Proxy Agreement
Proxy
Agreement
This
Proxy Agreement (the “Agreement”) is entered into as of September 6, 2006 among
the following parties:
Party
A:
|
Lotus
Pharmaceutical International, Inc.
Registered
Address:
Boca
Corporate Plaza, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx
00000, the United States of America
Chairman:
Xxx Xxxxxxx
|
Party
B: The
undersigned three shareholders of Beijing En Ze Xxx Xxx Pharmaceutical Co.,
Ltd., a
limited
liability company organized under the laws of the PRC, a corporation
incorporated under the laws of the People’s Republic of China (“En Ze Xxx
Xxx”).
In
this
Agreement, Party A and Party B are called collectively the “Parties” and each of
them is individually called a “Party.”
WHEREAS:
A.
Party
A
is a corporation incorporated under the laws of the State of Nevada, the United
States which engages in the business of pharmaceuticals.
B.
As
of the
date of the Agreement, Party B constitutes all of the shareholders of En Ze
Xxx
Xxx and each legally holds the equity interest in En Ze Xxx Xxx set forth
opposite Party B’s name below. The total shares held by Party B collectively
represent 100% of total outstanding shares of En Ze Xxx Xxx.
C.
Party
B
desires to grant to the Board of Directors of Party A a proxy to vote all of
Party B’s shares in En Ze Xxx Xxx for the maximum period of time permitted by
law in consideration of the issuance to Party B of shares and for other good
and
valuable consideration.
NOW
THEREFORE, the Parties hereby agree as follows:
| 1. |
Party
B hereby agrees to irrevocably grant and entrust Party A, or any
of Party
A’s designees (“Designee”), for the maximum period permitted by law with
all of Party B’s voting rights as a shareholder of En Ze Xxx Xxx. Party A
or Designee shall exercise such rights in accordance with and within
the
limitations of the laws of the PRC and the Articles of Association
of En
Ze Xxx Xxx, including without limitation, the attendance at and the
voting
of such shares at the shareholder’s meeting of En Ze Xxx Xxx (or by
written consent in lieu of a meeting) in accordance with applicable
laws
and its Articles of Association, including but not limited to the
rights
to sell or transfer all or any of his equity interests of the En
Ze Xxx
Xxx, and appoint and vote the directors as the authorized representative
of the shareholders of En Ze Xxx
Xxx.
|
| 2. |
Party
A may from time to time establish and amend rules to govern how Party
A
shall exercise the powers granted to it by Party B herein, including,
but
not limited to, the number of directors of Party A which shall be
required
to authorize or take any action and to sign documents evidencing
the
taking of such action, and Party A shall only take action in accordance
with such rules.
|
| 3. |
All
Parties to this Agreement hereby acknowledge that, regardless of
any
change in the equity interests of En Ze Xxx Xxx, Party B shall appoint
the
person designated by Party A with the voting rights held by Party
A. Party
B hereby acknowledges that if Party A withdraws the appointment of
the
person designated by Party A, Party B will withdraw the appointment
and
authorization to this person and authorize other persons, in substitution,
designated by Party A for exercising shareholder voting rights and
other
rights of themselves at the shareholder meetings of En Ze Xxx
Xxx.
|
| 4. |
Party
B shall not transfer its equity interests of En Ze Xxx Xxx to any
individual or company (other than Party A or the individuals or entities
designated by Party A). Each shareholder comprising Party B acknowledges
that it will continue to perform this Agreement even if one or more
of
such shareholders no longer hold the equity interests of En Ze Xxx
Xxx.
|
| 5. |
This
Agreement has been duly executed by the Parties, and, in the case
of a
Party which is not a natural person, has been duly authorized by
all
necessary corporate or other action by such Party and executed and
delivered by such Party’s duly authorized representatives, as of the date
first set forth above and shall be effective simultaneously.
|
| 6. |
Party
B represents and warrants to Party A that Party B owns all of the
shares
of En Ze Xxx Xxx set forth below its name on the signature page below,
free and clear of all liens and encumbrances, and Party B has not
granted
to anyone, other than Party A, a power of attorney or proxy over
any of
such shares or in Party B’s rights as a shareholder of En Ze Xxx Xxx.
Party B further represents and warrants that the execution and delivery
of
this Agreement by Party B will not violate any law, regulations,
judicial
or administrative order, arbitration award, agreement, contract or
covenant applicable to Party B.
|
-2-
| 7. |
This
Agreement may not be terminated without the unanimous consent of
both
Parties, except that Party A may, by giving thirty (30) days prior
written
notice to Party B hereto, terminate this
Agreement.
|
| 8. |
Any
amendment and/or rescission shall be agreed by the Parties in
writing.
|
| 9. |
The
execution, validity, construction and performance of this Agreement
shall
be governed by the laws of PRC.
|
| 10. |
This
Agreement is executed in Chinese and English in four (4) copies;
Party A
and each of Party B holds one and each original copy has the same
legal
effect. This Agreement has both an English version and a Chinese
version.
Both versions are equally authentic. Where a comparison of the authentic
texts of both versions of this Agreement discloses a difference in
meaning, the meaning which best reconciles the texts, having regard
to the
object and purpose of this Agreement shall be
adopted.
|
| 11. |
Both
Parties agree that in case of disputes arising from this Agreement,
both
Parties shall settle their dispute through mediation, not in a lawsuit
brought in Court. If the Parties cannot reach a settlement 45 days
after
the mediation, the dispute shall be referred to and determined by
arbitration in the China International Economic and Trade Arbitration
Commission (“CIETAC”) upon the initiation of either Party in accordance
with the prevailing arbitration rules of CIETAC. The written decision
of
the arbitrator shall be binding and conclusive on the Parties hereto
and
enforceable in any court of competent
jurisdiction.
|
[Signature
Page Follows]
-3-
IN
WITNESS WHEREOF, the parties have executed and delivered this Proxy Agreement
as
of the date first written above.
Party
A:
Lotus
Pharmaceutical International, Inc.
/s/
Xxx Xxxxxxx
Xxx
Xxxxxxx
Chairman
Party
B:
/s/
Xxx Xxxxxxx
By:
Xxx
Xxxxxxx
(PRC
ID
Card No.: 110106611008275)
Shares
of
En Ze Xxx Xxx owned by Xxx Xxxxxxx: 52.6 %
/s/
SONG Zhenghong
By:
SONG
Zhenghong
(PRC
ID
Card No.: 110106196711082783)
Shares
of
En Ze Xxx Xxx owned by SONG Zhenghong: 47.4 %
-4-
