Management Entrustment Agreement

 

This Agreement is made and entered into on December 10, 2018 in the People’s
Republic of China, by and between the following parties:

 

 

Party A: Shenzhen Dingshang Technology Co., Ltd

 

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Registered business address: 13B-1 South Garden Fengye Building, Southeast of
Nanshan Street, Nanshan District, Shenzhen

 

Party B: Adamant DRI Processing and Minerals Group

 

Registered business address: Chunshugou Luanzhuang Village, Zhuolu County,
Zhangjiakou, Hebei Province.

 

WHEREAS:

 

1. Party A is a limited liability enterprise organized and validly existing
under the laws of the PRC, with business license registration number:
91440300699088287X.

 

2. Party B is a corporation organized under the laws of the State of Nevada,
which owns all of the equity of China Real Fortune Mining Limited, a BVI
corporation, which owns all of the equity of Real Fortune Holdings Limited, a
Hong Kong limited company, which in turn owns all of the issued and outstanding
capital stock of Zhangjiakou Tongda Mining Technologies Service Co., Ltd., a
Chinese limited company.

 

3. In order to let Party B have actual control of Party A, Party A intends to
irrevocably entrust to Party B for its management the right of operation
management of Party A and the responsibilities and authorities of the
shareholders and the Board of Directors of Party A.

 

4. Party B agrees to accept the entrustment of Party A, and to exercise the
right of operation management of Party A and the responsibilities and
authorities of the shareholders and the Board of Directors of Party A.

 

5. Party A has obtained the approval of its shareholders to enter into this
Agreement.

 

NOW, THEREFORE, through friendly consultation, under the principle of equality
and mutual benefits, in accordance with the relevant laws and regulations of the
People’s Republic of China, the parties agree to enter into this Agreement and
to be bound with the terms and conditions as follows:

 

Article 1 Management Entrustment

 

1.1 Entrusted Operation

 

Party A agrees to irrevocably grants Party B the right to manage all operations
of Party A and acknowledges that Party B will have all rights and authorities of
Party A’s investor, shareholders and Board of Directors as more fully set forth
in this Agreement. Party B agrees to exercise the aforesaid rights and
responsibilities in accordance with the terms and conditions of this Agreement.
The sole shareholder of Party A has issued Power of Attorney (“Power of
Attorney”) to Party B by on the same day as this Agreement. Unless and until
this Agreement terminates, the entrustments granted herein and in the Power of
Attorney shall be irrevocable.

 

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1.2 Term of Entrusted Operation

 

  1.2.1 This Agreement is executed on the date first above written and shall
take effect as of such date (such day, the “Effective Date”), and subject to the
termination provisions of Sections 1.2.2. and 1.2.3 below (collectively, the
“Early Termination Provisions”), shall continue in effect until the thirtieth
anniversary of the Effective Date (the “Initial Term”); provided, that if this
Agreement has not been terminated prior to the end of the Initial Term or a
Renewal Term (as the case may be) in accordance with the Early Termination
Provisions, the term of this Agreement automatically and without any action of
any party shall be extended for additional successive ten year periods
thereafter (each a “Renewal Term”), unless not less than 30 days prior to the
end of the Initial Term or any Renewal Term Party B notifies Party A in writing
that this Agreement shall terminate at the end of the Initial Term or that
Renewal Term, as the case may be. In no event shall Party A have the right to
unilaterally terminate this Agreement. Anything to the contrary in the foregoing
notwithstanding, upon the occurrence of the events set forth below this
Agreement shall terminate on the date specified:         1.2.2 the day when the
Agreement is terminated by Party B in its sole and absolute discretion by the
delivery to Party A of a written notice of termination; or         1.2.3 the day
when Party B completes the acquisition of all the assets or at least 51% of the
equity interests of Party A.

 

1.3 Purpose of Entrusted Operation

 

Party B shall fully manage the operation activities of Party A as its exclusive
managing consultant and provide Party A with exclusive technical support for
Party A. Party B shall perform the responsibilities and rights of Party A’s
shareholders and the Board of Directors. Party A shall pay its profit (if any)
to Party B and Party B shall be responsible to Party A for its loss (if any).
During the term of the entrusted operation, Party B, as the entrusted manager,
shall provide full management to Party A’s operations.

 

1.4 Content of Entrusted Operation

 

As of the day when this Agreement comes into effect, Party B shall be in charge
of all aspects of party A’s operations. The contents of the entrusted operation
shall include but not be limited to the right to make major decisions, capital
management, financial management, assets management, human resource management,
daily operation management and technical support. For Party B’s operation
decision for the operation management of Party A, Party A shall unconditionally
provide necessary assistance.

 

1.4.1 Major Decision Right Management

 

  (1) Pursuant to the Power of Attorney issued by the shareholder of Party A on
the same day as this Agreement (“Power of Attorney”), Party B shall have the
right to participate in the shareholders’ meeting of Party A, vote on the
matters proposed at the meeting, suggest the holding of shareholders’ meetings
as the agent of the shareholders of Party A, and have other shareholders’ voting
rights as stipulated in the Articles of Association of Party A and the Companies
Law of the PRC. Party B shall also have the right to make the following major
decisions:         a) to decide the operation plan and investment scheme for
Party A;           b) to discuss and approve the reports of the Board of
Directors and the supervisor;           c) to discuss and approve the annual
financial budget and settlement plan;           d) to discuss and approve the
profit distribution plan and the loss compensation plan;           e) within the
authorization of the shareholder’s meeting, to decide such matters of Party A as
investment, assets purchase or sale, assets mortgage, external guarantee, assets
management and related party transaction;

 

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    f) to resolve on the increase or decrease of the registered capital;        
    g) to resolve on the issuance of the corporate bond;             h) to
resolve on the matters including merger, division, change of corporate form,
dissolution and liquidation of the company;             i) to amend the articles
of association;             j) to retain or replace the Certified Public
Accounting (“CPA”) firm providing auditing service for Party A.

 

  (2) Party B shall have the right to designate candidates to be the directors
and supervisors of Party A.         (3) Party B shall have the right to prepare
the scheme to purchase or repurchase the shares of Party A, the scheme of
reorganization and the scheme to go public for Party A; Party A should make sure
that the shareholders of Party A shall agree to such schemes and go through the
necessary legal procedures to complete said schemes.

 

1.4.2 Capital Management

 

Party B shall manage and control all funds of Party A. Party A shall open or
appoint a management account for its funds (“Management Account”) and Party B
shall be responsible for and have the right in deciding the inward and outward
remittance of its funds. The seals affixed to such account shall be that of the
person appointed and confirmed by Party B. As of the day when this Agreement
comes into effect, all cash of Party A, including but not limited to revenues
from sales, existing working capitals, collecting of receivables, and all
payables and operating expenses, employees’ salaries and compensations and
assets acquisition, must be saved and transacted in this Management Account at
the direction of Party B.

 

1.4.3 Financial Management

 

  (1) Party B shall establish the financial and accounting system of Party A
pursuant to the applicable laws of the PRC.         (2) Party B shall submit an
annual budget and settlement scheme to the shareholder of Party A.         (3)
Party B shall on a quarterly basis file financial statements to the shareholder
of Party A, and prepare the annual financial statements of Party A within ninety
(90) days after the end of each fiscal year, and provide them to the shareholder
after they are audited by the CPA firm.

 

1.4.4 Assets Management

 

  (1) Party A shall deliver a list of all its assets on the Effective Date of
this Agreement (“Base Date”) to Party B, within 5 days after the effective date
of this Agreement and undertake it has no action adversely affecting such assets
after the Base Date and before the execution of this Agreement. Party B has the
right to use such assets for the necessary operations of Party A.         (2)
Within the term of the entrusted operation, Party A shall not transfer the
assets of Party A or reduce their value, unless otherwise arising in the
ordinary course of business of Party A and obtaining approval from Party B.

 

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1.4.5 Human Resource Management (“HR Management”)

 

  (1) Party B have the right to decide the setup of the internal governance
structure of Party A;         (2) Party B shall have the right to decide all
matters in relation to HR of Party A, including but not limited to the
employment, removal, staffing and remuneration of senior officers.         (3)
Within the term of the entrusted operation, Party B shall continue to perform
the labor contracts signed by Party A before the Effective Date and its
employees according to the PRC labor laws.

 

1.4.6 Daily Operation Management and Technical Support

 

  (1) Party B shall have the right to decide all daily production and sales
arrangements of Party A such as the production scale, product category, sales
strategy and execution of operating contracts.         (2) Party B undertakes to
make full use of its existing advanced methods of management and technologies,
to improve product quality, broaden sales channels, reduce product cost and
operating expenses.

 

1.5 Entrustment Fee

 

  1.5.1 In consideration of the services to be provided by Party B, Party A
shall pay to Party B after the end of each quarter a management consulting fee
equal to all pre-tax profits, if any, of Party A for that quarter (such pre-tax
profits are referred to herein as the “Profits”).         1.5.2 Such fees that
Party A shall pay (or cause to be paid) to Party B are to be paid in the
following manner: during the term of this Agreement: the Profits for each
quarter shall be computed no later than 45 days after the end of each quarter,
except that in the case of the final quarter of a fiscal year the period for
calculating the Profits shall be 90 days. Once such computation is completed,
but in all events within 45 days of the end of each fiscal quarter (90 days in
the case of the fourth quarter), 100% of all Profits for that quarter shall be
paid to Party B. If the Profits for any quarter are zero or negative, meaning
that Party A had a loss for such quarter, Party A will not pay Party B a
management consulting fee for that quarter, and any loss for a quarter shall be
deducted from the management consulting fee for the following quarters; provided
further, if at any time Party A shall request that Party B pay to it the amount
of any loss that has not been offset against a Profit, Party B will do so within
thirty days of such request.         1.5.3 Should Party A fail to pay all or any
part of the fees due to Party B under this Agreement within the time stipulated,
Party A shall pay to Party B interest on the amount overdue based at an
adjustable rate equal to the three (3) month lending rate for RMB announced from
time to time by the People’s Bank of China from the date due until the date paid
in full.         1.5.4 Following the end of each fiscal year of Party A, the
parties shall conduct an examination and verification of the management
consulting fees paid by Party A based upon the Profits of Party A for each of
the quarters during such fiscal year as confirmed by the audit report by the CPA
firm retained by Party A and make appropriate adjustments within fifteen (15)
business days following the issuance of such audit report, so that any
overcharge will be refunded or any deficiency will be compensated for. Party A
covenants and warrants to Party B that it will provide all necessary materials
and assistance to such CPA firm and cause the preparation and issuance to the
parties of the foregoing audit report by such CPA firm within ninety (90) days
following the end of each fiscal year of Party.

 

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1.6 Assumption of the Entrustment Risk

 

Party B shall assume all the operation risks in association with the management
of Party A entrusted to it. Party B shall be responsible for any loss incurred
to Party A’s operation. If Party A’s cash is not enough to pay its debt, Party B
is liable to pay the debt; if the loss leads to Party A’s net asset less than
the total contribution of Party A’s all shareholders (i.e. paid-in capital),
Party B shall be liable to make up for the deficiency.

 

Article 2 Rights and Obligations of Party A

 

During the term of the entrusted operation, the rights and obligations of Party
A shall include:

 

  (1) After the execution of this Agreement, the management of Party A shall be
handed over to Party B. Party A shall, within 5 days after the effective date of
this Agreement, deliver Party A’s business data, personal archives, business
licenses, seals, financial records, legal title certificates and other relevant
documentation to Party B or representative authorized by Party B, in order to
guarantee Party B to execute its operation responsibilities.         (2) During
the term of the entrusted operation, without Party B’s consent, Party A and its
shareholder and the Board of Directors shall not make any decision on Party A’s
operations, and they shall not intervene with Party B’s entrusted management
activities in any form;         (3) During the term of the entrusted operation,
Party A’s Board of directors shall have the obligation to cooperate with Party B
in accordance with Party B’s request to ensure the stability and consistency of
the operation;         (4) To entrust the authorities of the shareholders and
the Board of Directors to Party B;         (5) To timely pay the entrustment fee
to Party B;         (6) Without Party B’s consent, Party A shall not entrust any
third party other than Party B in any form to manage Party A’s businesses;      
  (7) The Board of Directors and shareholders of Party A shall issue necessary
documents for the purpose of accomplishing the management by Party B;        
(8) Party A shall do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises
and licenses;         (9) Party A shall actively assist Party B in transacting
foreign merger formalities provided that doing so is permitted by the laws of
the PRC;         (10) Party A shall not unilaterally early terminate this
Agreement for any reason.         (11) Other rights and obligations of Party A
provided under this Agreement.

 

Article 3 Negative Covenants

 

Party A covenants and agrees that, during the term of this Agreement, without
the prior written consent of Party B:

 

  (1) Party A will not issue, purchase or redeem any equity securities of Party
A;         (2) Party A will not create, incur, assume or suffer to exist any
liens upon or with respect to any property or assets of Party A whether now
owned or hereafter acquired, provided that the provisions of this subsection
shall not prevent the creation, incurrence, assumption or existence of:

 

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a) liens for taxes not yet due, or liens for taxes being contested in good faith
and by appropriate proceedings for which adequate reserves have been
established; and           b) liens in respect of property or assets of Party A
imposed by the laws of the PRC, which were incurred in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of Party A or (ii) which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property of assets subject to any such
lien.

 

  (3) Party A will not liquidate ,dissolve or terminate its operations or enter
into any transactions of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time)
all or any part of its property or assets, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any person, except that (i)
Party A may make sales of inventory in the ordinary course of business; and (ii)
Party A may, in the ordinary course of business, sell equipment which is
uneconomic or obsolete;         (4) Party A will not declare or pay any
dividends, or return any capital, to its shareholders or authorize or make any
other distribution, payment or delivery of property or cash to its shareholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any options or warrants issued by Party A with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes;         (5) Party A will not contract, create, incur, assume or suffer
to exist any indebtedness, except accrued expenses and current trade accounts
payable incurred in the ordinary course of business, and obligations under trade
letters of credit inclined by Party A in the ordinary course of business, which
are to be repaid in full not longer than one year after the date on which such
indebtedness is originally incurred to finance the purchase of goods by Party A;
        (6) Party A will not lend money or credit or make advances to any
person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to, any other person, except
that Party A may acquire and hold receivables owing to it, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;         (7) Party A will not enter into
any transactions or series of related transactions, whether or not in the
ordinary course of business, with any affiliates of Party A, other than on terms
and conditions substantially as favorable to Party A as would be obtainable by
Party A at the time in a comparable arm’s-length transaction with a person other
than an affiliate and with the prior written consent of Party B;         (8)
Party A will not make any expenditures for fixed or capital assets (including,
without limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with generally accepted accounting principles in the
PRC or in the United States) without the prior written consent of Party B; and  
      (9) Party A will not: (i) make any voluntary or optional payment or
prepayment on or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) any existing
indebtedness; (ii) amend or modify, or permit the amendment or modification of,
any provision of any existing indebtedness or of any agreement (including,
without limitation, any purchase agreement, indenture, loan agreement or
security agreement) relating to any of the foregoing; or (iii) amend, modify or
change its Article of Association or Business License, or any agreement entered
into by it, with respect to its shares, or enter into any new agreement with
respect to its shares.

 

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Article 4 Rights and Obligations of Party B

 

During the term of the entrusted operation, the rights and obligations of Party
B shall include:

 

  (1) Party B shall enjoy independent and comprehensive management right over
Party A’s operations;         (2) Party B shall have the right to adjust the
organizational structure and the personnel placement of Party A based on the
needs of the management;         (3) Party B shall have the right to dispose of
all the assets of Party A, and Party B can dispose of any of the aforesaid
assets without any prior consent of Party A;         (4) Party B shall be
entitled to entrustment fees in accordance with this Agreement.         (5)
Party B shall carry out all the responsibilities and rights entrusted to it
under this Agreement in good faith, and shall pay reasonable attention to the
entrusted matters and notify Party A timely of relevant matters;         (6)
Party B shall act in good faith and consult with Party A in regards to the
handling of matters covered by this Agreement;         (7) Other obligations
shall be performed by Party B under this Agreement.

 

Article 5 Warranties and Representations

 

5.1 Party A has stated to Party B and Party B acknowledges that Party A is
dedicated to the provision of a complete set of intelligent digital
implementation plans for different exhibition center projects and the provision
of the most innovative model designs for different exhibition centers and real
estate business. Party A was founded on December 24, 2009, with the registered
capital of RMB1 million, and is located at 13B-1 South Garden Fengye Building,
Southeast of Nanshan Street, Nanshan District, Shenzhen. Party A has delivered
to Party B its financial statements for the quarter ended September 30, 2018,
which Party A represents are accurate and complete in all respects.

 

5.2 Each party warrants and represents to the other party, on the execution day
of this Agreement, that:

 

  (1) It has the right to enter into this Agreement, and the ability to perform
this Agreement;         (2) In order to execute and perform this Agreement, each
party has gone through the necessary internal decision-making procedures and
obtained the approval;         (3) Each party has duly authorized its
representative to execute this Agreement;         (4) Each party shall not have
any reason of its own that will encumber the effectiveness of this Agreement
from the effective date and become binding on such party;         (5) The
execution of this Agreement and the performance of the obligations hereunder
will NOT:

 

    a) violate the business license, articles of association or any other
similar documents of that party;             b) violate the laws and regulations
of China or the government authorization or permit;             c) violate any
other contracts or agreements to which that party is a party (or is bound), or
lead to that party’s breach of contract under such contracts or agreements.

 

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Article 6 Effect of the Agreement

 

This Agreement shall be valid upon the subscription of both parties’ legal
representatives or duly authorized representatives and the affixture of both
parties’ corporate seals.

 

Article 7 Liability of Beach of the Agreement

 

After the effectiveness of this Agreement, apart from the situation described in
Article 8 of this Agreement, either party’s violation of any provisions under
this Agreement shall constitute a breach of this Agreement and thus be liable to
compensate the non-breaching party for any damages that may arise thereof.

 

Article 8 Force Majeure

 

Either party’s failure to perform the obligations or part of the obligations of
this Agreement due to a force majeure event shall not be deemed as a breach of
the agreement; however, the non-performing party shall timely provide effective
evidence of the force majeure event to the other party, and the parties shall
discuss a settlement plan through consultation.

 

Article 9 The Governing Law

 

The execution, effectiveness, interpretation, performance and dispute resolution
of this Agreement shall be governed by the laws and regulations of China.

 

Article 10 Dispute Resolution

 

Any dispute arising under this Agreement shall be first settled by the parties
through friendly consultation. If the negotiation fails within 45 days, either
party is entitled to submit the dispute to the China international Economic and
Trade Arbitration Commission (“CIETAC”) in Beijing for arbitration which shall
be conducted in accordance with the Commission’s arbitration rules in effect at
the time of applying for arbitration. The arbitral award is final and binding
upon both parties.

 

Article 11 Confidentiality

 

  11.1 The parties agree and shall cause their relevant personnel to keep strict
confidence of all the terms and conditions of this Agreement and all the matters
of the entrusted operation that have access to. They shall not disclose the
aforesaid information to any third party unless it is required by the explicit
provision of law, or the instruction of judicial or governmental agencies or
with consent of the other party, otherwise, the disclosing party shall bear the
relevant legal consequences.         11.2 The confidentiality obligation of the
parties shall survive the termination of this Agreement.

 

Article 12 Severability of the Clauses

 

  12.1 If any clause of this Agreement is invalidated or non-enforceable due to
the provisions of laws or regulations, this clause is invalid while all other
clauses shall remain in full force and effect and binding upon both parties.    
    12.2 In the event the aforesaid situation occurs, the parties shall, through
friendly consultation, agree upon supplemental clause to replace the invalid
clause at their earliest possible time.

 

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Article 13 Non-waiver of Rights

 

  13.1 If one party fails or delays to exercise a certain right provided under
this Agreement, such failure or delay shall not constitute the waiver of such
right by that party.         13.2 If one party fails to require the other party
to perform a certain obligation provided under this Agreement, such failure
shall not constitute the waiver by that party of the right to require the other
party to perform at a later time.         13.3 If one party violates any clause
of this Agreement and obtains a waiver of liability from the non-violating
party, such waiver shall not constitute the waiver of liability by the
non-violation party over the violations by the other party at a later time or of
other clauses of this Agreement.

 

Article 14 No Transfer

 

Unless otherwise provided in this Agreement, without the prior written consent
of the other party, one party shall not transfer or entrust this Agreement or
any right or obligation under this Agreement to a third party, nor shall one
party provide any guarantee to a third party or do other similar things.

 

Article 15 Miscellaneous

 

  15.1 Any supplemental agreements entered into by the parties after the
effective date of this Agreement shall be an effective part of this Agreement
and have the same legal effect as this Agreement. If there is any discrepancy
between the supplemental agreement and this Agreement, the supplemental
agreement shall prevail.         15.2 This Agreement is written both in Chinese
and English; in case there is any conflict between the Chinese version and the
English version, the Chinese version shall prevail.         15.3 This Agreement
shall be executed in four counterparts; each party holds one and the rest are
used for the transaction of related formalities. Each of the copies shall be
deemed as the original one and has the same effect.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
specified on the first page of this Agreement.

 

Party A: Shenzhen Dingshang Technology Co., Ltd., (seal)

 

Legal Representative or Authorized Representative (signature): /s/ Jing Xie  
Jing Xie

 

Party B: Adamant DRI Processing and Minerals Group

 

Legal Representative or Authorized Representative (signature): /s/ Ethan Chuang
  Ethan Chuang

 

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Statement

 

Date: December 10, 2018

 

I, Jing Xie, having an address at 13B-1 South Garden Fengye Building, Southeast
of Nanshan Street, Nanshan District, Shenzhen agree that Shenzhen Dingshang
Technology Co., Ltd. may sign the Management Entrustment Agreement with Adamant
DRI Processing and Minerals Group, which irrevocably entrusts in Adamant DRI
Processing and Minerals Group the right to manage in all respects the business
of Shenzhen Dingshang Technology Co., Ltd. including the right to receive all of
its profits and this consent is given by me according to the laws and the
Articles of Association of Shenzhen Dingshang Technology Co., Ltd.

 

Stated by: /s/ Jing Xie                                

 

Jing Xie (ID No. 612324199007184046)

 

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