Document:

ex_131646.htm

Exhibit 10.1

 

 

DCP HOLDING COMPANY

EMPLOYMENT AGREEMENT

 

 

This Agreement (this “Agreement”) is entered into effective as of January 1, 2019 (the “Effective Date”), by and between DCP Holding Company, an Ohio corporation, with its principal offices at 100 Crowne Point Place, Cincinnati, Ohio 45241 (“Company”), and Jodi Fronczek (“Employee”).

In consideration of the mutual obligations and promises contained herein, and intending to be legally bound, the parties hereto agree as follows:

 

1.     EMPLOYMENT. Company hereby employs Employee as an employee of Company and Employee hereby accepts such exclusive employment under the terms and conditions of this Agreement.

 

2.     TERM. Subject to the provisions in Section 7 hereof, the term of employment shall continue after the Effective Date for a period of one (1) year ending on December 31, 2019, and shall be automatically extended for successive one (1) year periods on the same terms and conditions as stated herein, unless on or prior to November 15th of any year either party provides written notice to the other party of termination of this Agreement, effective upon the expiration of the current one-year term.

 

3.     OFFICE AND DUTIES. During the term of his employment hereunder, Employee shall serve in the capacity of Chief Operations Officer of the Company. In such capacity, Employee shall do all things necessary and incident to this position and otherwise shall perform such functions as the President and CEO of the Company may establish from time to time commensurate with Employee’s skill, position and background as reasonably determined by the President and CEO. The performance of the duties hereunder shall be performed at such reasonable time and places as shall be determined by the President and CEO. The Employee shall report directly to the President and CEO. A description of the current duties is attached hereto as Exhibit A.

 

4.     COMPENSATION AND BENEFITS. In consideration for Employee’s performance of services and the non-competition provisions as described below, and subject to modifications as may be approved from time to time by Company and Employee, Employee shall receive, during the term of this Agreement, compensation and benefits as follows:

 

(A)     Base Salary. Employee shall be paid a base annual salary in accordance with the regular payroll practices of the Company and Exhibit B of this Agreement. Employee’s base annual salary for 2019 and all subsequent years of the term of this Agreement shall not be less than $189,477.00 or such higher amount as is reflected on subsequent agreed revisions of Exhibit B.

 

(B)     Bonus. Employee will be eligible to receive an annual bonus equal to between 10% and 34% of annual base salary pursuant to the Annual Incentive Plan and a cash award pursuant to the Long Term Incentive Plan in accordance with Exhibit B of this Agreement, as revised on an annual basis.

 

(C)     Employee Benefits. Employee will be eligible to participate in all health, welfare, insurance and other benefits available to all other employees of the Company.

 

(D)     Vacations. Employee shall be entitled to vacation and personal time in accordance with the Company’s PTO policy as it exists from time to time. Employee will not be permitted to receive cash in lieu of unused PTO hours except in the event of the employee’s termination.

 

 

 

 

(E)     Payroll Withholdings. Employee authorizes the Company to deduct from any payment made pursuant to Section 4 hereof all amounts required to be withheld by federal, state and/or local taxing authorities.

 

(F)     Annual Performance Review. The Employee’s performance of his duties under this Agreement shall be reviewed by the President and Chief Executive Officer at least annually and finalized within thirty (30) days of the receipt of the annual audited financial statements. The President and CEO shall additionally review the base salary, bonus and benefits provided to the Employee under this Agreement and may, in his discretion, recommend the adjustment of same, as outlined in Addendum B of this Agreement, with such adjustment subject to the approval of the Board of Directors or a committee of the Board of Directors; provided, however, that Employee’s annual base salary shall not be less than the base salary set forth in Section 4(A) hereof.

 

5.     EXPENSES. Company shall pay or reimburse Employee for all travel and out-of-pocket expenses reasonably incurred or paid by Employee in connection with the performance of his duties upon presentation of expense statements or receipts or such other supporting documentation as the Company may reasonably require.

 

6.     OUTSIDE EMPLOYMENT. Employee shall devote his full time and attention to the performance of the duties incident to his position with the Company, and shall not have any other employment with any other enterprise or substantial responsibility for any enterprise which would be inconsistent with Employee’s duty to devote his full time and attention to Company matters without the prior consent of the President and CEO.

 

7.     TERMINATION AND SEVERANCE PAY.

 

(A)     Death. This Agreement shall be terminated on the death of Employee, effective as of the end of the month in which his death occurs.

 

(B)     Disability. This Agreement may be terminated, at the option of the Company, if, because of a disability, Employee is unable to perform his job responsibilities after reasonable accommodations. This section will be applied consistent with the Company’s obligations under applicable federal and state law, including the Americans with Disabilities Act Amendments Act.

 

(C)     Termination – Good Cause. Nothing in this Agreement shall be construed to prevent the Company from terminating Employee’s employment hereunder for good cause (“Good Cause”) at any time. For this purpose, Good Cause shall include the following: alcohol or other drug dependence or addiction; conviction for any crime involving moral turpitude; fraud or misrepresentation; material neglect of duty; misappropriation, embezzlement or theft of Company funds or property; conduct which is materially injurious to the reputation, business or business relationships of the Company; or material violation of Company policy or any of the provisions of this Agreement. The effective date of such termination for Good Cause shall be the date of receipt by Employee or his legal representative of written notice of the termination stating the full basis for such cause or such later date as may be specified in such notice. Termination of Employee’s employment for Good Cause shall not constitute a breach of this Agreement and Employee shall not be entitled to any compensation arising on or after the effective date of such termination. In the event the Company is sold, transferred and/or merged with or to another entity, it shall not be deemed an event of Good Cause to terminate Employee, and if the new entity elects to retain Employee, Employee may be terminated without Good Cause only in accordance with Section 7(D) of this Agreement.

 

 

 

 

(D)     Termination Without Good Cause – Severance Pay. The Company may, by action of the Board, terminate this Agreement without Good Cause upon the payment of the amounts described in this paragraph. If, and only if, the Company terminates this Agreement either (i) in accordance with the notice provision of Section 2 or (ii) at any time during the term of this Agreement without Good Cause, then the Employee shall be entitled to severance pay as determined herein. Employee shall receive twelve months (12) months of severance pay, and one (1) month of severance pay shall equal one month of the Employee’s base salary as in effect on the date of termination. The Company shall pay such severance pay consistent with the Company’s severance policy and practice, as it exists from time to time. All bonuses to which Employee would otherwise be eligible during the year in which an Employee’s employment is terminated shall be pro-rated through the date of termination, regardless of whether such benefit is deemed to accrue or be payable after the date of termination. Moreover, during the stated severance pay period, Employee shall continue to receive the medical and dental benefits offered by the Company referenced in Section 4(C), but not any benefits described in Section 4(D).

 

(E)     Termination – Good Reason. Employee’s employment with the Company may also be terminated by the Employee for Good Reason. “Good Reason” means a material breach by the Company of any compensation related provision of this Agreement, which breach is not cured by the Company within thirty (30) days after the Company receives written notice thereof from the Employee. In the event Employee terminates employment for Good Reason, she shall be entitled to severance pay and benefits as provided for in Section 7(D) above.

 

8.     CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges that information gained by Employee while employed by the Company, including without limitation that concerning the Company’s customers, suppliers and participating providers, and the methods, techniques, devices and operations of the Company, as they may exist from time to time, are of a confidential nature and are valuable, special and unique assets of the Company’s business. Employee shall not, during the term of or after the termination of employment, disclose in any way any such confidential information to any person, firm, corporation or any other operation or entity, or use the same on the Employee’s own behalf, for any reason or purpose. Upon termination of employment, the Employee shall deliver up to the Company all lists of the Company’s customers, suppliers and participating providers, and all copies thereof (including without limitation electronically stored information), and all notes, records, memoranda, complete correspondence files and other papers, and all copies thereof (including without limitation electronically stored information) relating to the methods, techniques, devices and operations of the Company, and the Employee does not have, nor can Employee acquire, any property right therein or claim thereto or in the underlying confidential information. The parties acknowledge that the Employee has substantial skills and experience as an executive which have been enhanced during the period of his employment by the Company. The intent of this Section 8 is not to preclude Employee from using such skills and experience in other permitted employment, but only to preclude the use of those methods, techniques, devices and operations which are unique or proprietary to the Company.

 

9.     DIVERSION OF BUSINESS. The Employee shall not, during the period of employment by the Company and for a period ending twelve (12) months following termination of employment (for any reason), either for the Employee or on behalf of any person, firm, corporation or any other operation or entity, directly or indirectly:

 

(A)     Divert or attempt to divert from the Company any business whatsoever by influencing or attempting to influence, or soliciting or attempting to solicit any of the customers or participating providers of the Company with whom Employee may have dealt at any time or who were customers or participating providers of the Company on the date of termination of the Employee’s employment or had been customers or participating providers of the Company prior thereto; or

 

 

 

 

(B)     Divert or attempt to divert from the Company any person employed by the Company by influencing or attempting to influence such person to leave the Company’s employ.

 

10.     NON-COMPETITION AGREEMENT. For a period ending twelve (12) months from the termination of Employee’s employment with the Company for any reason, Employee hereby agrees that she will not, directly or indirectly render any services as an officer, director, employee, agent, consultant or in any other capacity to, or own any interest (other than an interest of less than five percent (5%) of the stock or a publicly held company), as an individual owner, stockholder, partner or in any other manner in any person, firm, corporation, partnership or other entity which is a competitive business (“Competitive Business”) in any standard metropolitan statistical area in which the Company has customers or has a Certificate of Authority to do business at the time of such termination.

 

For the purpose of this Agreement, Competitive Business shall mean any business operation (including a sole proprietorship), which engages in, as all or a significant part of its business, the business of a dental insurance company or engages in any other business in competition with the Company in any geographic area in which the Company then operates.

 

11.     ACKNOWLEDGMENT. The Company and Employee each hereby acknowledge and agree as follows:

 

(A)     The covenants, restrictions, agreements and obligations set forth herein are founded upon valuable consideration, and with respect to the covenants, restrictions, agreements and obligations set forth in Sections 9 and 10 hereof, are reasonable in duration and geographic scope;

 

(B)     In the event of a breach or threatened breach by Employee of any of the covenants, restrictions, agreements and obligations set forth herein, monetary damages or the other remedies at law that may be available to the Company for such breach or threatened breach will be inadequate and, without prejudice to the Company’s right to pursue any remedies at law or in equity available to it for such breach or threatened breach, including, without limitation, the recovery of damages from Employee, the Company will be entitled to injunctive relief; and

 

(C)     In the event that the covenant not to compete contained in Section 10 is the subject of an arbitration dispute pursuant to Section 16 and is found to be invalid or unenforceable as to such time period and/or geographical area, it will be valid and enforceable in such geographical area(s) and for such time period(s) which the arbitrator(s) determine to be reasonable and enforceable. Furthermore, any period of restriction or covenant herein stated shall not include any period of violation or period of time required for arbitration or litigation to enforce such restriction or covenant.

 

12.     .INDEMNIFICATION. Company shall indemnify and defend Employee for acts or omissions performed by the Employee in the scope of his employment and in a manner reasonably believed to be lawful providing that Employee’s acts or omission do not constitute gross negligence, recklessness, willful misconduct, or the intentional infliction of harm.

 

13.     .ASSIGNMENT, SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and assigns. The Company shall assign or otherwise transfer its rights under this Agreement to any successor or affiliated business or corporation (whether by sale or stock, merger, consolidation, sale of assets or otherwise), but this Agreement may not be assigned, nor may the duties hereunder be delegated, by Employee. In the event that the Company assigns or otherwise transfers its rights under this Agreement to any successor or affiliated business or corporation (whether by sale of stock, merger, consolidation, sale of assets or otherwise), for all purposes of this Agreement, the “Company” shall then be deemed to include the successor or affiliated business or corporation to which the Company assigned or otherwise transferred its rights hereunder. Should an ownership transfer event as described above occur, the Company may choose to terminate this Agreement, in which case Section 7(D) (Termination Without Good Cause – Severance Pay) would apply. Such action will not be deemed a Termination for Good Cause.

 

 

 

 

14.     NOTICE. Any notice required or which may be given under the provisions of this Agreement shall be in writing and shall be personally delivered or sent by certified mail, return receipt requested. All notices shall be deemed to have been given on the date personally delivered or, if mailed, on the date received or three (3) business days after the date of mailing, whichever is earlier. If mailed to Company, such notice shall be mailed to its then principal office. If mailed to Employee, it shall be addressed to Employee’s home address then shown on Company’s records.

 

15.     GOVERNING LAW. This Agreement shall be subject to, governed by and interpreted in accordance with the laws of the State of Ohio without regard to its rules as to conflicts of laws.

 

16.     ARBITRATION OF DISPUTES. All disputes and controversies of every kind and nature between the Company and Employee arising out of or in connection with this Agreement, including, but not limited to, the existence, validity, interpretation or meaning, performance or nonperformance, breach, continuance, termination, or any claim of discrimination by the Employee, shall be submitted to arbitration with the American Arbitration Association in Hamilton County, Ohio in accordance with its procedures and guidelines. The parties hereby agree that the decision of such arbitration shall be a binding and final decision upon the parties.

 

17.     SEVERABILITY. Each of the provisions of this Agreement shall stand independently and severally, and the invalidity of any one Section or portion thereof shall not affect the validity of any other Section. In the event any Section or portion thereof shall be construed to be invalid, no other Section of this Agreement shall be affected thereby.

 

18.     SURVIVAL. Any provision of the Agreement which imposes an obligation after termination of employment under this Agreement shall survive the termination of employment hereunder and shall be binding upon the parties hereto.

 

19.     ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding between the Company and Employee and shall supersede all prior oral or written statements of any kind whatsoever made by the parties with respect to the subject matter hereof, including the Long Term Compensation Agreement, dated the Effective Date, between the parties. No statement subsequent to this Agreement purporting to modify any of its terms and conditions shall be binding unless expressly agreed to in writing and signed by both the Company and Employee. The foregoing restrictions shall not apply with respect to any change by the Company of the Employee’s compensation or benefits pursuant to Section 4 or to any change in the Employee’s title or duties to which Employee has acquiesced or consented.

 

20.     WAIVER. No waiver by either party of any breach of this Agreement by the other party shall operate or be construed as a waiver of any subsequent breach of the same or any other provision. No waiver shall be effective unless in writing.

 

 

 

 

IN WITNESS WHEREOF, the parties have hereunto set their hands effective as of the Effective Date.

 

	
			EMPLOYEE: Jodi Fronczek

				
			COMPANY: DCP Holding Company

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			/s/ Jodi Fronczek                   

				
			By: 

				/s/ Anthony A. Cook	
			 

			
	
			Jodi Fronczek

				
			 

				
			Anthony A. Cook, MS, MBA

			President and CEO

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	Date:       12/10/2018            	Date:	12/10/2018	 

 

 

 

 

EXHIBIT “A”

DCP HOLDING COMPANY POSITION DESCRIPTION

	POSITION TITLE:   	Chief Operations Officer
	REPORTS TO:   	President and Chief Executive Officer
	
			PURPOSE:

				
			Develops operating strategy for the company in enrollment and billing, claims and customer service, product development and credentialing. Works with marketing and the President to design and develops new dental and other insurance products; to revise and maintain the existing products of current membership, adapt customer service and claims to support new products. With the President develops and directs operating strategies for providers including working with the Clinical Affairs Committee.

			

DUTIES AND RESPONSIBILITIES:

	 	
			1.

				
			Develops, directs and manages the work of the product development manager in developing new products and their support needs in IT, regulatory environments, coding and benefit plan development.

			

	 	
			2.

				
			Provide consultative services to the President and CEO relative to new benefits, benefit design, and business issues related to DCPG’s dental products.

			

	 	
			3.

				
			Oversee the Director of Regulatory Compliance and DCPG relationship with various regulatory insurance agencies relative to filings, benefits, forms, evidence of coverage and other issues to assure compliance with local, state and federal insurance issues.

			

	 	
			4.

				
			Oversees and develops policies and certificates needed to support the development of new, fully insured products; revise and maintain existing policies and certificates to reflect changes in fully insured products.

			

	 	
			5.

				
			Oversees and develops plan documents and summary plan descriptions needed to support the development of new products in conjunction with the self-funded groups.

			

	 	
			6.

				
			Oversees, develops and maintains the aQden software system, the programming necessary for all benefit plans, including fully insured and self-funded plans across all products and licenses.

			

	 	
			7.

				
			Works with the manager of product development to assist staff members of the Sales Department in developing new products; provide consultative services to all groups within DCPG to assure the profitable performance of newly designed products.

			

	 	
			8.

				
			Works with the Director of Operations to test the system’s design of new products to insure the accurate payment of claims and providers; test the designs to assure efficient adjudication of claims.

			

	 	
			9.

				
			Oversees the activities of the Director of Operations to support the department ensuring that the performance of the department meets expectations for claims throughput, timeliness of payment and measures of phone support including time to answer, abandon rates and quality of service.

			

	 	
			10.

				
			Serve as system and operational consultant to other DCPG departments in directing and assuring successful implementation of changes to the aQden and related systems.

			

	 	
			11.

				
			In collaboration with Director of Operations, support the development of training for staff members of Customer Service & Claims Processing regarding new products and software updates.

			

	 	
			12.

				
			Maintain fee schedules and support the analysis of the schedules to assure that providers are fully and accurately reimbursed for their services.

			

	 	
			13.

				
			Serve as DCPG liaison on all issues to go before the Clinical Affairs Committee of DCPG’s Board of Directors.

			

	 	
			14.

				
			Review and respond to all appeals of denied benefits for both fully-insured and self-insured plans.

			

	 	
			15.

				
			Modify CDT-codes in DCPG systems as updated by the American Dental Association.

			

 

 

 

 

EXHIBIT “B”

 

ADDENDUM TO DCP HOLDING COMPANY CHIEF OPERATIONS OFFICER AGREEMENT

 

The salary range of the Chief Operations Officer shall be reviewed and adjusted annually as recommended by the President and CEO and approved by the Compensation and Benefits Committee of the Board of Directors. The Base Compensation for 2019 shall be $189,477.00.

 

	
			ANNUAL INCENTIVE PLAN

				 	 	
			Value

				 
	
			CASH AWARD

				 	 	 	 	 
	
			Threshold

				
			10% of Base

				 	$	18,948.00	 
	
			Target

				
			18% of Base

				 	$	34,106.00	 
	
			Stretch

				
			26% of Base

				 	$	49,264.00	 
	
			Maximum

				
			34% of Base

				 	$	64,422.00	 
	 	 	 	 	 	 
	
			LONG TERM INCENTIVE PLAN

				 	 	 	 	 
	A) CASH AWARD 	5% of Base	 	$	9,474.00	 

 

 

2019 ANNUAL LONG TERM INCENTIVE BONUS DETAIL

 

A.           Cash Award – Retention Based

The cash award for DCP’s Chief Operations Officer is subject to the “Dental Care Plus and DCP Holding Company Deferred Compensation Plan”. A cash bonus is awarded in an amount equal to five percent (5%) of base salary and is considered “Long Term” as it vests incrementally over four years, 10% on December 31 of the first year, 20% at the end of the second year, 30% at the end of the third year and 40% at the end of the fourth year. There are no performance targets other than longevity with the Company.

 

	
			CASH AWARD BASED ON 5% OF BASE SALARY OF $189,477.00

				 	$	9,474	 

 

 

 

 

2019 ANNUAL INCENTIVE SHORT TERM BONUS DETAIL

 

The Annual Incentive (Short Term Bonus) compensation is designed to motivate the Chief Operations Officer to meet and/or exceed goals for budget performance on 1) 2019 Operating Revenue (OR), 2) 2019 Adjusted Net Operating Income (ANOI), and 3) Discretion/MOB (MOB). The Chief Operations Officer’s individual goals are established by the President and CEO and approved by the Corporate Affairs Committee. Achievement of these goals is determined at the discretion of the President and CEO with approval of the Corporate Affairs Committee. Adjusted Net Operating Income is equal to Net Operating Income plus the amount of any provider withhold return approved by the Board of Directors during 2019. These performance criteria are weighted respectively as 30%, 50% and 20% of the total Annual Incentive Short Term Bonus.

 

TOTAL OPERATING REVENUE (2019 BUDGET OF $118,109,697)

 

	
			Level

				 	
			Definition

				 	
			Performance

				 	
			2019 OR

				 	 	
			Bonus paid

				 
	
			Threshold

				 	
			10% of Base

				 	
			90% Budget

				 	$	106,298,727	 	 	$	5,684.00	 
	
			Target

				 	
			18% of Base

				 	
			103% Budget

				 	$	121,652,988	 	 	$	10,232.00	 
	
			Stretch

				 	
			26% of Base

				 	
			115% Budget

				 	$	135,826,152	 	 	$	14,779.00	 
	
			Maximum

				 	
			34% of Base

				 	
			130% Budget

				 	$	153,542,606	 	 	$	19,327.00	 

 

ADJUSTED NET OPERATING INCOME (2019 BUDGET OF $4,361,187)

	
			Level

				 	
			Definition

				 	
			Performance

				 	
			2019 ANOI

				 	 	
			Bonus paid

				 
	
			Threshold

				 	
			10% of Base

				 	
			90% Budget

				 	$	3,925,068	 	 	$	9,474.00	 
	
			Target

				 	
			18% of Base

				 	
			103% Budget

				 	$	4,492,023	 	 	$	17,053.00	 
	
			Stretch

				 	
			26% of Base

				 	
			115% Budget

				 	$	5,015,365	 	 	$	24,632.00	 
	
			Maximum

				 	
			34% of Base

				 	
			130% Budget

				 	$	5,669,543	 	 	$	32,211.00	 

 

DISCRETION/MOB

	
			Level

				 	
			Definition

				 	
			Achievement

				 	
			Bonus paid

				 
	
			Threshold

				 	
			10% of Base

				 	
			90% of Goals

				 	$	3,790.00	 
	
			Target

				 	
			18% of Base

				 	
			103% of Goals

				 	$	6,821.00	 
	
			Stretch

				 	
			26% of Base

				 	
			115% of Goals

				 	$	9,853.00	 
	
			Maximum

				 	
			34% of Base

				 	
			130% of Goals

				 	$	12,844.00	 

 

Notes:

	 	
			1.

				
			If performance is under Threshold Level in any criteria, no bonus is paid for that criteria.

			

	 	
			2.

				
			No additional Bonus is paid for performance beyond Maximum Level.

			

	 	
			3.

				
			Actual Bonus paid is calculated and paid on a continuum between any two performance levels.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 

         
	

 

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.

 

    	 	1	 

    	 

    

 

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;

 

    	 	2	 

    	 

    

 

	 	 	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.

 

    	 	3	 

    	 

    

 

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.

 

    	 	4	 

    	 

    

 

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:

 

    	 	5	 

    	 

    

 

 

			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.

 

    	 	6	 

    	 

    

 

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.

 

    	 	7	 

    	 

    

 

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.

 

    	 	8	 

    	 

    

 

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

 

    	 	9	 

    	 

    

 

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)

 

    	 	10

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