Document:

Exhibit 10.11

BUSINESS OPERATION AGREEMENT

 

This Business Operation Agreement (hereinafter referred to as “this Agreement”) is entered into among the following parties in Dalian, People’s Republic of China (“China” or “PRC”) as of Oct. 12, 2010:

Party A: Dalian Xinding New Material Technology Consultancy Inc., with the registered address of Rm# 2122, Unit one, No. 112 Youhao Road, Zhongshan District, Dalian; and the legal representative of Liang Hai-yan;

Party B: Dalian Tongda Equipment and Technology Development Co., Ltd., with the registered address of  Youjia Village, Xinzhaizi Street, Ganjingzi District, Dalian; and the legal representative of Wang Yu-kai.

Party C: Yu-kai Wang, [Address and ID number redacted].

Party D: Di Wang, [Address and ID number redacted].

Party E: Li-zhi Fei, [Address and ID number redacted].

 

WHEREAS:

	
1.

	
Party A is a wholly foreign-owned enterprise duly incorporated and validly existing under the PRC law, which has the technology expertise and the practical experience on the R&D, manufacturing of equipment for new materials, especially the bimetal composite materials, and rich experience and professional technicians on that;

	
2.

	
Party B is a limited liability company duly incorporated and validly existing under the PRC law;

	
3.

	
Party C is a PRC citizen and the shareholder of Party B, holding 51% equity interests of Party B;

	
4.

	
Party D is a PRC citizen and the shareholder of Party B, holding 41.2% equity interests of Party B;

	
5.

	
Party E is a PRC citizen and the shareholder of Party B, holding 7.8% equity interests of Party B;

	
6.

	
The parties hereby agree to further clarify, through this Agreement, the matters in connection with Party B’s operation pursuant to provisions herein.

 

NOW, THEREFORE, through friendly negotiations and abiding by the principle of equality and mutual benefit, the Parties hereby agree as follows:

  

  

  

 

	
1.

	
To assure the performance of the various agreements between Party A and Party B and the payment of the payables accounts by Party B to Party A, Party B together with its shareholders Party C, Party D , and Party E hereby jointly agree that Party B shall not conduct any transaction which may materially affects its assets, obligations, rights or the company’s operation (excluding the business contracts, agreements, sell or purchase assets during Party B’s regular operation and the lien obtained by relevant counter parties due to such transactions) unless the obtainment of a prior written consent from Party A, including but not limited to the following contents:

	
  

	
1.1

	
to borrow money from any third party or assume any debt;

	
  

	
1.2

	
to sell to or acquire from any third party any asset or right, including but not limited to any intellectual property right;

	
  

	
1.3

	
to provide real guarantee for any third party with its assets or intellectual property rights;

	
  

	
1.4

	
to assign to any third party its business agreements.

	
2.

	
Party C ,Party D , and Party E, as Party B’s shareholders, further covenant that

	
  

	
2.1

	
not sell, transfer, pledge, dispose in any other manners of their equity interests of Party B or other interests, or not allow to create other security interests on it without Party A’s prior written consent, except for Party A and/or its designated person;

	
  

	
2.2

	
not to approve the shareholders’ resolution which may result in the Party B’s merger or combination with, buy or investment in, be purchased (other than Party A or its designated person) any other person without Party A’s prior written consent;

	
  

	
2.3

	
not do anything that may materially affect the assets, business and liabilities of Party B without Party A’s prior written consent; not, upon the execution of this Agreement, to sale, transfer, mortgage or dispose, in any other form, any asset, legitimate or beneficial interest of business or income of Party B, or to approve any other security interest set on it without prior written consent by Party A;

	
  

	
2.4

	
not to request Party B or approved at shareholder’s meeting to distribute dividends or profits to shareholders without Party A’s prior written consent;

	
  

	
2.5

	
not to supplement, amend or modify its articles of association, or to increase or decrease its registered capital, or to change the capital structure of Party B in any way without Party A’s prior written consent; and

	
  

	
2.6

	
agree to execute the Power of Attorney attached hereto as requested by Party A upon the execution of this Agreement and within the term of this Agreement.

	
3.

	
In order to ensure the performance of the various agreements between Party A and Party B and the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C , Party D , and Party E hereby jointly agree to accept, from time to time, the corporate policy advise and guidance provided by Party A in connection with the employment and dismissal of the company’s employees, company’s daily operating, financial management and so on.

  

  

  

	
4.

	
Party B together with its shareholders Party C , Party D , and Party E hereby jointly agree that Party C, Party D, and Party E shall appoint the person recommended by Party A as the directors of Party B, and Party B shall appoint Party A’s senior managers as Party B’s General Manager, Chief Financial Officer, and other senior officers. If any of the above senior officers leaves or is dismissed by Party A, he or she will lose the qualification to take any position in Party B and Party B shall appoint other senior officers of Party A recommended by Party A to assume such position. In this circumstance, the person recommended by Party A should comply with the stipulation on the statutory qualifications of directors, General Manager, chief financial controller, and other senior officers pursuant to applicable law.

	
5.

	
Party B together with its shareholders Party C, Party D, and Party E hereby jointly agree and confirm that Party B shall seek the guarantee from Party A first if it needs any guarantee for its performance of any contract or loan of flow capital in the course of operation. In such case, Party A shall have the right but not the obligation to provide the appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B in a timely manner and Party B shall seek a guarantee from other third party.

	
6.

	
In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B.

	
7.

	
Any amendment and supplement of this Agreement shall be made in writing. The amendment and supplement duly executed by all parties shall be deemed as a part of this Agreement and shall have the same legal effect as this Agreement.

	
8.

	
If any clause hereof is judged as invalid or non-enforceable according to relevant laws, such clause shall be deemed invalid only within the applicable area of the laws without affecting other clauses hereof in any way.

	
9.

	
Party B shall not assign its rights and obligations under this Agreement to any third party without the prior written consent of Party A; Party B hereby agrees that Party A may assign its rights and obligations under this Agreement as it needs and such transfer shall only be subject to a written notice sent to Party B by Party A, and no any further consent from Party B will be required.

	
10.

	
All parties acknowledge and confirm that any oral or written materials communicated pursuant to this Agreement are confidential documents. All parties shall keep secret of all such documents and not disclose any such documents to any third party without prior written consent from other parties unless under the following conditions: (a) such documents are known or shall be known by the public (excluding the receiving party discloses such documents to the public without authorization); (b) any documents required to be disclosed in accordance with applicable laws or rules or regulations of stock exchange; or (c) if any documents required to be disclosed by any party to its legal counsel or financial consultant for the purpose of the transaction of this Agreement by any party, such legal counsel or financial consultant shall also comply with the confidentiality as stated hereof. Any disclosure by employees or agencies employed by any party shall be deemed the disclosure of such party and such party shall assume the liabilities for its breach of contract pursuant to this Agreement. This Article shall survive whatever this Agreement is void, amended, cancelled, terminated or unable to perform.

  

  

  

	
11.

	
This conclusion, validity, performance and interpretation of Agreement shall be governed by the PRC law.

	
12.

	
The parties hereto 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 Shenyang Arbitration Commission in accordance with its then effective rules. The arbitration award shall be final conclusive and binding upon both parties. If there is any dispute is in process of arbitration, other than the matters in dispute, the Parties shall perform the other rights and obligation pursuant to this Agreement.

	
13.

	
This Agreement shall be executed by a duly authorized representative of each party as of the date first written above and become effective simultaneously.

	
14.

	
Notwithstanding Article 13 hereof, the parties confirm that this Agreement shall constitute the entire agreement of the parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous verbal and written agreements and understandings.

	
15.

	
The term of this agreement is ten (10) years unless early termination occurs in accordance with relevant provisions herein or in any other relevant agreements reached by all parties. This Agreement may be extended only upon Party A’s written confirmation prior to the expiration of this Agreement and the extended term shall be determined by Party A. During the aforesaid term, if Party A or Party B is terminated at expiration of the operation term (including any extension of such term) or by any other reason, this Agreement shall be terminated upon such termination of such party, unless such party has already assigned its rights and obligations in accordance with Article 9 hereof.

	
16.

	
This Agreement shall be terminated on the expiring date unless it is renewed in accordance with the relevant provision herein. During the valid term of this Agreement, Party B shall not terminate this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a thirty (30) days prior written notice to Party B.

	
17.

	
The original of this Agreement is in five (5) copies, each party holds one and all original are equally valid.

  

  

  

 

IN WITNESS THEREOF each party hereto have caused this Agreement duly executed by itself or a duly authorized representative on its behalf as of the date first written above.

 

Party A: Dalian Xinding New Material Technology Consultancy Inc.  (seal)

Authorized Representative:

Name:

Position:

 

Party B: Dalian Tongda Equipment and Technology Development Co., Ltd. (seal)

Authorized Representative:

Name:

Position:

 

Party C: Yu-kai Wang

Signature: /s/ Yu-kai Wang

 

Party D: Di Wang

Signature: /s/ Di Wang

 

Party E: Li-zhi Fei

Signature: /s/ Li-zhi Fei

 

  

  

  

 

Form of Power of Attorney

 

I , _________________, a PRC citizen and ID number of _________________, is the shareholder of Dalian Tongda Equipment and Technology Development Co., Ltd. (“Domestic Company”) holding ____% equity interest of Domestic Company, hereby irrevocably appoint _________________ with the following powers and rights during the term of this Power of Attorney:

 

I hereby appoint _________________ to exercise, on my behalf, all shareholder’s rights corresponding to the ____% equity interests of Domestic Company in accordance with PRC laws and Domestic Company’s Articles of Association at the shareholders’ meetings of Domestic Company, including but not limited to the right to call the shareholder’s meeting, accept the notice regarding the shareholder’s meeting and its agenda, participate in the shareholder’s meeting and exercise the voting right (including elect, designate or appoint the director, general manager, financial controller or other senior management personnel, the matters of distribution of dividend), to sell or transfer any or all of equity interests of Domestic Company.

 

Such authorization and appointment are based upon the precondition that _________________ is acting as an employee of Dalian Xinding New Material Technology Consultancy Inc. (“Wholly Foreign owned  Company”) and Wholly Foreign owned Company agrees in written such authorization and appointment. Once _________________ loses his title or position in Wholly Foreign owned Company or Wholly Foreign owned Company notifies of the termination of such authorization and appointment, I shall withdraw such authorization and appointment to him immediately and designate/authorize the other individual nominated by Wholly Foreign owned Company to exercise the full aforesaid rights on behalf of us at the shareholders’ meetings of Domestic Company.

 

The initial term of this Power of Attorney is from the execution date of this Power of Attorney through the duly existing term of Domestic Company unless the early termination of Operation Agreement jointly executed by Wholly Foreign owned Company and Domestic Company by any reason. If the term expires, upon the request by Wholly Foreign owned Company, I will extend the term of this Power of Attorney. Within the term of this Power of Attorney, this Power of Attorney shall not be revised or terminated without the consent of Wholly Foreign owned Company.

 

(Signature):

Date:Exhibit 10.12

 

Tenancy Agreement

 

Is made and entered

by and between

 

Party A (leaser):  Mr. An Bangjie

 

Party B (leasee):  Dalian Tongda Equipment

Technology Development Co., Ltd

  

  

  

 

In accordance to Contract Law of People's Republic of China and relevant regulations, and on bases of equality, willfulness and integrity, in consideration of mutual terms, parties hereto agree as follows:

 

Article I Leasing Area and Conditions

 

1-1 The office Party A agrees to lease to Party B rests in Youjiacun, Street Xinzhaizi, Ganjingzi District, Dalian City (hereinafter referred as Office). Office has floor area of 1500 m2, wherein plant is 750 m' and office rooms at Floor 2-4 total 750 m2 (see the drawing).

 

1-2 Party A as the owner of Office enters the transaction contemplated herein with Party B. Party A has presented the legitimated certificate of owning the Office, and fully informed Party B that the Office is free from any collaterals of any nature prior to signing the contract.

 

Article II Nature of Usage

 

2-1 Party A has checked and examined Party B's business license, qualifications of commercial operations and relevant operation scope. Party B represents and warrantees that the leased Office be used for mechanic manufacturing and administration, pertaining to required business operations and its nature of usage.

 

Article III Tenancy and Date of Delivery

 

3-1 Parties hereto agree that Party A shall deliver the Office and accompanied facilities (hereinafter referred as Facilities) no later than January 1s` 2008.

 

3-2 Tenancy lasts for five (5) years as of January 20th 2008 to January 19th 2013.

 

3-3 If the tenancy is matured and Party B decides not to reengage in the agreement, Party B shall return the Office and Facilities in due time. If Party B agrees to renew the agreement, Party B shall inform Party A with its leasing need in written form and one month prior to the tenancy maturity. Two parties shall reengage in the office leasing contract upon the consent of Party A.

 

Article IV Rental, Terms of Payment and Limitation

 

4-1 Parties hereto agree that the rental of plant floor area is Ұ180rmb/sq.m per year (net); and that of office rooms is Ұ100rmb/sq.m per year (net). Tenancy rental totals Ұ210,000rmb (net), say Twenty One Hundred Thousand RMB

 

4-2 Party B shall pay rentals as per following specifications — paying one year rental in advance at the time of contract signing and then the rental shall be paid every half year afterwards priced at Ұ105,000RMB every July 20th and January 20th .

 

Article V Office Usage and Obligations of Two Parties

 

5-1 Party A and Party B agree that if any damage or malfunction occurs to the Office or Facilities, Party A or providers of such damaged or malfunctioned Office/Facilities shall be obligated for maintenance at Party A's expenses. If the damage arises due to Party B's mal-operation or man-made faults, Party B shall be obligated for maintenance at Party B's expenses.

 

5-2 During the period of tenancy, parties hereto shall guarantee the workability and safety of Office and Facility in normal conditions, as per Agreement on Safety Production Control. When Party A conducts safety examination on the Office, Party B shall give full support. In case of any pitfalls threatening the safety of production from Party B's side, Party A shall have the right to inform Party B in written form and urge Party B to make improvement.

 

5-3 Party B shall bear the utility bills including water, electricity, heaters and phone calls at leasing level, since the effective date. Any expenses in connection with, among others, Party B's operation activities, economic disputes, debts, obligations, administrative fees and taxation shall be borne by Party B.

 

5-4 Party B may revamp, design or decorate the Office in line with business operation and subject to relevant regulations. Party B shall assume all the expenses and obligations incurred in case of any violation of foresaid regulations. If Party B desires to change Office appearance, Party B shall consult with Party B in advance.

 

5-5 Party B shall intensify its effort in aspects of fire protection, burglary caution and operation during the activities of Office decoration and operation. Accordingly, Party B shall process relevant procedures and bear fees incurred subject to state rules and regulations. Any damage or loss in Facilities, Equipment or injuries incurred due to poor administration shall be borne by Party B.

  

  

  

5-6 Party B shall not alter the nature of Office usage without the consent of Party A, nor sublet or transfer the Office or Facilities to any third party.

 

5-7 If Party B decides to revamp or decorate its leased Office, such activity shall not impact the smooth operation of utility system (water, electricity and heat) for the whole building.

 

Article VI Termination of Contract

 

6-1 Parties hereto mutually agree that either party may terminate the agreement herein in written form, if:

 

1) Party A fails to deliver the Office and Facilities in due time. And upon Party B urging, Party A still fails to deliver the foresaid within 10 days;

 

2) The Office or Facilities delivered by Party A fail to conform to the agreement herein, thus causing Party B's leasing intention hard to realize; or the Office or Facilities delivered contain the defects threatening safety production or fire protection;

 

3) Party A finds Party B fails to perform its responsibilities specified in Agreement on Safety Production Administration, thus generating safety-related pitfalls during the production. And after receiving written notification from Party A for remodeling, Party B still fails to make full improvement or refuse to improve.

 

4) Party B violates the Article V.

 

The party breaching the contract shall compensate the other party with twice the monthly rental. But if the loss incurred can't be covered by the compensation paid, the default party shall indemnify the spread between the loss and compensation.

 

6-2 Party B delays the payment of rental consecutively for three months without the consent of Party A.

 

6-3 Party B conducts illicit activities in the leased Office.

 

Article VII Contract Default

 

7-1 Parties hereto shall perform all the stipulations herein with greatest care, excluding force majeure (e.g. war, natural disaster, change of directory policy).

 

7-2 Party B shall notify Party A three months in advance if Party B need to terminate the agreement for some reason. Otherwise, Party B shall compensate Party A with twice the amount of monthly rental.

 

7-3 If Party A fails to inform Party B that the Office is collateralized or flawed in property transfer, thus causing the loss from Party B, Party A shall be obligated for the damages.

 

7-4 In case that Party B alters the construction structure of Office thus violating the technical rules or fire safety regulations — including power line modification, change of technical processes or alternation of productive facilities — at its discretion and without Party A's written consent or exceeding the scope wherein Party A agrees in written form, Party A shall have the right of requesting Party B to restore the Office and Facilities and to cover the damages incurred.

 

Article VIII Settlement of Dispute

 

8-1 The Agreement herein shall be governed by the laws and regulations of People's Republic of China.

 

8-2 Party A and Party B shall friendly negotiate over the disputes incurred during the contractual performance. If negotiation fails to work, any party may subject itself to Dalian Economic Contract Arbitration Committee for mediation or arbitration, or to sue in local people's court where leased Office is located.

  

  

  

Article IX Miscellaneous

 

9-1 Plant area and office room area shall be confirmed by the signatures of Party A and Party B;

 

9-2 Party A shall assist Party B to issue all or part of lease invoices in accordance with rental regulations.

 

9-3 Facilities in the Office include:

 

9-3.1 10 ton-weighed gantry crane in the Plant

 

9-3.2 Power capacity no less than 200KVA in the Plant

 

9-3.3 Access to electricity and drinking water in the plant or Office, establishment of water supply line and sewage.

 

9-3.4 Greenness and appearance improvement on the Plant ground

 

9-3.5 Walls of Plant and Office shall be built as per the industrial standards.

 

9-4 For any unsettled maters herein, Parties hereto may otherwise negotiate and sign supplemental agreement. In case of any conflicts between supplemental agreement and the agreement herein, the supplemental agreement shall prevail. Supplemental agreement shall constitute inseparable part of the agreement herein as a whole, with equal law-binding effect.

 

9-5 Parties hereto has the best knowledge of the agreement, obligations and relevant rights when signing. Both parties voluntarily perform the agreement with greatest care. In any case of violation, the party free from blame shall be entitled to claim the indemnification as per the agreement herein.

 

9-6 The agreement enters into full force as of the date of contract signing.

 

9-7 The agreement is made in duplicates, one for each party, each of which shall be deemed with equal force.

 

	
Party A: Mr. An Bangjie

	  	
Party B: Dalian Tongda Equipment

	
21021 1 195702285517

	  	
Technology Development Co., Ltd.

	  	  	  
	
Domicile: No. 27 Quanqing Park, Huanghe

	  	
Domicile: Youjiacun, Xinzhaizi Street,

	
Road, Shahekou District, Dalian City

	  	
Ganjingzi District, Dalian City

	  	  	  
	
Post Code: 116021

	  	
Post Code: 116600

	  	  	  
	
Contact: 13332220887

	  	
Contact: 66881731

 

Signature: Legal/Authorized Representative:_______________Signature: Legal/Authorized Representative

  (Under Seal)                                                                                  (Under Seal)

 

Date:January 20, 2008                                                                 Date: January 20, 2008

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