review and approval by the Board.

 

  (e) Expenses. The Executive shall be entitled to reimbursement by the Company
for all reasonable ordinary and necessary travel and other expenses incurred by
the Executive in the performance of his duties under this Agreement; provided
that he properly accounts for such expenses in accordance with the Company’s
policies and procedures.

 

7.   TERMINATION OF THE AGREEMENT

 

  (a)

By the Company.

 

(i) For Cause. The Company may terminate the Employment for cause, at any time,
without notice or remuneration (unless notice or remuneration is specifically
required by applicable U.S. federal or state law, in which case notice or
remuneration will be provided in accordance with applicable law), if:

 

(1)    the Executive is convicted or pleads guilty to a felony or to an act of
fraud, misappropriation or embezzlement;

 

(2)    the Executive has been grossly negligent or acted dishonestly to the
detriment of the Company;

 

(3)    the Executive has engaged in actions amounting to willful misconduct or
failed to perform his duties hereunder and such failure continues after the
Executive is afforded not less than fifteen (15) days to cure such failure; or

 

(4)    the Executive violates Sections 8, 9 or 10 of this Agreement.

 

Upon termination for “cause”, the Executive shall be entitled to the amount of
base salary earned and not paid prior to termination. However, the Executive
will not be entitled to receive payment of any severance benefits or other
amounts by reason of the termination, and the Executive’s right to all other
benefits will terminate, except as required by any applicable law.

 

(ii) For death and disability. The Company may also terminate the Employment, at
any time, without notice or remuneration (unless notice or remuneration is
specifically required by applicable U.S. federal or state law, in which case
notice or remuneration will be provided in accordance with applicable law), if:

 

 

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(1)    the Executive has died, or

 

(2)    the Executive has a disability which shall mean a physical or mental
impairment which, as reasonably determined by the Board, renders the Executive
unable to perform the essential functions of his employment with the Company,
with or without reasonable accommodation, for more than 120 days in any 12-month
period, unless a longer period is required by applicable law, in which case that
longer period would apply.

 

Upon termination for death or disability, the Executive shall be entitled to the
amount of base salary earned and not paid prior to termination. However, the
Executive will not be entitled to receive payment of any severance benefits or
other amounts by reason of the termination, and the Executive’s right to all
other benefits will terminate, except as required by any applicable law.

 

(iii) Without Cause. The Company may terminate the Employment without cause, at
any time, upon thirty (30) days’ prior written notice. Upon termination without
cause, the Company shall provide the following severance payments and benefits
to the Executive: (1) a lump sum cash payment equal to three (3) months of the
Executive’s base salary as of the date of such termination; (2) a lump sum cash
payment equal to a pro-rated amount of his target annual bonus for the year
immediately preceding the termination, if any; (3) payment of premiums for
continued health benefits under the Company’s health plans for three (3) months
following the termination, if any; and (4) immediate vesting of 100% of the
then-unvested portion of any outstanding equity awards held by the Executive.

 

Upon termination without cause, the Executive shall also be entitled to the
amount of base salary earned and not paid prior to termination.

 

In order to be eligible for, and as a condition precedent for the payment of,
the severance payments and benefits under this Section 7(a)(iii), the Executive
must execute and deliver to the Company a general release of the Company and all
members of the Group and their affiliates in a form reasonably satisfactory to
the Board.

 

(iv) Change of Control Transaction. If the Company or its successor terminates
the Employment upon a merger, consolidation, or transfer or sale of all or
substantially all of the assets of the Company with or to any other
individual(s) or entity (the “Change of Control Transaction”), the Executive
shall be entitled to the following severance payments and benefits upon such
termination: (1) a lump sum cash payment equal to three (3) months of the
Executive’s base salary at a rate equal to the greater of his annual salary in
effect immediately prior to the termination, or his then current annual salary
as of the date of such termination; (2) a lump sum cash payment equal to a
pro-rated amount of his target annual bonus for the year immediately preceding
the termination; (3) payment of premiums for continued health benefits under the
Company’s health plans for three (3) months following the termination; and
(4) immediate vesting of 100% of the then-unvested portion of any outstanding
equity awards held by the Executive.

 

  (b)

By the Executive. The Executive may terminate the Employment at any time with
thirty (30) days’ prior written notice to the Company without cause or if
(1) there is a material reduction in the Executive’s authority, duties and
responsibilities unless such reduction was made with his consent, or (2) there
is a material reduction in the Executive’s annual salary (the occurrences in (1)
and (2) being referred to as “Good Reason”). Upon the Executive’s termination of
the Employment due to Good Reason, the Company shall provide compensation to the
Executive equivalent to 3 months of the Executive’s base salary that he is
entitled to immediately prior to such termination.

 

In order to be eligible for, and as a condition precedent for the payment of,
the severance payments and benefits under this Section 7(b), the Executive must
execute and deliver to the Company a general release of the Company and all
members of the Group and their affiliates in a form reasonably satisfactory to
the Board.

 

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  (c) Notice of Termination. Any termination of the Executive’s employment under
this Agreement shall be communicated by written notice of termination from the
terminating party to the other party. The notice of termination shall indicate
the specific provision(s) of this Agreement relied upon in effecting the
termination.

 

8.   CONFIDENTIALITY AND NONDISCLOSURE

 

  (a) Confidentiality and Non-disclosure. The Executive hereby agrees at all
times during the term of the Employment and after its termination, to hold in
the strictest confidence, and not to use, except for the benefit of the Group,
or to disclose to any person, corporation or other entity without written
consent of the Company, any Confidential Information. The Executive understands
that “Confidential Information” means any proprietary or confidential
information of the Company, its affiliates, or their respective clients,
customers or partners, including, without limitation, technical data, trade
secrets, research and development information, product plans, services, customer
lists and customers, supplier lists and suppliers, software developments,
inventions, processes, formulas, technology, designs, hardware configuration
information, personnel information, marketing, finances, information about the
suppliers, investors, joint ventures, affiliates, financing sources and
financial partners and other persons with whom the Group does business,
information regarding the skills and compensation of other employees of the
Company or other business information disclosed to the Executive by or obtained
by the Executive from the any member of the Group, or their respective
investors, customers or partners either directly or indirectly in writing,
orally or otherwise, if specifically indicated to be confidential or reasonably
expected to be confidential. Notwithstanding the foregoing, Confidential
Information shall not include information that is generally available and known
to the public through no fault of the Executive.

 

  (b) Company Property. The Executive understands that all documents (including
computer records, facsimile and e-mail) and materials created, received or
transmitted in connection with his work or using the facilities of the Group are
property of the Company or applicable Group member and subject to inspection by
the Company, at any time. Upon termination of the Executive’s employment with
the Company (or at any other time when requested by the Company), the Executive
will promptly deliver to the Company all documents and materials of any nature
pertaining to his work with the Group and will provide written certification of
his compliance with this Agreement.  Under no circumstances will the Executive
have, following his termination, in his possession any property of the Group, or
any documents or materials or copies thereof containing any Confidential
Information.

 

  (c) Former Employer Information. The Executive agrees that he has not and will
not, during the term of his employment, (i) improperly use or disclose any
proprietary information or trade secrets of any former employer or other person
or entity with which the Executive has an agreement or duty to keep in
confidence information acquired by Executive, if any, or (ii) bring into the
premises of the Company any document or confidential or proprietary information
belonging to such former employer, person or entity unless consented to in
writing by such former employer, person or entity. The Executive will indemnify
the Company and each Group member and hold it harmless from and against all
claims, liabilities, damages and expenses, including reasonable attorneys’ fees
and costs of suit, arising out of or in connection with any violation of the
foregoing.

 

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  (d) Third Party Information. The Executive recognizes that the Company and
Group members may have received, and in the future may receive, from third
parties their confidential or proprietary information subject to a duty on the
Company’s or applicable Group member’s part to maintain the confidentiality of
such information and to use it only for certain limited purposes. The Executive
agrees that the Executive owes the Company, Group members and such third
parties, during the Executive’s employment by the Group and thereafter, a duty
to hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person or firm and to use it in a
manner consistent with, and for the limited purposes permitted by, the Company’s
agreement with such third party.

 

This Section 8 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 8, the Company shall have right
to seek remedies permissible under applicable law.

 

9.   CONFLICTING EMPLOYMENT.

 

The Executive hereby agrees that, during the term of the Employment, he will not
engage in any other employment, occupation, consulting or other business
activity related to the business in which the Company is now involved or becomes
involved during the term of the Employment, nor will the Executive engage in any
other activities that conflict with his obligations to the Group without the
prior written consent of the Company.

 

10.   NON-COMPETITION AND NON-SOLICITATION

 

In consideration of the salary paid to the Executive by the Company and the
Group, the Executive agrees that during the term of the Employment and for a
period of twelve (12) months following the termination of the Employment for
whatever reason:

 

  (a) The Executive will not approach clients, investors, customers or contacts
of the Company or the Group, users of the Company’s or the Group’s services, or
other persons or entities introduced to the Executive in the Executive’s
capacity as a representative of the Company or the Group for the purposes of
doing business with such persons or entities which will harm the business
relationship between the Company or the Group and such persons and/or entities;

 

  (b) the Executive will not assume employment with or provide services as a
director, consultant or otherwise for any Competitor, or engage, whether as
principal, partner, licensor or otherwise, in any Competitor; and

 

  (c) the Executive will not seek, directly or indirectly, by the offer of
alternative employment or other inducement whatsoever, to solicit the services
of any officer, director or employee of or consultant to the Company or any
member of the Group employed or engaged as at or after the date of such
termination, or in the twelve (12) months preceding such termination.

 

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The provisions contained in Section 11 are considered reasonable by the
Executive in order to protect the legitimate business interests of Company and
the Group. In the event that any such provisions should be found to be void
under applicable laws but would be valid if some part thereof was deleted or the
period or area of application reduced, such provisions shall apply with such
modification as may be necessary to make them valid and effective.

 

This Section 10 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 11, the Executive acknowledges
that there will be no adequate remedy at law, and the Company or the applicable
member of the Group shall be entitled to injunctive relief and/or a decree for
specific performance, and such other relief as may be proper (including monetary
damages if appropriate). In any event, the Company or the applicable member of
the Group shall have right to seek all remedies permissible under applicable
law.

 

11.   WITHHOLDING TAXES

 

Notwithstanding anything else herein to the contrary, the Company or the
applicable Group member may withhold (or cause there to be withheld, as the case
may be) from any amounts otherwise due or payable under or pursuant to this
Agreement such national, provincial, local or any other income, employment, or
other taxes as may be required to be withheld pursuant to any applicable law or
regulation.

 

12.   ASSIGNMENT

 

This Agreement is personal in its nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder; provided, however, that (i) the Company may
assign or transfer this Agreement or any rights or obligations hereunder to any
member of the Group without such consent, and (ii) in the event of a Change of
Control Transaction, this Agreement shall, subject to the provisions hereof, be
binding upon and inure to the benefit of such successor and such successor shall
discharge and perform all the promises, covenants, duties, and obligations of
the Company hereunder. 

 

13.   SEVERABILITY

 

If any provision of this Agreement or the application thereof is held invalid,
the invalidity shall not affect other provisions or applications of this
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.

 

14.   ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement and understanding between the
Executive and the Company regarding the terms of the Employment and supersedes
all prior or contemporaneous oral or written agreements concerning such subject
matter. The Executive acknowledges that he has not entered into this Agreement
in reliance upon any representation, warranty or undertaking which is not set
forth in this Agreement. Any amendment to this Agreement must be in writing and
signed by the Executive and the Company.

 

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15.   GOVERNING LAW; JURISDICTION

 

This Agreement and all issues pertaining to the Employment or the termination of
the Employment shall be governed and interpreted in accordance with the laws of
New York without regard to choice of law principles, except the arbitration
provision which shall be governed by the Federal Arbitration Act. Executive
agrees that if, for any reason, any provision hereof is unenforceable, the
remainder of this Agreement will nonetheless remain binding and in effect. Any
dispute regarding the Employment or this Agreement, other than any injunctive
relief available under Section 10 hereof, which cannot be resolved by
negotiations between the Executive and the Company shall be submitted to, and
solely determined by, final and binding arbitration conducted by the American
Arbitration Association (“AAA”) in accordance with its arbitration rules
applicable to employment disputes, and the parties agree to be bound by the
final award of the arbitrator in any such proceeding. The arbitrator shall apply
the laws of the State of New York with respect to the interpretation or
enforcement of this Agreement, or to any claims involving the Employment or the
termination of the Employment. All questions regarding whether or not a dispute
is subject to arbitration will be resolved by the arbitrator. Arbitration shall
be held in the AAA New York City Office unless the parties agree to another
location in writing. The parties irrevocably submit to the exclusive
jurisdiction of the AAA and waive the defenses of improper venue or forum non
conveniens. The parties waive personal service of any demand for arbitration and
of any summons, complaint, and any other legal process issued in regard to any
dispute concerning or arising from this Agreement or your employment with the
Company. You further agree that you may be given notice of any such arbitration,
action, or suit, by the means set forth in Section 18 of this Agreement.
Judgment upon the award by the arbitrator may be entered in any court having
jurisdiction, including in The People’s Republic of China or Hong Kong. The
arbitrator shall award costs and attorney fees to the prevailing party. As part
of this Agreement, Executive agrees that Executive may not participate in a
representative capacity or as a member of any class of claims pertaining to any
claim against the Company. There is no right or authority for any claims subject
to this Agreement to be arbitrated on a class or collective action basis or on
any basis involving claims brought in a purported representative capacity on
behalf of any other person or group of people similarly situated. Such claims
are prohibited. Furthermore, claims brought by or against either the Company or
the Executive may not be joined or consolidated in the arbitration with claims
brought by or against any other person or entity unless otherwise agreed to in
writing by all parties involved.

 

16.   AMENDMENT

 

This Agreement may not be amended, modified or changed (in whole or in part),
except by a formal, definitive written agreement expressly referring to this
Agreement, which agreement is executed by both of the parties hereto.

 

17.   WAIVER

 

Neither the failure nor any delay on the part of a party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.

 

18.   NOTICES

 

All notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given and made if (i) delivered by hand, (ii) otherwise delivered against
receipt therefor, (iii) sent by a recognized courier with next-day or second-day
delivery or (iv) by email to the last known address of the other party, with
communications to the Company being to the attention of the Company’s Chief
Financial Officer.

 

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19.   COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original as against any party whose signature appears
thereon, and all of which together shall constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories. Photographic or electronic copies of such
signed counterparts may be used in lieu of the originals for any purpose, and
signed counterparts may be delivered by electronic means.

 

20.   NO INTERPRETATION AGAINST DRAFTER

 

Each party recognizes that this Agreement is a legally binding contract and
acknowledges that it, or he has had the opportunity to consult with legal
counsel of choice. In any construction of the terms of this Agreement, the same
shall not be construed against either party on the basis of that party being the
drafter of such terms.

 

IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.

 

  Senmiao Technology Limited         By: /s/ Xiaoyuan Zhang   Name:  Xiaoyuan
Zhang   Title: Chief Financial Officer         Executive         Signature:  /s/
Xi Wen   Name: Xi Wen

 

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