Document:

Jinhao Motor Company: Exhibit 10.7 - Filed by newsfilecorp.com

Exhibit 10.7

EXCLUSIVE OPTION 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

EXCLUSIVE OPTION AGREEMENT

This Exclusive Option Agreement (the “Agreement”) is entered into as of 19 July, 2010 between the following Parties in Zhaoqing City. 

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

Registered Address: Painting workshop and No.1 factory, Guangdong Jinhao Motorcycle Co., Ltd., Dawang Industrial Park, High and new technology development Zone, Zhaoqing

Legal Representative: CAI Wenhao (Tsoi Chak Shing) 

Party B:  Zhaoqing Haoyan Industrial Co., Ltd.

an enterprise registered in 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 C: Guangdong Jinhao Motorcycle Co., Ltd.

an enterprise incorporated and existing within the territory of China in accordance with the law of the People’s Republic of China, 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; 

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

WHEREAS:

	
1. 		
Party A is a wholly foreign-owned enterprise incorporated under the laws of the PRC;

	
	 	 
	
2. 		
Party C is a limited liability company incorporated under the laws of the PRC;

	
	 	 
	
3. 		
As of the date of this Agreement Party B is a shareholder of Guangdong Jinhao Motorcycle Co., Ltd. (hereinafter
referred to as “Opco”) and legally holds 51% of the shares of Opco.

	

NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this Agreement according to the following terms and conditions: 

	
1. 		
THE GRANT AND EXERCISE OF PURCHASE OPTION

	
	 	 

1.1  

Grant: Party B hereby grant Party A an irrevocable exclusive purchase option to purchase all or part of
the shares of Opco currently owned by  Party B(the “Option”). The aforesaid purchase options are irrevocable and shall be exercised only by Party A (or the qualified persons appointed by Party A). The term “person” used
herein shall include any entity, corporation, partnership, joint venture and non-corporate organizations. 

1

		
1.2 		
Exercise Procedures:

	
	 	 	 	 
			
1.2.1 		
Party A shall notify Party B in writing prior to exercising its option (the “Option Notice” hereinafter).

	
	 	 	 	 
			
1.2.2 		
The next day upon receipt of the Option Notice, Party B and Opco, together with party A (or the qualified person appointed by Party A), shall promptly compile a whole set of documents (the “Transfer Documents”) to
be submitted to the government bodies for approving the shares or assets and business transfer in connection with the Option exercise so that the shares or assets and business transfer can be transferred, in whole or in part.

	
	 	 	 	 
			
1.2.3 		
Upon the completion of the compilation of all the Transfer Documents and the Transfer Documents being confirmed by Party A, Party B and Opco shall promptly and unconditionally obtain, together with Party A (or the qualified person
appointed by Party A), all approvals, permissions, registrations, documents and other necessary approvals to effectuate the transfer of the shares and remaining assets and business of Opco in connection with the Option exercise.

	
	 	 	 	 
		
1.3 		
Exercise Condition: Party A may immediately exercise the option of acquiring the shares or remaining assets and business of Opco held by Party B whenever Party A considers it necessary and it is doable in accordance with PRC laws
and regulations.

	
	 	 	 	 
	
2. 		
PRICE OF ACQUISITION

	
	 	 	 	 
		
2.1 		
Party A and Party B shall enter into relevant agreements regarding the price of acquisition based on the circumstances of the exercise of option, and the consideration shall be refunded to Party A or Opco in an appropriate manner
decided by Party A.

	
	 	 	 	 
		
2.2 		
Party A has the discretion to decide the time and arrangement of the acquisition, provided that the acquisition will not violate any PRC laws or regulations then in effect.

	
	 	 	 	 
	
3. 		
REPRESENTATIONS AND WARRANTIES

	
	 	 	 	 
		
3.1 		
Each party hereto represents to the other Parties that: (1) it has all the necessary rights, powers and authorizations to enter into this Agreement and perform its duties and obligations hereunder; (2) Party B warrant, represent
and guarantee that this Agreement, the Restructuring Exercise or the Listing shall be in compliance with any and all applicable PRC laws and shall indemnify, defend and hold harmless Party A and Opco for all fines, penalties, damages or claims
sustained by Party A or Opco arising out of Party B’s violation of this section; and (3) the execution or performance of this Agreement shall not violate any contract or agreement to which it is a party or by which it or its assets are
bounded.

	
	 	 	 	 
		
3.2 		
Party B and Opco hereto represent to Party A that: With respect to the shares interest held by Party B in Opco, (1) Party B are legally registered shareholders of Opco and have paid Opco the full amount of their respective
portions of Opco's registered capital required under the PRC laws; (2) except Pledge of Shares Agreement, signed by and between Party B and Party A on 19 July 2010, Party B has mortgaged or pledged its shares of Opco, nor has either of them granted
any security interest or borrow against its shares of Opco in any form; and (3) Party B has not sold or will not sell to any third party its shares in Opco.

	

2

	 	 	 
	
 	
3.3 		
Opco hereto represents to Party A that: (1) it is a limited liability company duly registered and validly existing under the PRC law; and (2) its business operations are in compliance with applicable laws of the PRC in all
material aspects.

	

4. 

COVENANTS 

The Parties further agree as follows:

	
 	
4.1 		
Before Party A has acquired all the shares/assets and business of Opco held by Party B by exercising the purchase option provided hereunder, Opco shall not:

	
	 	 	 	 
	 		
4.1.1 		
sell, assign, mortgage or otherwise dispose of, or create any encumbrance on, any of its assets, operations or any legal or beneficiary interests with respect to its revenues (unless such sale, assignment, mortgage, disposal or
encumbrance is relating to its daily operation or has been disclosed to and agreed upon by Party A in writing);

	
	 	 	 	 
	 		
4.1.2 		
enter into any transaction which may materially affect its assets, liability, operation, shareholders’ shares or other legal rights (unless such transaction is relating to its daily operation or has been disclosed to and
agreed upon by Party A in writing); and

	
	 	 	 	 
	 		
4.1.3 		
distribute any dividend to Party B in any manner.

	
	 	 	 	 
	
 	
4.2 		
Before Party A has acquired all the shares/assets/business of Opco held by Party B by exercising the purchase option provided hereunder, Party B and Party C shall not:

	
	 	 	 	 
	 		
4.2.1 		
sell, assign, mortgage or otherwise dispose of, or create any encumbrance on, any of the shares held by them in Opco, except for the pledge of such shares made according to the Shares Pledge Agreement, signed by and between Party B and Party A on 19 July 2010.

	
	 	 	 	 
	
 	
4.3 		
Before Party A has acquired all the shares/assets/business of Opco by exercising the purchase option provided hereunder, Party B and/or Opco shall not individually or collectively:

	
	 	 	 	 
	 		
4.3.1 		
supplement, alter or amend the articles of association of Opco in any manner to the extent that such supplement, alteration or amendment may have a material effect on Opco's assets, liability, operation, shareholders’ shares or other legal rights;

	
	 	 	 	 
	 		
4.3.2 		
cause Opco to enter into any transaction to the extent such transaction may have a material effect on Opco's assets, liability, operation, shareholders’ shares or other legal rights (unless such transaction is relating to Opco's daily operation or has been disclosed to and agreed upon by Party A in writing); and

	
	 	 	 	 
	
 	
4.4 		
Party B shall entrust Party A to manage Opco in accordance with Shareholder’s Right Proxy and Entrusted Management Agreement, signed by and between Party B, Opco and Party A on 19 July 2010.

	

3

		
4.5 		
Non Competition:

	
	 	 	 	 
			
When Party A exercises the Option, Party B irrevocably and unconditionally agrees and undertakes to Party A that it will not without the prior written consent of Party A:-

	
	 	 	 	 
			
a. 		
be directly or indirectly engaged or concerned (whether as an employee, agent, independent contractor, consultant, advisor or otherwise) in the conduct of any business competing with Party A’s Business (the “Business”);

	
	 	 	 	 
			
b. 		
carry on for his/its own account either alone or in partnership or be concerned as a director or shareholder in any company engaged in any business competing with the Business;

	
	 	 	 	 
			
c. 		
assist any person, firm or company with technical advice or assistance in relation to any business competing with the Business;

	
	 	 	 	 
			
d. 		
solicit or entice away or attempt to solicit or entice away the custom of any person, firm, company or organization who shall at any time have been a customer, client, distributor or agent of Party A or in the habit of dealing
with Party A;

	
	 	 	 	 
			
e. 		
solicit or entice away or attempt to solicit or entice away from Party A any person who is an officer, manager or employee of Party A whether or not such person would commit a breach of his contract of employment by reason of
leaving Party A;

	
	 	 	 	 
			
f. 		
in relation to any trade, business or company, use any name in such a way as to be capable of or likely to be confused with the name of Party A and shall use all reasonable endeavors to procure that no such name shall be used by
any other person, firm or company;

	
	 	 	 	 
			
g. 		
otherwise be interested, directly or indirectly, in any business competing with the Business.

	
	 	 	 	 
	
5. 		
ASSIGNMENT OF AGREEMENT

	
	 	 	 	 
		
5.1 		
Party B and Opco shall not transfer their rights and obligations under this Agreement to any third party without the prior written consent of Party A.

	
	 	 	 	 
		
5.2 		
Each of Party B and Opco hereby agrees that Party A shall have the right to transfer all of its rights and obligation under this Agreement to any third party whenever it desires. Any such transfer shall only be subject to a
written notice sent to Party B and Opco by Party A, and no any further consent from Party B will be required.

	
	 	 	 	 
	
6. 		
CONFIDENTIALITY

	

The Parties acknowledge and confirm that any oral or written materials exchanged by the Parties in connection with this Agreement are confidential. The Parties shall maintain the secrecy and confidentiality of all such materials. Without the written
approval by the other Parties, any Party shall not disclose to any third party any relevant materials, but the following circumstances shall be excluded:  

4

	
 	
6.1 		
The materials is known or will be known by the public (except for any materials disclosed to the public by the Party who receives such materials);

	
	 	 	 
	
 	
6.2 		
The materials are required to be disclosed under the applicable laws or the rules or provisions of stock exchange; or

	
	 	 	 
	
 	
6.3 		
The materials disclosed by each Party to its legal or financial consultant relate to the transaction contemplated under this Agreement, and such legal or financial consultant shall comply with the confidentiality set forth in this
Section. The disclosure of the confidential materials by an employee of any Party shall be deemed disclosure of such materials by such Party, and such Party shall be liable for breaching the contract. This Article 6 shall survive this Agreement even
if this Agreement is invalid, amended, revoked, terminated or unenforceable by any reason.

	

7. 

BREACH OF CONTRACT

Any violation of any provision hereof, any incomplete or mistaken performance of any obligation provided hereunder, any misrepresentation made hereunder, any material nondisclosure or omission of any material fact, or any failure to perform any
covenants provided hereunder by any Party shall constitute a breach of this Agreement. The breaching Party shall be liable for any such breach pursuant to the applicable laws. 

	
8. 		
APPLICABLE LAW AND DISPUTE RESOLUTION

	
	 	 	 
		
8.1 		
Applicable 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.

	
	 	 	 
		
8.2 		
Dispute Resolution

	
	 	 	 
		
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 South China Sub-Commission (the “CIETAC”) in Shenzhen in accordance with its rules. The arbitration shall take place
in Shenzhen. The arbitration award shall be final, conclusive and binding upon both Parties.

	
	 	 	 
	
9. 		
EFFECTIVENESS AND TERMINATION

	
	 	 	 
		
9.1 		
This Agreement shall be effective upon the execution hereof by all Parties hereto and shall remain effective thereafter.

	
	 	 	 
		
9.2 		
This Agreement may not be terminated without the unanimous consent of all the Parties except that Party A may, by giving thirty days prior notice to the other Parties hereto, terminate this Agreement.

	

5

	
10. 		
MISCELLANEOUS

	
	 	 	 
		
10.1 		
Amendment, Modification and Supplement

	
	 	 	 
		
Any amendment and supplement to this Agreement shall be made by the Parties in writing. The amendment and supplement duly executed by each Party shall be deemed an integral part of this Agreement and shall have the same legal
effect as this Agreement.

	
	 	 	 
		
10.2 		
Entire Agreement

	
	 	 	 
		
The Parties acknowledge that this Agreement constitutes the entire agreement of the Parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous agreements and understandings in oral
or written form.

	
	 	 	 
		
10.3 		
Severability

	
	 	 	 
		
If any provision of this Agreement is adjudicated to be invalid or non-enforceable according to relevant PRC laws of the PRC, such a provision shall be deemed invalid only to the extent the PRC laws are applicable in China, and
the validity, legality and enforceability of the other provisions hereof shall not be affected or impaired in any way. The Parties shall, through consultation based on the principal of fairness, replace such invalid, illegal or non-enforceable
provision with valid provision so that any substituted provision may bring the similar economic effects as those intended by the invalid, illegal or non-enforceable provision.

	
	 	 	 
		
10.4 		
Headings

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

	
	 	 	 
		
10.5 		
Language and Copies

	

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

10.6

Successor

This Agreement shall bind and benefit the successor or the transferee of each Party.

(The page is intentionally left blank)

 

 

 

6

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

PARTY A: Jinhao New Energy (Zhaoqing) Development Co., Ltd.

(seal) 

Legal Representative/Authorized Representative (Signature):

 

PARTY B: Zhaoqing Haoyan Industrial Co., Ltd.

Signature:

PARTY C: Guangdong Jinhao Motorcycle Co., Ltd.

 

(seal)

Legal Representative/Authorized Representative (Signature):

 

 

7Jinhao Motor Company: Exhibit 10.8 - Filed by newsfilecorp.com

Exhibit 10.8

EMPLOYMENT AGREEMENT

This employment agreement (this "Agreement"), dated as of August 11, 2010 (the "Effective Date"), is made by and between Jinhao Motor Company, a Nevada corporation (the "Company"), and Chak Shing TSOI (the "Executive") (each, a "Party" and together,
the "Parties"). 

WHEREAS, the Executive is currently employed as a Chief Executive Officer of the Company; and 

WHEREAS, the Parties wish to establish the terms of the Executive's continued employment by the Company; 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby
agree as follows: 

	
1. 		
POSITION/DUTIES.

	

(a)  

During the Employment Term (as defined in Section 2 below), the Executive shall serve as a
Chief Executive Officer of the Company. In this capacity the Executive shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized
companies and such other reasonable duties and responsibilities as the Board of Directors of the Company (the "Board") shall designate. The Executive shall report directly to the Board. The Executive shall obey the lawful directions of the Board and
shall use his diligent efforts to promote the interests of the Company and to maintain and promote the reputation thereof.  

(b)  

During the Employment Term, the Executive shall use his best efforts to perform his duties under this Agreement and shall devote all of his business time, energy and skill in the performance of his duties with the
Company. The Executive shall not during the Employment Term (except as a representative of the Company or with consent in writing of the Board) be directly or indirectly engaged or concerned in any other business activity. Notwithstanding the
foregoing provisions, the Executive is not prohibited from (1) participating in charitable, civic, educational, professional or community affairs or serving on the board of directors or advisory committees of non-profit entities, and (2) managing
his and his family's personal investments, in each case, provided that such activities in the aggregate do not materially interfere with his duties hereunder.  

2. 

EMPLOYMENT TERM. Except for earlier termination as provided in Section 6, the Executive's employment under this Agreement shall be for a two-year term commencing on the Effective Date and ending on August 10,
2012 (the "Initial Term"). Subject to Section 6, the Initial Term shall be automatically extended for additional terms of successive one-year periods (the "Additional Term") unless the Company or the Executive gives written notice to the other of
the termination of the Executive's employment hereunder at least 90 days prior to the expiration of the Initial Term or Additional Term. The Initial Term and any Additional Term shall be referred to herein as the "Employment Term."

3. 

BASE SALARY. The Company agrees to pay to the Executive a base salary at an annual rate of not less than US$120,000, payable in accordance with the regular payroll practices of the Company. The Executive's
Base Salary shall be subject to annual review by the Board (or a committee thereof). The base salary as determined herein from time to time shall constitute "Base Salary" for purposes of this Agreement. 

4.   

BONUS. With respect to each full fiscal year during the Employment Term, the Executive shall be eligible to earn an annual bonus and warrants (the "Annual Bonus") in such amount, if any, is subject to
determine by the Board of Directors.   

 

 

	
    Employment Agreement	
    Page 1

5. 

TERMINATION. The Executive's employment and the Employment Term shall terminate on the first of the following to occur: 

(a) 

Disability. The thirtieth (30th) day following written notice by the Company to the Executive of termination due to Disability. For purposes of this Agreement, "Disability" shall mean a
determination by the Company in accordance with applicable law that due to a physical or mental injury, infirmity or incapacity, the Executive is unable to perform the essential functions of his job with or without accommodation for 180 days
(whether or not consecutive) during any 12-month period. 

	
 	
(b) 		
Death. Automatically on the date of death of the Executive.

	

(c)  

Cause. Immediately upon written notice by the Company to the Executive of a termination for
Cause. "Cause" shall mean, as determined by the Chief Executive Officer (or its designee) (1) conduct by the Executive in connection with his employment duties or responsibilities that is fraudulent, unlawful or grossly negligent; (2) the willful
misconduct of the Executive; (3) the willful and continued failure of the Executive to perform the Executive's duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness); (4) the commission by
the Executive of any felony (or the equivalent under the law of the People's Republic of China) (other than traffic-related offenses) or any crime involving moral turpitude; (5) violation of any material policy of the Company or any material
provision of the Company's code of conduct, employee handbook or similar documents; or (6) any material breach by the Executive of any provision of this Agreement or any other written agreement entered into by the Executive with the Company.  

(d) 

Without Cause. On the thirtieth (30th) day following written notice by the Company to the Executive of an involuntary termination without Cause, other than for death or Disability. 

(e)  

Good Reason. On the sixtieth (60th) day following written notice by the Executive to the Company of a termination for Good Reason. "Good Reason" shall mean, without the express written consent of
the Executive, the occurrence of any the following events unless such events are cured (if curable) by the Company within fifteen days following receipt of written notification by the Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below: any material reduction or diminution (except temporarily during any period of incapacity due to physical or mental illness) in the Executive's title, authorities, duties or
responsibilities or reporting requirements with the Company.  

	
6. 		
CONSEQUENCES OF TERMINATION.

	

(a) 

Disability. Upon termination of the Employment Term because of the Executive's Disability,
the Company shall pay or provide to the Executive (1) any unpaid Base Salary and any accrued vacation through the date of termination; (2) any unpaid Annual Bonus accrued with respect to the fiscal year ending on or preceding the date of
termination; (3) reimbursement for any unreimbursed expenses properly incurred through the date of termination; and (4) all other payments or benefits to which the Executive may be entitled under the terms of any applicable employee benefit plan,
program or arrangement (collectively, "Accrued Benefits"). 

(b)

Death. Upon the termination of the Employment Term because of the Executive's death, the Executive's estate shall be entitled to any Accrued Benefits. 

(c) 

Termination for Cause. Upon the termination of the Employment Term by the Company for Cause or by either party in connection with a failure to renew this Agreement, the Company shall pay to the Executive any
Accrued Benefits. 

(d) 

Termination without Cause or for Good Reason. Upon the termination of the Employment
Term by the Company without Cause or by the Executive with Good Reason, the Company shall pay or provide to the
Executive (1) the Accrued Benefits, and (2) subject to the Executive's execution (and non-revocation) of a general release of claims against the Company and its affiliates in a form reasonably requested by the Company, (A) continued payment of his
Base Salary for two (2) months after termination, payable in accordance with the regular payroll practices of the Company, but off the payroll; and (B) payment of the Executive's cost of continued medical coverage for two (2) months after
termination (subject to the Executive's co-payment of the costs in the same proportion as such costs were shared immediately prior to the date of termination).  Payments provided under this Section 7(d) shall be in lieu of any termination or
severance payments or benefits for which the Executive may be eligible under any of the plans, policies or programs of the Company. 

 

	
    Employment Agreement	
    Page 2

7.

NO ASSIGNMENT. This Agreement is personal to each of the Parties. Except as provided below, no Party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of
the other Party hereto; provided, however, that the Company may assign this Agreement to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets
of the Company. 

8. 

NOTICES. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (1) on the date of delivery if
delivered by hand, (2) on the date of transmission, if delivered by confirmed facsimile, (3) on the first business day following the date of deposit if delivered by guaranteed overnight delivery service, or (4) on the fourth business day following
the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

If to the Executive:

At the address (or to the facsimile number) shown on the records of the Company

If to the Company:

Jinhao Motor Company

c/o Guangdong Jinhao Motorcycle Co. Ltd. 

Dawang Industrial Park, Hi-Tech Exploit Area, 

Zhaoqing City, Guangdong, China.ZIP:526238

With a copy to:

Pillsbury Winthrop Shaw Pittman LLP

50 Fremont Street

San Francisco, CA 94105-2228 

or to such other address as either Party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

	
9. 		
PROTECTION OF THE COMPANY'S BUSINESS.

	

(a) 

Confidentiality. The Executive acknowledges that during the course of his employment by the
Company (prior to and during the Employment Term) he has and will occupy a position of trust and confidence. The Executive shall hold in a fiduciary capacity for the benefit of the Company and shall not disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company, except (i) as in good faith deemed necessary by the Executive to perform his duties hereunder, (ii) to enforce any rights or defend any claims hereunder or under any other agreement to
which the Executive is a party, provided that such disclosure is relevant to the enforcement of such rights or defense of such claims and is only disclosed in the formal proceedings related thereto, (iii) when required to do so by a
court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with jurisdiction to order him to divulge, disclose or make
accessible such information, provided that the Executive shall give prompt written notice to the Company of such
requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment, (iv) as to such Confidential Information that shall have become public or known in the
Company's industry other than by the Executive's unauthorized disclosure, or (v) to the Executive's spouse, attorney and/or his personal tax and financial advisors as reasonably necessary or appropriate to advance the Executive's tax, financial and
other personal planning (each an "Exempt Person"), provided, however, that any disclosure or use of Confidential Information by an Exempt Person shall be deemed to be a breach of this Section 10(a) by the Executive. The
Executive shall take all reasonable steps to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. The Executive understands and agrees that the Executive shall acquire no rights to any such
Confidential Information. "Confidential Information" shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not disclosed by the Company and that was learned by the Executive in
the course of his employment by the Company, including, but not limited to, any proprietary knowledge, trade secrets, data and databases, formulae, sales, financial, marketing, training and technical information, client, customer, supplier and
vendor lists, competitive strategies, computer programs and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information. 

 

 

 

	
    Employment Agreement	
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(b) 

Non-Competition. During the Employment Term and for the one-year period following the termination of the Executive's employment for any reason (the "Restricted Period"), the Executive shall not, directly or
indirectly, without the prior written consent of the Company, provide employment (including self-employment), directorship, consultative or other services to any business, individual, partner, firm, corporation, or other entity that competes with
any business conducted by the Company or any of its subsidiaries or affiliates on the date of the Executive's termination of employment or within one year of the Executive's termination of employment in the geographic locations where the Company and
its subsidiaries or affiliates engage or propose to engage in such business (the "Business"). Nothing herein shall prevent the Executive from having a passive ownership interest of not more than 2% of the outstanding securities of any entity engaged
in the Business whose securities are traded on a national securities exchange. 

(c) 

Non-Solicitation of Employees. The Executive recognizes that he possesses and will possess confidential information about other employees of the Company and its subsidiaries and affiliates relating to their
education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company and its subsidiaries and affiliates. The Executive recognizes that the information he possesses and will possess
about these other employees is not generally known, is of substantial value to the Company and its subsidiaries and affiliates in developing their business and in securing and retaining customers, and has been and will be acquired by him because of
his business position with the Company. The Executive agrees that, during the Restricted Period, he will not, directly or indirectly, (i) solicit or recruit any employee of the Company or any of its subsidiaries or affiliates (a "Current Employee")
or any person who was an employee of the Company or any of its subsidiaries or affiliates during the twelve (12) month period immediately prior to the date the Executive's employment terminates (a "Former Employee") for the purpose of being employed
by him or any other entity, or (ii) hire any Current Employee or Former Employee. 

(d) 

Non-Solicitation of Customers. The Executive agrees that, during the Restricted Period, he will not, directly or indirectly, solicit or attempt to solicit (i) any party who is a customer or client of the
Company or its subsidiaries, who was a customer or client of the Company or its subsidiaries at any time during the twelve (12) month period immediately prior to the date the Executive's employment terminates or who is a prospective customer or
client that has been identified and targeted by the Company or its subsidiaries for the purpose of marketing, selling or providing to any such party any services or products offered by or available from the Company or its subsidiaries, or (ii) any
supplier or vendor to the Company or any subsidiary to terminate, reduce or alter negatively its relationship with the Company or any subsidiary or in any manner interfere with any agreement or contract between the Company or any subsidiary and such
supplier or vendor. 

(e) 

Property. The Executive acknowledges that all originals and copies of materials, records and documents generated by him or coming into his possession during his employment by the Company or its subsidiaries
are the sole property of the Company and its subsidiaries ("Company Property"). During the Employment Term, and at all times thereafter, the Executive shall not remove, or cause to be removed, from the premises of the Company or its subsidiaries,
copies of any record, file, memorandum, document, computer related information or equipment, or any other item relating to the business of the Company or its subsidiaries, except in furtherance of his duties under this Agreement.
When the Executive's employment with the Company terminates, or upon request of the Company at any time, the Executive shall promptly deliver to the Company all copies of Company Property in his possession or control. 

 

 

	
    Employment Agreement	
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(f) 

Non-Disparagement. Executive shall not, and shall not induce others to, Disparage the Company or its subsidiaries or affiliates or their past and present officers, directors, employees or products.
"Disparage" shall mean making comments or statements to the press, the Company's or its subsidiaries' or affiliates' employees or any individual or entity with whom the Company or its subsidiaries or affiliates has a business relationship which
would adversely affect in any manner (1) the business of the Company or its subsidiaries or affiliates (including any products or business plans or prospects), or (2) the business reputation of the Company or its subsidiaries or affiliates, or any
of their products, or their past or present officers, directors or employees. 

(g) 

Cooperation. Subject to the Executive's other reasonable business commitments, following the Employment Term, the Executive shall be available to cooperate with the Company and its outside counsel and provide
information with regard to any past, present, or future legal matters which relate to or arise out of the business the Executive conducted on behalf of the Company and its subsidiaries and affiliates, and, upon presentation of appropriate
documentation, the Company shall compensate the Executive for any out-of-pocket expenses reasonably incurred by the Executive in connection therewith. 

(h) 

Equitable Relief and Other Remedies. The Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of this Section 10 would be inadequate
and, in recognition of this fact, the Executive agrees that, in the event of such a breach or threatened or attempted breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief in
the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available. In addition, without limiting the Company's remedies for any breach of any restriction on
the Executive set forth in this Section 10, except as required by law, the Executive shall not be entitled to any payments set forth in Section 7(d) hereof if the Executive has breached the covenants applicable to the Executive contained in this
Section 10, the Executive will immediately return to the Company any such payments previously received under Section 7(d) upon such a breach, and, in the event of such breach, the Company will have no obligation to pay any of the amounts that remain
payable by the Company under Section 7(d). 

(i) 

Reformation. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 10 is excessive in duration or scope or is unreasonable or unenforceable under the laws
of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. The Executive acknowledges that the restrictive
covenants contained in this Section 10 are a condition of this Agreement and are reasonable and valid in temporal scope and in all other respects. 

(j) 

Survival of Provisions. The obligations contained in this Section 10 shall survive in accordance with their terms the termination or expiration of the Executive's employment with the Company and shall be
fully enforceable thereafter. 

10.  

INDEMNIFICATION. The Executive shall be indemnified to the extent permitted by the Company's organizational documents and to the extent required by law.  

11. 

SECTION HEADINGS AND INTERPRETATION. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.
Expressions of inclusion used in this agreement are to be understood as being without limitation. 

12.
 

SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity of unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
 

 

	
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13. 

COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same Agreement. 

14. 

GOVERNING LAW AND VENUE. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.
The Parties agree irrevocably to submit to the exclusive jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts, located in the City of New York, Borough of Manhattan, for the purposes of any suit, action or other
proceeding brought by any Party arising out of any breach of any of the provisions of this Agreement and hereby waive, and agree not to assert by way of motion, as a defence or otherwise, in any such suit, action, or proceeding, any claim that it is
not personally subject to the jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper, or that the provisions of this Agreement may
not be enforced in or by such courts. IN ADDITION, THE PARTIES AGREE TO WAIVE A TRIAL BY JURY. 

15. 

ENTIRE AGREEMENT. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 

16.  

WAIVER AND AMENDMENT. No provision of this Agreement may be modified, amended, waived or discharged unless such waiver, modification, amendment or discharge is agreed to in writing and signed by the Executive
and such officer or director as may be designated by the Board. No waiver by either Party at any time of any breach by the other Party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver or similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  

17. 

WITHHOLDING. The Company may withhold from any and all amounts payable under this Agreement such federal, state, local and foreign taxes as may be required to be withheld pursuant to any applicable law or
regulation. 

18. 

AUTHORITY AND NON-CONTRAVENTION. The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be performed
hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which could prevent him from entering into this Agreement or performing all of his obligations hereunder. 

19. 

COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 

20. 

TERMINATION OF EXCHANGE AGREEMENT. In the event that the consummation of the Acquisition does not occur and the Exchange Agreement terminates pursuant to its term, the terms of employment contained herein
shall be null and void, or if the Executive's employment with the Company terminates prior to the consummation of the Acquisition, the terms contained herein shall be null and void unless the Company agrees otherwise, in its sole discretion. 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

JINHAO MOTOR COMPANY

Board of Directors:

/s/ Chak Shing TSOI                                         
   

By: Chak Shing TSOI 

Title: Chairman and Chief Executive Officer

EXECUTIVE

/s/ Chak Shing TSOI                                         
  

By: Chak Shing TSOI 

Title: Chief Executive Officer

 

 

	
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