Unassociated Document


    Exhibit 10.1

     

    ENTRUSTED
MANAGEMENT AGREEMENT

    


    BETWEEN

    


    
      LI
TAO AND OTHER INDIVIDUALS

    

    


    XI’AN
TECHTEAM INVESTMENT HOLDING GROUP COMPANY

    


    SHENZHEN
CAPITAL GROUP CO., LTD

    


    XI’AN
HONGTU CAPITAL CO., LTD

    


    SHAANXI
YUANXING SECIENCE AND TECHNOLOGY CO., LTD

    


    XI’AN
KINGTONE INFORMATION TECHNOLOGY CO., LTD

    


    AND

    


    XI’AN
SOFTECH CO., LTD

    


    December 15, 2009

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        
          

        
  

    

    Entrusted
Management Agreement

     

    This
Entrusted Management Agreement (the “Agreement”) is entered into
as of December 15, 2009 in Xi’an by:

    


    Party A

    


    1.         Li
Tao and other seventeen individuals (collectively, the “Individual Shareholders”),
collectively own 61.6% shares of Xi’an Kingtone Information Technology Co., Ltd,
of which Li Tao owns 36.61% shares of Xi’an Kingtone Information Technology Co.,
Ltd ; the specific list of the Individual Shareholders is referred hereto
as Exhibit A;

    


    2.         Xi’an
TechTeam Investment Holding Group Company, a limited liability company
registered in Xi’an, and the registration number of its legal and valid Business
License is 610131100003173; and it owns 25% shares of Xi’an Kingtone Information
Technology Co., Ltd;

    


    3.         Shenzhen
Capital Group Co., Ltd,a limited
liability company registered in Shenzhen, and the registration number of its
legal and valid Business License is 440301103269709; and it owns 7.42% shares of
Xi’an Kingtone Information Technology Co., Ltd;

    


    4.         Xi’an
Hongtu Capital Co., Ltd, a limited liability company registered in Xi’an, and
the registration number of its legal and valid Business License is
610100100085399; and it owns 3.30% shares of Xi’an Kingtone Information
Technology Co., Ltd;

    


    5.         Shaanxi
Yuanxing Science and Technology Co., Ltd, a limited liability company registered
in Xi’an, and the registration number of its legal and valid Business License is
610000100089857; and it owns 2.68% shares of Xi’an Kingtone Information
Technology Co., Ltd;

    


    6.         Xi’an
Kingtone Information Technology Co., Ltd is an enterprise limited by shares
which is 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 610131100001233 and the legal registered
address is the 3/F of District A, the Industry Office Building, No.181 of Tai
Bai Southern Road, Xi’an City, China.

    


    and

    


    Party
B

    


    Xi’an
Softech Co., Ltd, a wholly foreign-owned enterprise registered in Xi’an; and the
registration number of its legal and valid Business License is
610100400006807;


    
      
         


      

      
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     Whereas,

    


    1.        Party
A constitutes Xi’an Kingtone Information Technology Co., Ltd (hereinafter
referred to as “Kingtone
Information”) and all of its shareholders hold all issued and outstanding
shares of Kingtone Information. Under this Agreement, Li Tao and other
individuals, Xi’an TechTeam Investment Holding Group Company, Shenzhen Capital
Group Co., Ltd, Xi’an Hongtu Capital Co., Ltd, Shaanxi Yuanxing Science and
Technology Co., Ltd, Kingtone Information have acted collectively as one party
to this Agreement;

    


    2.        Xi’an Softech Co., Ltd 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 610100400006807,
and the legal registered address is 3/F of District A, the Industry Office
Building, No.181 of Tai Bai Southern Road, Xi’an City, China.

    


    3.      
 Party A desires to entrust Party B to manage and operate Kingtone
Information;

    


    4.     
  Party B agrees to accept such entrustment and to manage Kingtone
Information on behalf of Party A.

    


    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

    

    


    1.1      Party
A agrees to entrust the management of Kingtone Information to Party B pursuant
to the terms and conditions of this Agreement. Party B agrees to manage Kingtone
Information in accordance with the terms and conditions of this
Agreement.

    


    1.2      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:

    


    (a)         the
winding up of Kingtone Information, or

    (b)         the
termination date of this Entrusted Management Agreement to be determined by the
Parties hereto, or

    (c)         the
date on which Party B completes the acquisition of Kingtone
Information.

    


    1.3      During
the Entrusted Period, Party B shall be fully and exclusively responsible for the
management of Kingtone Information. The management service includes without
limitation the following:


    
      
         


      

      
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    (a)         Party
B shall be fully and exclusively responsible for the operation of Kingtone
Information, which includes the right to appoint and terminate executive
director and the right to hire managerial and administrative personnel etc.
Party A or its voting proxy shall make shareholder’s resolution and Board of
Directors’ resolution based on the decision of Party B.

     

    (b)         Party
B has the full and exclusive right to manage and control all cash flow and
assets of Party A. Kingtone Information shall open an entrusted account or
designate an existing account as an entrusted account. Party B has the full and
exclusive right to decide the use of the funds in the entrusted account. The
authorized signature of the account shall be appointed or confirmed by Party B.
All of the funds of Kingtone Information shall be kept in this account,
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 this entrusted account, 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 this account.

     

    (c)         Party
B shall have the full and exclusive right to control and administrate the
financial affairs and daily operation of Kingtone Information, such as entering
into and performance of contracts, and payment of taxes etc.

    


    1.4      In
consideration of the services provided by Party B hereunder, Party A shall pay
the entrusted management fee to Party B which shall be equal to the earnings
before tax (if any) of Kingtone Information. The entrusted management fee shall
be as follows: during the term of this agreement, the entrusted management fee
shall be equal to Kingtone Information’s estimated earnings before tax, being
the monthly revenues after deduction of operating costs, expenses and taxes
other than income tax. If the earnings before tax is zero, Kingtone Information
is not required to pay the entrusted management fee; if Kingtone Information
sustains losses, all such losses will be carried over to next month and deducted
from next month’s entrusted management fee. Both Parties shall calculate, and
Party A shall pay, the monthly entrusted management fee within 20 days of the
following month. The above monthly payment shall be adjusted after the end of
each quarter but before the filing of tax return for such quarter (the
“Quarterly Adjustment”),
so as to make the after-tax profit of Kingtone Information of that quarter is
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 Kingtone Information of that fiscal year is
zero.

    


    1.5      Party
B shall assume all operation risks out of the entrusted management of Kingtone
Information and bear all losses of Kingtone Information. If Kingtone Information
has no sufficient funds to repay its debts, Party B is responsible for paying
off these debts on behalf of Kingtone Information; if Kingtone Information’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:

    


    (a)         to
hand over Kingtone Information to Party B for entrusted management as of the
effectiveness date of this Agreement and to hand over all of business materials
together with Business License and corporate seal of Kingtone Information to
Party B;

    (b)         Party
A has no right to make any decision regarding Kingtone Information’s operations
without the prior written consent of Party B;

    (c)         to
have the right to know the business conditions of Kingtone Information at any
time and provide proposals;

    (d)         to
assist Party B in carrying out the entrusted management in accordance with Party
B’s requirement;

    (e)         to
perform its obligations pursuant to the Shareholders’ Voting Rights
Proxy

    Agreement,
signed by and between Individual Shareholders, Xi’an TechTeam Investment Holding
Group Company, Shenzhen Capital Group Co., Ltd, Xi’an Hongtu Capital Co., Ltd,
Shaanxi Yuanxing Science and Technology Co., Ltd and Party B on December
15, 2009 in Xi’an , and not to violate the said agreement;

    (f)    
     not to intervene Party B’s management over Kingtone
Information in any form by making use of shareholder’s power;

    (g)      
  not to entrust or grant their shareholders’ rights in Kingtone
Information to a third party other than Party B without Party B’s
consent;

    (h)    
    not to otherwise entrust other third party other than Party B
to manage Kingtone Information in any form without Party B’s prior written
consent;

    (i)        
 not to terminate this Agreement unilaterally with for any reason
whatsoever; or

    (j)        
 to enjoy other rights and perform other obligations under the
Agreement.

    


    2.2      During
the term of this Agreement, Party B’s rights and obligations
include:

    


    (a)         to
enjoy the full and exclusive right to manage Kingtone Information
independently;

    (b)         to
enjoy the full and exclusive right to dispose of all assets of Kingtone
Information;

    (c)         to
enjoy all profits and bear losses arising from Kingtone Information’s operations
during the Entrusted Period;

    (d)         to
appoint executive director of Kingtone Information;

    (e)         to
appoint the legal representative, general manager, vice general manager,
financial manager and other senior managerial personnel of Kingtone
Information;

    (f)        
 to convene shareholders’ meetings of Kingtone Information in accordance
with the Shareholders’ Voting Rights Proxy Agreement and sign resolutions of
shareholders’ meetings; and 

    (g)       
 to enjoy other rights and perform other obligations under the
Agreement.


    
      
         


      

      
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      Article
3       Representations
and Warranties

    

    


    3.1      The
Parties hereto hereby make the following representations and warranties to each
other as of the date of this Agreement that:

    


    (a)         has
the right to enter into the Agreement and the ability to perform the
same;

    (b)         the
execution and delivery of this Agreement by each party have been
duly

    authorized
by all necessary corporate action;

    (c)         the
execution of this Agreement by the officer or representative of each party has
been duly authorized;

    (d)         each
party has no other reasons that will prevent this Agreement from  becoming
a binding and effective agreement between both parties after
execution;

    (e)         the
execution and performance of the obligations under this Agreement will
not violate any provision of the business license, articles of association
or other similar documents of its own;

    (f)
         violate any provision of
the laws and regulations of PRC or other governmental or regulatory authority or
approval;

    (g)         violate
or result in a breach of any contract or agreement to which the party is a party
or by which it is bound.

    


    3.2      The
Parties hereto agree that the execution of this Agreement by Xi’an TechTeam
Investment Holding Group Company, Shenzhen Capital Group Co., Ltd, Xi’an Hongtu
Capital Co., Ltd and Shaanxi Yuanxing Science and Technology Co., Ltd
(collectively, the “Institutional Shareholders”)
shall be on the condition that ReiZii Capital Management Ltd agrees to issue the
designated shares of ReiZii to the Institutional Shareholders or any third party
designated by them.

    


    3.3      Party
A and Party B agree that both parties will revise this Agreement to satisfy the
Kingtone Information’ needs at times in good faith and on a best effort
basis.

    


    
      Article
4       Effectiveness

    

    


    This
Agreement shall take effect after it is duly executed by the authorized
representatives of the parties hereto with seals affixed.

    


    
      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. 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.

    


    
      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.


    
      
         


      

      
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    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 twenty-four
copies. Each party shall hold one original for each version.

    


    (This
space intentionally left blank)


    
      
         


      

      
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    IN
WITNESS HEREOF, the Parties hereof have caused this Agreement to be executed by
their duly authorized representatives as of the date first written
above.

    


    PARTY
A:

     

    Li
Tao

     

    
      	(Signature):
    	/s/ Li
      Tao


    

     

    Chen
Xue Tao

    


    
      	(Signature):
    	/s/ Chen Xue
Tao


    

     

    Wang
Wan Jiao

    


    
      	(Signature):
    	/s/ Wang Wan
  Jiao


    

     

    Wu
Li

    


    
      	(Signature):
    	/s/ Wu
Li


    

     

    Pu
Wei

    


    
      	(Signature):
    	/s/ Pu
Wei


    

     

    Zhang
Yu Fan

    


    
      	(Signature):
    	/s/ Zhang Yu
Fan



      
        
           


        

        
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    Guo
Ming

     

    
      	(Signature):
    	/s/ Guo
    Ming


    

     

    Zhang
Wei

     

    
      	(Signature):
    	/s/ Zhang
    Wei


    

     

    Li
Jian Ping

     

      	(Signature):
    	/s/ Li Jian
      Ping


    

     

    Qin
Shu Ling

     

      	(Signature):
    	/s/ Qin Shu
      Ling


    

     

    Li
Jing

     

      	(Signature):
    	/s/ Li
    Jing


    

     

    Zhang
Xiao Ming

     

      	(Signature):
    	/s/ Zhang Xiao
      Ming


    

     

    Zhang
Xiao Bin


    
      
      

      
        	(Signature):
    	/s/ Zhang Xiao
      Bin


      

    

     

    Wang
Wei

     

    
      	(Signature):
    	/s/ Wang
    Wei


    


    
      
         


      

      
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    Zhang
Peng

     

    
      	(Signature):
    	/s/ Zhang
      Peng


    

     

    Xi
Peng Guo

     

    
      	(Signature):
    	/s/ Xi Peng
      Guo


    

     

    Chen
Xian Ying

     

    
      	(Signature):
    	/s/ Chen Xian
      Ying


    

     

    Ma
Jun

     

    
      	(Signature):
    	/s/ Ma
      Jun


    

     

    Xi’an
TechTeam Investment Holding Group Company

     

                       (Seal)

     

    Legal
Representative/Authorized Representative

     

    
      	(Signature):
    	/s/ Li
      Tao


    

     

    Shenzhen
Capital Group Co., Ltd

     

                       (Seal)

     

    Legal
Representative/Authorized Representative

     

    
      	(Signature):
    	/s/
      Jin Hai Tao


    


    
      
         


      

      
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    Xi’an
Hongtu Capital Co., Ltd

     

                       (Seal)

     

    Legal
Representative/Authorized Representative

    
       

      
        	(Signature):
    	/s/ Xia Fu
      Xi


      

    

     

    Shaanxi Yuanxing Science and
Technology Co., Ltd  

     

                       (Seal)

     

    Legal
Representative/Authorized Representative

     

    
      	(Signature):
    	/s/ Li
      Ke Chen


    

     

    Xi’an
Kingtone Information Technology Co., Ltd

     

                       (Seal)

     

    Legal
Representative/Authorized Representative

     

    
      	(Signature):
    	/s/ Li
      Tao


    


    
      
         


      

      
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    PARTY
B: Xi’an Softech Co., Ltd.

    


                       (Seal)

     

    Legal
Representative/Authorized Representative

     

    
      	(Signature):
    	/s/
      Wang Wan Jaio


    


    
      
         


      

      
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    Exhibit
A

     

    List
of Individual Shareholders

     

    
      
        
          	
                  Name

                	 
      	
                  ID Card Number

                	 
      	
                  Share Percentage

                
	 
      	 
      	 
      	 
      	 
      
	
                  Li
      Tao

                	 
      	
                  610103196511281613

                	 
      	
                  36.61%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Chen
      Xue Tao

                	 
      	
                  61010319710930165X

                	 
      	
                  8.93%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Wang
      Wan Jiao

                	 
      	
                  610104198109266162

                	 
      	
                  5.35%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Wu
      Li

                	 
      	
                  610111620918202

                	 
      	
                  1.09%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Pu
      Wei

                	 
      	
                  610104196910302123

                	 
      	
                  1.04%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Zhang
      Yu Fan

                	 
      	
                  610103196508063244

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Guo
      Ming

                	 
      	
                  610113195801080017

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Zhang
      Wei

                	 
      	
                  610103197802122043

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Li
      Jian Pin

                	 
      	
                  610103681102368

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Qin
      Shu Ling

                	 
      	
                  610113195503020446

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Li
      Jing

                	 
      	
                  420500197212035246

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Zhang
      Xiao Ming

                	 
      	
                  610113195303102930

                	 
      	
                  0.89%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Zhang
      Xiao Bin

                	 
      	
                  612325197911180016

                	 
      	
                  0.53%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Wang
      Wei

                	 
      	
                  610627198201080055

                	 
      	
                  0.38%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Zhang
      Peng

                	 
      	
                  622101196712220017

                	 
      	
                  0.36%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Xi
      Peng Guo

                	 
      	
                  610431197601031334

                	 
      	
                  0.36%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Chen
      Xian Ying

                	 
      	
                  610112750201523

                	 
      	
                  0.36%

                
	 
      	 
      	 
      	 
      	 
      
	
                  Ma
      Jun

                	
                    

                	
                  612728196803210253

                	
                    

                	
                  0.36%

                


        

      

    


    
      
         


      

      
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