ENTRUSTED MANAGEMENT AGREEMENT AIDONG YU DANDAN YU CHUNXIAO ZOU YANJUN HUANG YULIANG XIE YANPING YU QIANG SUI AIPING YU YUNXIAO ZOU AND HUAKANG ZHOU For PAPERCLIP SOFTWARE, INC. November 8, 2006 JILIN PROVINCE, CHINA
ENTRUSTED
MANAGEMENT AGREEMENT
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AND
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For
PAPERCLIP
SOFTWARE, INC.
November
8, 2006
JILIN
PROVINCE,
CHINA
Entrusted
Management Agreement
This
Entrusted Management Agreement (the "Agreement") is entered into on the
8th
day of
November, 2006 in Jilin, China by:
Party
A:
1 Xxxxxx Xx, a citizen of PRC.
|
2.
Xxxxxx Xx, a citizen of PRC.
|
3.
Xxxxxxxx
Xxx,
a
citizen of PRC.
4.
Xxxxxxx
Xxx,
a
citizen of PRC.
5.
Xxxxxxx
Xx,
a
citizen of PRC.
6.
Qiang
Sui,
a
citizen of PRC.
7.
Xxxxxx
Xx,
a
citizen
of PRC.
8.
Xxxxxxx
Xxx,
a
citizen of PRC.
and
Party
B:
Xxxxxxx
Xxxx, an US citizen
with social security number of ###-##-#### (hereinafter referred to as Party
B),
and
the
sole officer and majority shareholder of
American
Sunrise International, Inc., a wholly foreign-owned enterprise incorporated
in
the State of Delaware.
Whereas:
1.
Party
A constitutes the parties set forth above under “Party A.”
2.
Xxxxxxx
Xxxx, an US citizen
with social security number of ###-##-#### (hereinafter referred to as Party
B),
and
the
sole officer and majority shareholder of American Sunrise International, Inc.,
a
wholly foreign-owned enterprise incorporated in the State of
Delaware.
3.
According to the Stock Purchase Agreement and Share Exchange between Paperclip
Software Inc., a Delaware corporation (“PSI”) and American Sunrise International
Inc. (the “Agreement”), Party B will exchange all his shares in ASI Company for
a majority control of the issued and outstanding shares of PSI. Thereafter,
Party B agrees to entrust management of PSI to the persons designated as Party
A.
4.
Party
A agrees to accept such entrustment and to manage PSI on behalf of Party
B.
Therefore,
in accordance with the laws and regulations of the People's Republic of China,
the Parties agree as follows after friendly consultation based on the principle
of equality and mutual benefit.
Article
1
Entrusted Management
1.1
Party
B agrees to entrust the management of PSI to Party A pursuant to the terms
and
conditions of this Agreement. Party B agrees to manage PSI in accordance with
the terms and conditions of this Agreement.
1.2
The
term of this Entrusted Management Agreement shall be from the effective date
of
this Agreement to the earlier of the following:
(1)
the
winding up of PSI, or
(2)
the
termination date of this Entrusted Management Agreement to be determined by
the
parties hereto.
1.3
The
goals of the entrusted management are to allow PSI Company, prior to being
acquired by Party A through asset or equity purchase: 1) to repay its borrowings
from banks, pay off its existing accounts payable; and 2) to manage its
remaining assets prior to being acquired by Party A. During the entrusted
period, Party A shall be fully responsible for the management of PSI. The
management service includes, without limitation, the following:
(1)
Party
B shall be fully responsible for the operation of PSI, which includes the right
to appoint and terminate members of the Board of Directors and the right to
hire
managerial and administrative personnel. Party B or its voting proxy shall
make
a shareholder's resolution and a board of directors' resolution based on the
decision of Party A.
(2)
Party
A has the right to manage and control all assets of PSI. PSI shall open an
entrusted account or designate an existing account as an entrusted account.
Party A has the full right to decide the use of the funds in the entrusted
account. The signer of the account shall be appointed or confirmed by Party
A.
All of the funds of PSI shall be kept in this account, including but not limited
to its existing working capital and purchase price received from selling its
production equipment, inventory, raw materials and accounts receivable to PSI.
All payments of funds shall be disbursed through this entrusted account,
including but not limited to the payment of all existing accounts payable and
operating expenses, payment of employees salaries and purchase of assets, and
all revenues from its operation shall be kept in this account.
(3)
Party
A shall have the full right to control and administer the financial affairs
and
daily operations of PSI such as entering into and performance of contracts,
and
payment of taxes and the like.
(4)
If
PSI requires additional funds to maintain its operations, Party A shall provide
such additional funds through a bank loan or other resources and Party B shall
provide necessary assistance in obtaining these funds.
Article
2
Rights and Obligations of the Parties
2.1
During the term of this Agreement, Party B's rights and obligations
include:
(1)
to
hand over PSI to Party A for entrusted management as of the effectiveness date
of this Agreement and to hand over all of the business materials, business
license and corporate seal of PSI to Party A;
(2)
Party
B has no right to make any decisions regarding PSI’s operations without the
consent of Party A;
(3)
to
have the right to know the business conditions of PSI at any time and provide
proposals;
(4)
to
assist Party A in carrying out the entrusted management according to Party
A's
requirement;
(5)
to
perform its obligations pursuant to the Shareholders' Voting Rights Proxy
Agreement by and between the parties, and not to violate the said
agreement;
(6)
not
to intervene Party B's management over PSI in any form by making use of
shareholder's power;
(7)
not
to entrust or grant their shareholders' rights in PSI to a third party other
than Party A without Party A's consent;
(8)
not
to otherwise entrust other third parties other than Party A to manage PSI in
any
form without Party A's consent;
(9)
not
to terminate this Agreement unilaterally with any reason; or
(10)
to
enjoy other rights and perform other obligations under the
Agreement.
2.2
During the term of this Agreement, Party A's rights and obligations
include:
(1)
to
enjoy independent and full right to manage PSI;
(2)
to
enjoy the right to dispose of all assets of PSI;
(3)
to
enjoy profits and bear losses arising from PSI's operations during the period
of
entrusted management;
(4)
to
appoint all directors of PSI;
(5)
to
appoint general managers, deputy general managers, financial managers and other
senior managerial personnel of PSI;
(6)
to
convene shareholders' meetings of PSI in accordance with the Shareholders'
Voting Rights Proxy Agreement and sign resolutions of shareholders' meetings;
and
(7)
to
enjoy other rights and perform other obligations under the
Agreement.
Article
3
Representation and Warranties
The
Parties hereto hereby make the following representations and warranties to
each
other as of the date of this Agreement that the parties:
(1)
have
the right to enter into the Agreement and the ability to perform the
same;
(2)
the
execution and delivery of this Agreement by each party has 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 other reasons that will prevent this Agreement from becoming a
binding and effective agreement between both parties after
execution;
(5)
the
execution and performance of the obligations under this Agreement will not:
(a)
violate any provision of the business license, articles of association or other
similar documents of its own;
(b)
violate any provision of the laws and regulations of the PRC or other
governmental or regulatory authority or approval;
(c)
violate or result in a breach of any contract or agreement to which the party
is
a party or by which it is bound.
Article
4
Effectiveness
This
Agreement shall take effect after it is duly executed by the authorized
representatives of the parties hereto with seals affixed.
Article
5
Liability for Breach of Agreement
During
the term of this Agreement, any violation of any provisions herein by either
party constitutes breach of contract and the breaching party shall compensate
the non-breaching party for the loss incurred as a result of this
breach.
Article
6
Force Majeure
The
failure of either party to perform all or part of the obligations under the
Agreement due to force majeure shall not be deemed as breach of contract. The
affected party shall present promptly valid evidence of such force majeure,
and
the failure of performance shall be settled through consultations between the
parties hereto.
Article
7
Governing Law
The
conclusion, validity, interpretation, and performance of this Agreement and
the
settlement of any disputes arising out of this Agreement shall be governed
by
the laws and regulations of the People's Republic of China.
Article
8
Settlement of Dispute
Any
disputes under the Agreement shall be settled at first through friendly
consultation between the parties hereto. In case no settlement can be reached
through consultation, each party shall have the right to submit such disputes
to
China International Economic and Trade Arbitration Commission. The place of
arbitration is Beijing. The arbitration award shall be final and binding on
both
parties.
Article
9
Confidentiality
9.1
The
parties hereto agree to cause its employees or representatives who has access
to
and knowledge of the terms and conditions of this Agreement to keep strict
confidentiality and not to disclose any of these terms and conditions to any
third party without the expressive requirements under law or request from
judicial authorities or governmental departments or the consent of the other
party, otherwise such party or personnel shall assume corresponding legal
liabilities.
9.2
The
obligations of confidentiality under Section 9.1 of this Article shall survive
after the termination of this Agreement.
Article
10 Severability
10.1
Any
provision of this Agreement that is invalid or unenforceable due to the laws
and
regulations shall be ineffective without affecting in any way the remaining
provisions hereof.
10.2.
In
the event of the foregoing paragraph, the parties hereto shall prepare a
supplemental agreement as soon as possible to replace the invalid provision
through friendly consultation.
Article
11 Non-waiver of Rights
11.1
Any
failure or delay by any party in exercising its rights under this Agreement
shall not constitute a waiver of such right.
11.2
Any
failure of any party to demand the other party to perform its obligations under
this Agreement shall not be deemed as a waiver of its right to demand the other
party to perform such obligations later.
11.3
If a
party excuses the non-performance by other party of certain provisions under
this Agreement, such excuse shall not be deemed to excuse any future
non-performance by the other party of the same provision.
Article
12 Non-transferability
Unless
otherwise specified under this Agreement, no party can assign or delegate any
of
the rights or obligations under this Agreement to any third party nor can it
provide any guarantee to such third party or carry out other similar activities
without the prior written from the other party.
Article
13 Miscellaneous
13.1
Any
and all taxes arising from execution and performance of this Agreement and
during the course of the entrusted management and operation shall be borne
by
the Parties respectively pursuant to the provisions of laws and
regulations.
13.2
Any
amendment entered into by the parties hereto after the effectiveness of this
Agreement shall be an integral part of this Agreement and have the same legal
effect as part of this Agreement. In case of any discrepancy between the
amendment and this Agreement, the amendment shall prevail. In case of several
amendments, the amendment with the latest date shall prevail.
13.3
This
Agreement is executed by Chinese and English in duplicate, and in case of any
conflict the Chinese version shall prevail. Each of the original Chinese and
English versions of this Agreement shall be executed in 6 copies. Each party
shall hold two originals of each version, and the rest shall be used for
governmental registration or other necessary approval purposes.
13.4
In
witness hereof, the Agreement is duly executed by the parties hereto on the
date
first written above.
(Page
of
signature, no text)
Party
A:
_______________________
Xxxxxx
Xx
(signature)
_______________________
Xxxxxx
Xx
(signature)
_______________________
Xxxxxxxx
Xxx
(signature)
_______________________
Xxxxxx
Xxxxx
(signature)
_______________________
Xxxxxxx
Xxx
(signature)
_______________________
Xxxxxxx
Xx
(signature)
_______________________
Qiang
Sui
(signature)
_______________________
Xxxxxx
Xx
(signature)
________________________
Xxxxxxx
Xxx (signature)
(seal)
Party
B:
_______________________
Xxxxxxx
Xxxx
(signature)
