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Jinhao Motor Company: Exhibit 10.5 - Filed by newsfilecorp.com

Exhibit 10.5

SHAREHOLDER'S RIGHT PROXY AND OPERATION MANAGEMENT SERVICE AGREEMENT 

AMONG 

JINHAO NEW ENERGY (ZHAOQING) DEVELOPMENT CO., LTD.

AND 

ZHAOQING HAOYAN INDUSTRIAL CO., LTD. 

GUANGDONG JINHAO MOTORCYCLE CO., LTD. 

 

 

19 July 2010 

ZHAOQING, CHINA

 

SHAREHOLDER'S RIGHT PROXY AND OPERATION MANAGEMENT SERVICE AGREEMENT

This shareholder's right proxy and operation management service agreement (the “Agreement”) is entered into on the 19th day of July, 2010 in Zhaoqing, China by:                                          

Party A: Zhaoqing Haoyan Industrial Co., Ltd., an enterprise registered in Zhaoqing, People’s Republic of China (the “PRC”), and the registration number of its legal and valid business license is 441200000012090,
and its legal address is Dawang Industrial Park, High and new technology development Zone, Zhaoqing; 

Party B: Jinhao New Energy (Zhaoqing) Development Co., Ltd., a wholly-foreign owned enterprise registered in Zhaoqing, PRC, and the registration number of its legal and valid business license is 441200400011498; 

Party C: Jinhao Motorcycle Company Limited, an enterprise registered in Hong Kong, and the registration number is   , the legal representative is     and its legal address is     ; 

Party D: Guangdong Jinhao Motorcycle Co., Ltd., a joint venture registered in Zhaoqing, and the registration number of its legal and valid business license is 441200400008320, and its legal address is Dawang Industrial Park, High and new
technology development Zone, Zhaoqing. 

Whereas:

	
1 		
Party A and Party C are the shareholders of Guangdong Jinhao Motorcycle Co., Ltd. (hereinafter referred to as “Guangdong Jinhao”); Party A holds 51% share equity of Guangdong Jinhao and Party C holds 49% share
equity of Guangdong Jinhao.

	
	 	 
	
2 		
Jinhao New Energy (Zhaoqing) Development Co., Ltd. (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 PRC, and the registration number of its legal and valid business license is 441200400011498 and its legal address is Painting workshop and No.1 factory, Guangdong Jinhao Motorcycle Co., Ltd., Dawang Industrial Park, High and new technology
development Zone, Zhaoqing.

	
	 	 
	
3 		
Party A desires to entrust Party B to exercise its shareholder’s rights in Guangdong Jinhao, including but not limited to shareholder voting right (or any similar right to decide or express its attitude as a shareholder), the
right to appoint director(s) and any other rights Party A is entitled to as the shareholder of Guangdong Jinhao pursuant to laws, regulations and articles of association of Guangdong Jinhao (the “Shareholder’s Rights”), and
appoint the person(s) designated by Party B as the proxy. Party B is willing to accept such proxy.

	
	 	 
	
4 		
The Parties of this Agreement agree that, Guangdong Jinhao shall pay Party B the operation management service fee.

	

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 Proxy of Shareholder’s Rights  

1.1    

Party A agrees to entrust Party B to exercise its Shareholder’s Rights in   Guangdong Jinhao, and appoint the person(s) designated by Party B as the proxy, and Party B is willing to accept such proxy subject to the terms and conditions of this Agreement.

- 2 - 

	 	 	 
	
1.2 		
The term of this proxy (the “Proxy Period”) shall be from the effective date of this Agreement to the earlier of the following:

	
	 	 	 
		
(1) 		
the winding up of Guangdong Jinhao, or

	
	 	 	 
		
(2) 		
the date on which Party B or Party C completes the acquisition of Guangdong Jinhao.

	
	 	 	 
	
1.3 		
During the Proxy Period, Party B shall excise the Shareholder’s Rights as the proxy for Party A in Guangdong Jinhao, including without limitation the following: to manage the operation of Guangdong Jinhao for Party A
exclusively, including nominate and replace the director(s) of Guangdong Jinhao and engage the management of Guangdong Jinhao. Party A shall make shareholder’s resolutions and a board of directors’ resolutions accordingly based on the
decision of Party B.

	
	 	 	 
	
1.4 		
Party A shall pay Party B through Guangdong Jinhao according to Article 2 of this Agreement.

	
	 	 	 
	
1.5 		
During the Proxy Period, Party A’s rights and obligations include:

	
	 	 	 
		
(1) 		
to hand over all of business materials together with business license and corporate seal(s) of Guangdong Jinhao processed by it to Party B as of the effectiveness date of this Agreement;

	
	 	 	 
		
(2) 		
Party A shall not make any decision regarding Guangdong Jinhao’s operations without the prior written consent of Party B;

	
	 	 	 
		
(3) 		
to have the right to know the business conditions of Guangdong Jinhao at any time and provide proposals;

	
	 	 	 
		
(4) 		
to assist Party B in carrying out the proxy of Shareholder’s Rights upon Party B’s requests;

	
	 	 	 
		
(5) 		
not to intervene Party B’s management over Guangdong Jinhao in any form by making use of shareholder’s power;

	
	 	 	 
		
(6) 		
not to entrust or grant its Shareholders’ Rights in Guangdong Jinhao to a third party other than Party B without Party B’s prior written consent;

	
	 	 	 
		
(7) 		
not to terminate this Agreement unilaterally with for any reason whatsoever;

	
	 	 	 
		
(8) 		
other rights and perform other obligations under the Agreement.

	
	 	 	 
	
1.6 		
During the Proxy Period, Party B’s rights and obligations include:

	
	 	 	 
		
(1) 		
to appoint director(s) of Guangdong Jinhao;

	
	 	 	 
		
(2) 		
to nominate and decide tighter with Party C the legal representative, general manager, deputy general
manager, financial manager and other senior managerial personnel of Guangdong Jinhao;

	

- 3 -

(3) 

other rights and perform other obligations under the Agreement. 

Article 2 Operation Management Service 

	
2.1 		
The Parties agree, in consideration of the proxy of Shareholder’s Rights for Party A and operation management services for Guangdong Jinhao provided by Party B hereunder, Guangdong Jinhao shall pay an operation management
service fee (the “Management Fee”) to Party B, which shall be equal to the 51% of the earnings before tax (if any) of Guangdong Jinhao. The Management Fee shall be as follows: during the Proxy Period, the Management Fee shall be
equal to 51% of Guangdong Jinhao’s estimated earnings before tax, being the monthly revenues after deduction of operating costs, expenses and taxes other than income tax. If the earnings before tax is zero, Guangdong Jinhao is not required to
pay the e Management Fee; if Guangdong Jinhao sustains losses, 51% of such losses will be carried over to next month and deducted from next month’s Management Fee. The Parties shall calculate, and Guangdong Jinhao shall pay, the monthly
Management Fee within 20 days of the following month.

	
	 	 
	
2.2 		
The Parties agree and acknowledge, during the Proxy Period, Party B shall assume 51% of the operation risks out of Guangdong Jinhao and bear 51% of the losses of Guangdong Jinhao. If Guangdong Jinhao has no sufficient funds to
repay its debts, Party B is responsible for paying 51% of these debts on behalf of Guangdong Jinhao.

	
	 	 
	
2.3 		
The Parties agree and acknowledge, during the Proxy Period, whereas Guangdong Jinhao shall pay the Management Fee to Party B and Party B shall bear 51% of the operation risks of Guandong Jinhao, Party A shall not pay Party B any
other consideration. Party A hereby irrevocably waives any immunity regarding Article 2 of this Agreement, to which Party A is entitled to in accordance with the laws and jurisdictions of PRC or elsewhere, whatever such immunity is procedural or
substantial.

	

Article 3 Representations and Warranties  

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

	
 	
(1) 		
has the right to enter into and the ability to perform the Agreement;

	
	 	 	 
	
 	
(2) 		
the execution and delivery of this Agreement by each Party have been duly authorized by all necessary corporate action;

	
	 	 	 
	
 	
(3) 		
the execution of this Agreement by the officer or representative of each Party has been duly authorized:

	
	 	 	 
	
 	
(4) 		
Each Party has no reasons that will prevent this Agreement from becoming a binding and effective agreement among the 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; or (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. 

	

- 4 -

Article 4 Effectiveness

This Agreement shall take effect after it is duly executed by the authorized representatives of the Parties hereto with corporate 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 PRC. 

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 South China Sub-Commission in Shenzhen. The Place of arbitration is Shenzhen. The arbitration award shall be final and binding on the Parties. 

Article 9   Confidentiality

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. The obligations of
confidentiality 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.

	

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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 Parties 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 another Party of certain provisions under this Agreement, such excuse shall not be deemed to excuse any future non-performance by the other Parties 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 other party nor can it provide any guarantee to such other party or carry out other similar activities
without the prior written consent from the all Parties hereto. 

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 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 four copies
and each Party shall hold one.

	
	 	 
	
13.4 		
In witness hereof, the Agreement is duly executed by the Parties hereto on the date first written above.

	

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

 

 

 

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(Page of signature only)

Party A: Zhaoqing Haoyan Industrial Co., Ltd.

(official seal) 

 

Authorized representative:

(signature) 

Party B: Jinhao New Energy (Zhaoqing) Development Co., Ltd.

(official seal) 

 

Authorized representative:

(signature) 

Party C: Jinhao Motorcycle Company Limited

(official seal) 

 

Authorized representative:

(signature) 

Party D: Guangdong Jinhao Motorcycle Co., Ltd.

(official seal) 

 

Authorized representative:

(signature)

 

 

- 7 -Jinhao Motor Company: Exhibit 10.6 - Filed by newsfilecorp.com

Exhibit 10.6

SHARES PLEDGE AGREEMENT

BETWEEN 

JINHAO NEW ENERGY (ZHAOQING) DEVELOPMENT CO., LTD.

AND

ZHAOQING HAOYAN INDUSTRIAL CO., LTD.

GUANGDONG JINHAO MOTORCYCLE CO., LTD.

 

19 July 2010 

ZHAOQING, CHINA

Shares Pledge Agreement

This Agreement is executed by on 19 July, 2010 in Zhaoqing City, China:

Pledgeor (hereinafter collectively referred to as “Party A”): owns 25% shares of Guangdong Jinhao Motorcycle Co., Ltd.; 

and

Pledgee (hereinafter referred to as “Party B”): Jinhao New Energy (Zhaoqing) Development Co., Ltd., a wholly foreign-owned enterprise registered in Guangdong, People’s Republic of China (the “PRC”), and
the registration number of its legal and valid Business License is 41200400011498. 

Party C: Guangdong Jinhao Motorcycle Co., Ltd., the registration number of its legal and valid Business License is 441200400008320 and the legal registered address is Dawang Industrial Park, High and new technology development Zone, Zhaoqing.

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

Whereas:

	
1. 		
Party A is a shareholder of Guangdong Jinhao Motorcycle Co., Ltd. (hereinafter referred to as “Opco”) and legally holds 51% of the shares of Opco.

	
	 	 
	
2. 		
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, the registration number of its legal and valid Business
License is 441200400011498, and the legal registered address is Painting workshop and No.1 factory, Guangdong Jinhao Motorcycle Co., Ltd., Dawang Industrial Park, High and new technology development Zone, Zhaoqing.

	
	 	 
	
3. 		
Guangdong Jinhao Motorcycle Co., Ltd. (the “Opco”) 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 441200400008320 and the legal registered address is Dawang Industrial Park, High and new technology development Zone, Zhaoqing.

	
	 	 
	
4. 		
Party A, Party B and Party C have entered into Shareholder’s Right Proxy and Operation Management Service Agreement (the “Proxy and Management Agreement”) as of [ ], 2010; and in order to ensure that Party A
and/or Opco would fulfill their/its obligations under the Proxy and Management Agreement, Party A agrees to pledge the 51% of shares of Opco owned by Party A to Party B in accordance with conditions and terms of this agreement.

	
	 	 
	
5. 		
Party B accepts the pledge of the shares by Party A.

	

Therefore, in accordance with applicable laws and regulations of the People’s Republic of China, the Parties hereto reach the Agreement through friendly negotiation on the principle of equality and mutual benefit and abide by.  

2

Article 1 Guaranteed Debts

Any debts or obligations occurred under the Proxy and Management Agreement (including amendment and supplementary agreement of Proxy and Management Agreement) by Party A, including but not limited to, manage fees, interest, penalty, damage, costs of
collection and any other fees occurred under the Proxy and Management Agreement by Party A and/or Opco and any loss and payable fees due to Party A and/or Opco breach Proxy and Management Agreement.  

Article 2 Pledged Properties

Party A pledges, by way of first priority pledge, all of its rights, title and interest, in, to and under all or any part of:

	
 	
(a) 		
51% of the shares in Opco;

	
	 	 	 
	
 	
(b) 		
51% of the registered capital (“Registered Capital”) of Opco;

	

Article 3 Scope of Guarantee

Any debts and/or obligations that is defined under the Article 1.

Article 4 Pledge Procedure and Registration

Party A and Party B shall be responsible for, and Opco shall assist Party A and Party B in obtaining the approval from relevant commerce department and processing the registration procedures with local Administration for Industry and Commerce
concerning the pledged shares and shall ensure that all other approval(s) from or registration with relevant PRC authorities is granted or duly secured as soon as possible.  

Party A and Party B shall process the pledge registration procedures with relevant Administration for Industry and Commerce within 7 business days as of the effective date of this agreement. 

Article 5 Transfer of Pledged Shares

Party A shall not transfer any of the pledged shares without the prior written consent of Party B during the term of this agreement.   

Article 6 Representations and Warranties  

6.1   

Pledgeor hereby represents and warrants to the Pledgee that:   

(a) 

has all the necessary rights, powers and authorizations to enter into this Agreement and perform its duties and obligations hereunder;  (b) this Agreement constitutes its legal, valid and binding obligations which are enforceable pursuant to the
terms of this Agreement; (c) Pledgeor is and will, at all times, during the term of this Agreement, be the lawful and beneficial owners of the Pledged Shares free from pledge or other encumbrances(other than the Pledge created by this Agreement);
(d) Pledgeor is a legally registered shareholder of Opco and has paid up its amount of the registered capital of Opco. 

3

6.2  

Opco hereby represents and warrants to the Pledgee that:

	
 	
(a) 		
it is duly incorporated and validly existing under the laws of the PRC;

	
	 	 	 
	
 	
(b) 		
it has and will at all times have the necessary power, and has obtained the necessary approvals and authorizations,
to enable it to enter into and perform its obligations under this Agreement; 

	

(c) 

its entry into and performance of this Agreement do not and will not violate any
applicable laws, its articles of association or any agreement or document
binding it or its assets; and 

 

(d)

this Agreement constitutes its legal, valid and binding obligations which are
enforceable pursuant to the terms of this agreement.

Article 7  Covenants

7.1

Pledgeor further undertakes that they shall:

(a) 

at no time during the term of this Agreement, except with the prior  written consent of the Pledgee, transfer, sell, pledge(other than the pledge created under this Agreement), encumber or otherwise dispose of the Pledged Equity; 

(b)

 notify the Pledgee immediately of any event that may affect the title of  the Pledgeor in relation to the whole or any part of the Pledged Equity under this Agreement; 

7.2

Opco further undertakes that it shall:

(a) 

assist the Pledgeor with the completion of this equity pledge and all subsequent
process required by applicable laws and its articles and association; 

(b)

 enter into any transaction which may materially affect its assets,
liability, operation, shareholders’ equity or other legal rights (unless such
transaction is relating to its daily operation or has been disclosed to and
agreed upon by Party B in writing). 

Article 8 Effectiveness, Modification and Termination

8.1  

This Agreement shall go into effect when it is signed by the authorized affixed
and approved by relevant commerce department;
representatives of the Parties with seals

8.2  

Upon the effectiveness of this Agreement and unless otherwise agreed upon by the
Parties hereto, neither Party may modify or terminate this Agreement. Any
modification or termination shall be in writing after both Parties’
consultations. The provisions of this Agreement remain binding on the Parties
prior to any written agreement on modification or termination.  

Article 9 Governing Law

The execution, validity, interpretation and performance of this Agreement and the disputes resolution under this Agreement shall be governed by the laws of PRC. 

Article 10 Liability for Breach of Agreement

Upon the effectiveness of this Agreement, the Parties hereto shall perform their respective obligations under the
Agreement. Any failure to perform the obligations stipulated in the Agreement, in part or in whole, shall be deemed as breach of contract and the breaching party shall compensate the non-breaching party for the loss incurred as a result of the
breach. 

4

Article 11 Settlement of Dispute

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 Shenzhen in accordance with its rules then in effect. The arbitration shall take place in Shenzhen. The
arbitration award shall be final, conclusive and binding upon both parties. 

Article 12 Severability

12.1 

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. 

12.2 

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 13 Miscellaneous

13.1  

The headings contained in this Agreement are for the convenience of reference
only and shall not in any other way affect the interpretation of the provisions
of this Agreement.  

13.2 

The Agreement shall be executed in copies, both in Chinese and English. Each
party holds one Chinese and one English original, and the remaining shall be
kept for completing relevant procedures. Each copy shall have equal legal force,
and both the English version and Chinese version shall have the same effect. 

13.3

 In Witness Hereof, the Parties hereto have executed this Agreement on the
date described in the first page.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

 

 

 

 

5

(Page of signature only)

Party A: Zhaoqing Haoyan Industrial Co., Ltd.

 (signature) : 

 

Party B: Jinhao New Energy (Zhaoqing) Development Co., Ltd.

(seal)

Authorized representative:

(signature):

Party C: Guangdong Jinhao Motorcycle Co., Ltd.

(seal) 

Authorized representative:

(signature):

 

6

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