Document:

Unassociated Document

ENTRUSTED MANAGEMENT AGREEMENT

BETWEEN

GUO JIAFU

WU FENG

MU XIANGJU

CHONGQING JIAFU HEALTH INDUSTRY CO., LTD.

AND

WUHAN KANGFU CONSULTING AND MANAGEMENT CORPORATION

JANUARY 2011

CHONGQING CHINA

  

  

  

 

Entrusted Management Agreement

This Entrusted Management Agreement (the “Agreement”) is entered into on January 18, 2011, in Chongqing, China by:

Party A:

1      Guo Jiafu, a citizen of PRC with Identity Card number of 510225196905170334, owns 60% share equity of Chongqing Jiafu Health Industry Co., Ltd. ;

2      Wu Feng, a citizen of PRC with Identity Card number of 420107195708231033, owns 20% share equity of Chongqing Jiafu Health Industry Co., Ltd. ;

3      Mu Xiangju, a citizen of PRC with ID Card number of 110102194711011120, owns 20% share equity of Chongqing Jiafu Health Industry Co., Ltd. ;

4      Chongqing Jiafu Health Industry 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 500381000011525 and the legal registered address is No.8 of 1/F, Block C, Ronghua Guangcai Mansion, Binjiang West, Jijiang Sub-district Office, Jiangjin District of Chongqing City

and

Party B:

Wuhan Kangfu Consulting and Management Corporation is a wholly foreign-owned enterprise incorporated in PRC.

Whereas:

	
  

	
1

	
Party A constitutes Chongqing Jiafu Health Industry Co., Ltd.  (hereinafter referred to as “Opco”) and all of its shareholders holding all share equity of Opco. Under this Agreement, Opco, Guo Jiafu, Wu Feng and Mu Xiangju have acted collectively as one party to this Agreement;

	
  

	
2

	
Wuhan Kangfu Consulting and Management Corporation (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.

	
  

	
3

	
Party A desires to entrust Party B to manage and operate Opco;

	
  

	
4

	
Party B agrees to accept such entrustment and to manage Opco 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 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.

	
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:

           (1)  the winding up of Opco, or

           (2)  the date on which Party B completes the acquisition of Opco.

	
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:

	
  

	
(1)

	
Party B shall be fully and exclusively responsible for the operation of Opco, which includes the right to appoint and terminate all members of the board of directors and the right to hire managerial and administrative personnel etc. Party A or its voting proxy shall make a shareholders’ resolution and a board of directors’ resolution based on the decision of Party B.

	
  

	
(2)

	
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 account(s) or designate one or more existing account(s) as the entrusted account(s). Party B has the full and exclusive right to decide the use of the funds in the entrusted account(s). The authorized signature of the account(s) shall be appointed or confirmed by Party B. All of the funds of Opco shall be kept in the entrusted account(s), 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 account(s), 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 account(s).

	
  

	
(3)

	
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.

  

  

  

  

	
1.4

	
Party B has right to provide the quarterly statement of account to Opco pursuant to the price recognized by the Parties and the working amount provided by Party B, and Party B has right to collect the relevant entrusted management fee from Opco pursuant to the date and amount indicated in the statement of account. Party A and Party B may make other arrangements on the payment of entrusted management fee at any time through the mutual consent. Both Parties further agree that, Opco shall pay for the due service fee first in accordance with the Exclusive Technology Service Agreement executed by and between Opco and Party B on January 18, 2011, in Chongqing, before Opco pays for the entrusted management fee to Party B.

	
1.5

	
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.

Article 2        Rights and Obligations of the Parties

2.1  During the term of this Agreement, Party A’s rights and obligations include:

	
  

	
(1)

	
to hand over Opco 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 Opco to Party B;

	
  

	
(2)

	
Party A has no right to make any decision regarding Opco’s operations without the prior written consent of Party B;

	
  

	
(3)

	
to have the right to know the business conditions of Opco at any time and provide proposals;

	
  

	
(4)

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

	
  

	
(5)

	
to perform its obligations pursuant to the Shareholders’ Voting Rights Proxy Agreement, signed by and between Guo Jiafu, Wu Feng, Mu Xiangju and Party B on January 18, 2011, in Chongqing, and not to violate the said agreement;

	
  

	
(6)

	
not to intervene Party B’s management over Opco in any form by making use of shareholder’s power;

  

  

  

 

	
  

	
(7)

	
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;

	
  

	
(8)

	
not to otherwise entrust other third party other than Party B to manage Opco in any form without Party B’s prior written consent;

	
  

	
(9)

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

	
  

	
(10)

	
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:

	
  

	
(1)

	
to enjoy the full and exclusive right to manage Opco independently;

	 	
  (2)

	
  to enjoy the full and exclusive right to dispose of all assets of Opco;

	
  

	
(3)

	
to enjoy all profits and bear losses arising from Opco’s operations during the Entrusted Period;

	
  

	
(4)

	
to appoint directors of Opco;

	
  

	
(5)

	
to appoint the legal representative, general manager, deputy general manager, financial manager and other senior managerial personnel of Opco;

	
  

	
(6)

	
to convene shareholders’ meetings of Opco in accordance with the Shareholders’ Voting Rights Proxy Agreement and sign resolutions of shareholders’ meetings; and

	 	
  (7)

	
  to enjoy other rights and perform other obligations under the Agreement.

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:

	
  

	
(1)

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

	
  

	
(2)

	
the execution,delivery and performance of this Agreement by each party have been duly authorized by all necessary corporate actions;

	
  

	
(3)

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

  

  

  

 

	
  

	
(4)

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

	
  

	
(5)

	
the execution and performance of the obligations under this Agreement will not:

(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.

 

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.

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.

 

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 5 copies.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK) 

  

  

  

 

In witness hereof, this Agreement is duly executed by the parties hereto on the date first written above.

Party A:

Guo Jiafu

(signature): /s/ Guo Jiafu

Wu Feng

(signature) : /s/ Wu Feng

Mu Xiangju

(signature) : /s/ Mu Xiangju

Chongqing Jiafu Health Industry Co., Ltd. 

(official seal)  Company seal imprinted

Authorized representative:

(signature)     /s/ Guo Jiafu

Party B:

Wuhan Kangfu Consulting and Management Corporation

 (official seal) Company seal imprinted

Authorized representative:

(signature)      /s/ Wu FengUnassociated Document

 

SHAREHOLDERS' VOTING

PROXY AGREEMENT

BETWEEN

GUO JIAFU

WU FENG

MU XIANGJU

AND

WUHAN KANGFU CONSULTING AND MANAGEMENT

CORPORATION

JANUARY 2011

CHONGQING CHINA

 

  

  

  

 

Shareholders’ Voting Proxy Agreement

 

This Shareholders’ Voting Proxy Agreement (the “Agreement”) is entered into as of January 18, 2011, between the following parties in Chongqing:

Party A:

	
1.

	
Guo Jiafu

A citizen of PRC, Identity Card Number: 510225196905170334

	
2.

	
Wu Feng

A citizen of PRC, Identity Card Number: 420107195708231033

	
3.

	
Mu Xiangju

A citizen of PRC, Identity Card Number: 110102194711011120

and,

Party B:

Wuhan Kangfu Consulting and Management Corporation

In this Agreement, Party A and Party B are called collectively as the “Parties,” and each of them is called as the “Party”. Party A is collectively called the “Grantors” and respectively called “Each of the Grantors”.

WHEREAS:

	
1.

	
Party B is a wholly foreign-owned enterprise incorporated under the laws of the People’s Republic of China;

	
2.

	
As of the date of this Agreement, the Grantors are shareholders of Chongqing Jiafu Health Industry Co., Ltd. (the “Opco”) and collectively hold all of the share equity of Opco;

	
3.

	
Each of the Grantors desires to appoint the persons designated by Party B to exercise its shareholder’s voting rights at the shareholders’ meeting of Opco (“Voting Rights”) and Party B is willing to designate such persons.

NOW THEREFORE, the Parties hereby have reached the following agreement upon friendly consultations:

	
Article 1.

	
Each of the Grantors hereby agrees to irrevocably appoint the persons designated by Party B with the exclusive right to exercise, on his behalf, all of his Voting Rights in accordance with the laws and Opco’s Articles of Association, including but not limited to the rights to sell or transfer all or any of his share equity of Opco, and to appoint and elect the directors and Chairman/Executive Director as the authorized legal representative of Opco.

 

  

- 1 -

  

 

	
Article 2.

	
The persons designated by Party B shall be members of the board of Party B (the “Proxy Holders”). All Parties agree that all directors of Opco shall be nominated and appointed by the Proxy Holders according to the direction of Party B.

	
Article 3.

	
Party B agrees to designate such Proxy Holders pursuant to Article 1 of this Agreement, who shall represent each of the Grantors to exercise his Voting Rights pursuant to this Agreement.

	
Article 4.

	
All Parties to this Agreement hereby acknowledge that, regardless of any change in the share equity of Opco, Each of the Grantors shall appoint the person designated by Party B with all Voting Rights. All Parties to this Agreement agree, Party A, can not transfer his/her share equity (the “Transferor”) of Opco to any individual or company other than Party B or the individuals or entities designated by Party B.

	
Article 5.

	
Each of the Grantors hereby acknowledges that he/she will withdraw the appointment of the persons designated by Party B if Party B change such designated person and reappoint the substituted persons designated by Party B as the new Proxy Holders to exercise his/her Voting Rights at the shareholder’s meeting of Opco.

	
Article 6.

	
All authorizations made under this Agreement shall be conclusive and binding upon the Grantors and each and every act and thing effected by the Proxy Holders pursuant hereto shall be as good, valid and effectual as if the same had been done by the Grantors. The Grantors hereby irrevocably and unconditionally undertake at all times hereafter to ratify and confirm whatsoever the Proxy Holders shall lawfully do or cause to be done by virtue of all such authorizations conferred by this Agreement.

	
Article 7.

	
The Grantors hereby irrevocably and unconditionally undertake at all times to indemnify and keep indemnified each of the Proxy Holders against any and all actions, proceedings, claims, costs, expenses and liabilities whatsoever arising from the exercise or purported exercise of any of the powers conferred or purported to be conferred by this Agreement.

	
Article 8.

	
This Agreement has been duly executed by the parties’ authorized representatives as of the date first set forth above and shall become effective upon execution.

	
Article 9.

	
This Agreement shall not be terminated prior to the completion of acquisition of all of the share equity in, or all assets or business of, Opco by Party B;

	
Article 10.

	
Any amendment and termination of this Agreement shall be in written and agreed upon by the Parties.

 

  

- 2 -

  

 

	
Article 11.

	
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 12.

	
The Parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation. In case no settlement can be reached through consultation within thirty (30) days after such dispute is raised, each party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”) in Beijing in accordance with its rules then in effect. The arbitration shall take place in Beijing. The arbitration award shall be final, conclusive and binding upon both parties.

 

	
Article 13.

	
This Agreement is executed in both Chinese and English in 5 copies; each Party holds one and each original copy which has the same legal effect. Both the English version and Chinese version shall have the same effect.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

  

- 3 -

  

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:

Guo Jiafu

(signature):  /s/ Guo Jiafu

Wu Feng

(signature):  /s/ Wu Feng

Mu Xiangju

(signature): /s/ Mu Xiangju

Party B:

Wuhan Kangfu Consulting and Management Corporation

(seal) Company seal imprinted

Authorized representative:

(signature)              /s/ Wu Feng

This Agreement is agreed and accepted by Chongqing Jiafu Health Industry Co., Ltd.

	  	
(seal): Company seal imprinted

	  
	  	  	  
	  	
Authorized representative:

	  
	  	
(signature)       /s/ Guo Jiafu

	  

  

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