VOTING TRUST AND ESCROW AGREEMENT
THIS VOTING TRUST AND ESCROWAGREEMENT ("Agreement") is made and entered into as
of the 22ed day of April, 2006 by and among the board members of Shaanxi Xxx
Xxxxx Centennial Agriculture and Technology Co., Ltd. ("Shaanxi Xinsheng"), as
attorney-in-fact for each of the shareholders of China Agri-Business, Inc. (the
attached hereto (each a "Holder" and collectively, the "Holders"), and Xxxx Xxx
hang, Xxx Xxxx Xxxx, Xxxx Xxxx Xxxx, Xxxx xxx, Xxxx Jun Sheng [Trustees]
("Voting Trustees").
RECITALS:
WHEREAS, each of the Holders shall own shares of voting common stock in
the Corporation which are to be acquired pursuant a Stock Purchase Agreement
between the Holders and the Corporation under which the Holders are to be issued
an aggregate number of shares of common stock of the Corporation, such number
may be determined by the Corporation through the discussion with underwriters,
in consideration of the management entrustment agreement between Shaanxi Xin
Agri Technology (Shaanxi) Co., Ltd., a PRC subsidiary 100% owned by the
Corporation.
WHEREAS, the stockholder meeting of Shaanxi Xinsheng held on April 10,
2006 (the "Xinsheng Stockholder Meeting") resolved that this Agreement has been
approved and it is in the best interest of the parties to this agreement and the
Corporation that this Agreement is to be made.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and
obligations set forth herein, the parties agree as follows:
1. Voting Trust.
1.1. Creation of Voting Trust. The Voting Trustees, and each of
them, are hereby appointed voting trustees under the voting trust created by
this Agreement. During the term of this Agreement the Voting Trustees shall act
as voting trustees in respect of the tendered shares of stock in the
Corporation, and any additional voting shares subsequently received by the
Voting Trustees as a result of the operation of this Agreement (such tendered
shares and subsequent shares to be collectively referred to as the "Shares"),
with all the powers, rights and privileges and subject to all the conditions and
covenants hereinafter set forth.
1.2. Issue of Share Certificates To Voting Trustees. After the
execution and delivery of the Stock Purchase Agreement between the Corporation
and the Holders and the execution and delivery of this Agreement, when the
Corporation issues shares to the Holders, it shall issue the shares in the name
of the Voting Trustees one stock certificate representing the aggregate of the
shares to Holders. The Voting Trustees are authorized and empowered to cause to
be made any further transfers of the Shares which may become necessary through
the occurrence of any change of persons holding the office of Voting Trustee.
1.3. Delivery of Voting Trust Certificates. Upon receipt by the
Voting Trustees of the certificate for the Shares, theVoting Trustees shall hold
the Shares, in trust, subject to the terms and conditions of this Agreement and
shall deliver or cause to be delivered to each Holder voting trust certificates
("Voting Trust Certificates" or "Certificates"), in the form provided for in
Section 2.1, representing in the aggregate the total number of Shares deposited
by each Holder. The fact that such certificates are issued pursuant to this
Agreement shall be noted by the corporationon its stock transfer records.
1.4. Acceptance of Trust. The Voting Trustees accept the trust
created hereby in accordance with all of the terms and conditions contained in
this Agreement. The Shares shall be held by the Voting Trustees for the purposes
of and in accordance with this Agreement, and none of the Shares, or any
interest therein, shall be sold or otherwise disposed of, pledged or encumbered
by the Voting Trustees, except as provided in this Agreement.
2. Voting Trust Certificates.
2.1. The Voting Trust Certificates to be issued and delivered by
the Voting Trustees under this Agreement in respect of the Shares shall be
substantially in the following form, with such changes therein consistent with
the provisions of this Agreement as the Voting Trustees and the attorney-in-fact
for the Holders may from time to time approve:
THIS CERTIFICATE AND THE SECURITIES REPRESENTED BY IT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THISCERTIFICATE
AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
OFFERED FOR SALE OR OTHERWISE DISPOSED OF UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT OR OTHER QUALIFICATION RELATING TO THE CERTIFICATE AND
SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE CORPORATION AND VOTING TRUSTEES RECEIVE AN OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION AND VOTING TRUSTEES THAT SUCH
REGISTRATION OR OTHER QUALIFICATION UNDERTHE SECURITIES ACTOF 1933 AND ANY
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
TRANSFER, SALE, OFFER OR DISPOSITION. THE REGISTRATION IS IN PROCESS, THE
COMPLETION OF WHICH WILL BE INFORMED TO THE HOLDER BY ANNOUNCEMENT ON THE
COMPANY'S WEBSITE.
No. _________________________ _________________ Shares
Names: _______________________ ID Card number: _____________________
VOTING TRUST CERTIFICATE FOR COMMON
STOCK OF CHINA AGRI-BUSINESS, INC.
THIS IS TO CERTIFY THAT:
1. This voting trust certificate is issued pursuant to, and the rights
of the holder hereof are subject to the terms and conditions of, a Voting Trust
and Escrow Agreement (the "Voting Trust and Escrow Agreement") dated [DATE]
among certain of the shareholders ("Holders") of CHINA AGRI-BUSlNESS, INC.
("Corporation"), and [TRUSTEES] ("Voting Trustees"). Copies of the Voting Trust
Agreement are kept on file by the Voting Trustees in their offices at Finance
Plaza 9 floor Hi-tech Road 42#, Hi-tech industrial development Zone, Xi'an,
Shaanxi, China, have been deposited with the Corporation at its registered
office (or with the officer or agent having charge of its stock transfer books),
and are open to inspection in accordance with the requirement of law.
2. By acceptance of this certificate, the Holder thereof, and every
transferee, agrees to be bound by the terms of this certificate and of the
Voting Trust and Escrow Agreement.
3. Upon the termination of the Voting Trust Agreement, the Holder shall
be entitled to receive a certificate or certificates for shares upon the release
of such shares pursuant to Section 9.2 of the Voting Trust Agreement. Until such
receipt or release the Holder shall from time to time be entitled to receive
from the Voting Trustees dividends and distributions payable in cash and
property other than voting stock of the
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Corporation, if any, received by or for the account of the Voting Trustees upon
such shares. If the Voting Trustees shall receive any additional shares issued
by way of dividend upon, or in exchange for the certificates for shares
represented by this certificate, or upon the exercise of any right of
subscription pursuant to Section 3.2 of the Voting Trust and Escrow Agreement,
the Voting Trustees shall hold such shares in accordance with the terms of the
Voting Trust and Escrow Agreement and shall issue Voting Trust Certificates in
respect thereof.
4. Until the re-transfer to the Holder hereof of certificates for the
shares represented by this certificate, the Voting Trustees shall possess and be
entitled to exercise all rights and powers to vote the shares as provided in the
Voting Trust and Escrow Agreement, and no Holders of this certificate shall in
such capacity have any rights or powers to vote such shares.
5. This certificate is transferable only on the books of the Voting
Trustees to be kept by them, or their agents, upon surrender hereof (duly
endorsed in blank or accompanied by a proper instrument or assignment duly
executed in blank, together with all requisite transfer tax stamps attached
thereto and an amount sufficient to pay all Federal, state and local taxes or
other governmental charges, if any, then payable in respect of such transfer) by
the registered Holder in person or by such Holder's duly authorized attorney.
Until this certificate is so transferred, the Voting Trustees may treat the
registered Holder hereof as the absolute owner hereof for all purposes
whatsoever. The rights and powers to transfer this certificate are expressly
limited by and subject to the transfer restrictions contained in the Voting
Trust and Escrow Agreement.
6. This certificate is not valid unless signed by the Voting Trustees.
The undersigned Voting Trustees have caused this certificate to be signed this
__________ [DATE].
_______________________, T r u s t e e
_______________________, T r u s t e e
2.2. Restrictions on Certificate Transfers
2.2.1. Applicability of Restrictions. The restrictions on
transfer of Voting Trust Certificates are intended to apply during the term of
the voting trust created under in this Agreement.
2.2.2. Restriction on Lifetime Disposition. No Holder shall
dispose of (and the terms "dispose of and "disposition" as used in this
Agreement mean any sale, transfer, assignment, pledge, mortgage, distribution or
other form of disposition or conveyance, whether voluntary, involuntary, or by
operation of law, or in the caseof a non-individual Holder, pursuant to a
merger, consolidation, sale of assets or other reorganization, and whether
testamentary or inter vivos) all or any part of his interest in a Voting Trust
Certificate issued hereunder, except under the conditions set forth in this
Agreement. Until the termination of this Agreement, each Voting Trust
Certificate shall remain subject to this Agreement even though an offer or
offers are made under this Agreement, but not accepted. Each person, personal
representative, entity or successor in interest who acquires an interest in a
Voting Trust Certificate issued hereunder shall hold it subject to the terms of
this Agreement. Every transferee of a Voting Trust Certificate, by the
acceptance of such Certificate, shall become a party to this Agreenient, and
shall assume all rights and obligations which the transferor had under this
Agreement.
2.2.3. Disposition Upon Death. Upon the death of a Holder, the
estate of the deceased Holder (or the distributee of the estate) shall be deemed
to have succeeded to the decedent's interest in this Agreement, and shall be
deemed to have agreed to assume decedent's obligations under this Agreement.
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2.3 Transfer; Registered Holder; Transfer Books. The Voting
Trustees shall keep available for inspection by holders at the office of the
Voting Trustees set forth in the Voting Trust Certificate (or at such other
office of which the holders thereof have been notified in writing) correct and
complete books and records of account relating to the voting trust created by
this Agreement and a record of all Holders. The Voting Trust Certificates shall
be transferable only on the books of the Voting Trustees, upon surrender of such
Voting Trust Certificates (duly endorsed in blank or accompanied by a proper
instrument of assignment duly executed in blank, together with all requisite
transfer tax stamps attached thereto and an amount sufficient to pay all
Federal, State and local taxes or other governmental charges, if any, then
payable in connection with such transfer) by the registered Holder in person or
by such Holder's duly authorized attorney. Upon the surrender of any Voting
Trust Certificate for transfer, the Voting Trustees shall cancel such Voting
Trust Certificate and issue to the transferee (and to the registered holder of
such Voting Trust Certificate, in the case of a partial transfer) a new Voting
Trust Certificate or Certificates in the same form and representing in the
aggregate the same number of Shares of the corporation as the Voting Trust
Certificates presented for cancellation. Any Voting Trust Certificate or
Certificates may be exchanged for another Voting Trust Certificate or other
Voting Trust Certificates for a like aggregate amount, but in different
denominations.
2.4. Record Ownership. The Voting Trustees may treat the
registered Holder of each such Voting Trust Certificates as the absolute owner
thereof for all purposes whatsoever, and accordingly shall not be required to
recognize any legal, equitable or other claim or interest in such Voting Trust
Certificate on the part of any other person, whether or not the Voting Trustees
shall have express or other notice thereof.
2.5. Replacement of Mutilated or Lost Certificates. In case any
Voting Trust Certificate shall become mutilated or be destroyed, lost or stolen,
the registered Holder thereof shall immediately notify the Voting Trustees, who,
subject to the following sentence, shall issue and deliver to such Holder a new
Voting Trust Certificate of like tenor and denomination in exchange for and upon
cancellation of the Voting Trust Certificate so mutilated, or in substitution
for the Voting Trust Certificate so destroyed, lost or stolen. The applicant for
such substituted Voting Trust Certificate shall furnish proof reasonably
satisfactory to the Voting Trustees of such destruction, loss or theft, and,
upon request, shall furnish indemnity reasonably satisfactory to the Voting
Trustees and shall comply with such other reasonable requirements as the Voting
Trustees may prescribe.
3. Dividends and Distributions; Subscriptions.
3.1. Dividends or Distributions Payable in Cash or Other
Property. The Voting Trustees shall, from time to time, pay or cause to be paid
to Holders, their pro rata share of any dividends or distributions payable in
cash or property, other than voting stock of the Corporation, collected by the
Voting Trustees upon the Shares deposited hereunder. For the purpose of making
any such payment, or for any other purpose, the Voting Trustees may, in their
discretion, fix such date as they may reasonably determine as a record date for
the determination of persons entitled to any payments or other benefits
hereunder, or order their transfer books closed for such period or periods, of
time as they shall deem proper.
3.2. Share Dividends or Distributions. The Voting Trustees shall
receive and hold subject to the terms of this Agreement, any voting stock of the
Corporation issued in respect of the Shares by reason of any recapitalization
share dividend, split combination or the like and shall issue and deliver Voting
Trust Certificates therefor to the Holders in proportion to their respective
interests therein as shown on the books of the Voting Trustees.
4. Matters Relating to Administration of Voting Trust; Voting.
4.1 Action by Voting Trustees. The number of Voting Trustees
shall be _____ . In all matters except as expressly provided for in this
Agreement, the Voting Trustees shall act as a group. The action of a majority of
the entire number of Voting Trustees as stated above, expressed from time to
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time at a meeting, or by a writing without a meeting, shall, except as otherwise
herein stated, constitute the action of the Voting Trustees and shall have the
same effect as if assented to by all. At any meeting of the Voting Trustees, any
Voting Trustee may vote in person or by written proxy given to any other Voting
Trustee; and any Voting Trustee may give a power of attorney to any other Voting
Trustee to sign for him in case of action of the Voting Trustees taken in
writing without a meeting. The Voting Trustees may adopt their own rules of
procedure.
4.2. Rights and Powers of Voting Trustees. The Voting Trustees
shall possess and be entitled, subject to the provisions hereof, in their
discretion, to exercise all the rights and powers of absolute owners of all
Shares, including, but without limitation, the right to receive dividends on
Shares, and the right to vote, consent in writing or otherwise act with respect
to any corporate or shareholders' actions. Such corporate or shareholders'
actions include, but are not limited to, any increase or reduction in the stated
capital of the Corporation, any classification or reclassification of any of the
shares as now or hereafter authorized into preferred or common stock or other
classes of shares with or without par value, any amendment to the Articles of
Incorporation or Bylaws, any merger or consolidation of the Corporation with
other corporations, any sale of all or any part of its assets, and the creation
of any mortgage or security interest in or lien on any property of the
Corporation. It is expressly stipulated that no voting right shall pass to
others by or under the Voting Trust Certificates, or by or under this Agreement,
or by or under any other express or implied agreement.
4.3. Reserved.
4.4, Trustee Removal. The Voting Trustees may be individually
removed by the affirmative vote of, or by a written instrument or instruments
signed by, the Holders of Voting Trust Certificates representing 80% of the
Shares in the Voting Trust created hereunder.
4.5. Resignation. A Voting Trustee may resign at any time by
delivering his resignation in writing to the Holders, to take effect sixty days
after the date of such delivery, whereupon all powers, rights and obligations of
the resigning Voting Trustee, under this Agreement shall cease and terminate,
except provided in this Agreement. If a successor Voting Trustee shall not have
been appointed within sixty days after the giving of such written resignation,
the Voting Trustees may apply to any court of competent jurisdiction to appoint
a successor Voting Trustee to act until such time if any, as a successor shall
have been appointed as provided in Section 4.6.
4.6. Vacancies. If any vacancy shall occur in the position of
Voting Trustee by reason of the death, removal, resignation, inability or
refusal to act of a Voting Trustee, or otherwise; such vacancy shall be filled
by the appointment of a successor by the Attorney-in-fact of the Holders. If
there is at any time a vacancy in the office of Voting Trustee, the voting power
of the shares of the Corporation evidenced by the Voting Trust Certificates
shall continue to be exercised by the remaining Voting Trustees. Any successor
Voting Trustee appointed as herein provided shall indicate his acceptance of
such appointment by signing counterparts of this Agreement and delivering such
counterparts to the Holders, and thereupon such successor shall be vested with
all the rights, powers, duties and immunities herein conferred upon the Voting
Trustees as if such successor had been originally a party to this Agreement as a
Voting Trustee. The term "Voting Trustees" as used in this Agreement shall apply
to and mean the original Voting Trustee hereunder and any successor.
4.7. Expenses. etc. The Holders shall reimburse the Voting
Trustees for all reasonable expenses, including counsel fees, incurred by them
in connection with the exercise of their powers and the performance of their
duties under this Agreement.
The Holders shall reimburse the VotingTrustees for the cost of
all transfer tax stamps required and all Federal, State and local taxes payable
in connection with the deposit of the Shares in the voting trust pursuant to
this Agreement and in connection with the re-transfer by the Voting Trustees of
the shares to the Holders upon the surrender of such certificates.
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Any such expenses may be charged to the Holders of Voting Trust Certificates pro
rata according to the number of Shares represented the Certificates, and may be
deducted from dividends or other distributions to them, or may be made a charge
payable as a condition to the delivery of Shares in exchange for Voting Trust
Certificates as provided xxxxx, and the Voting Trustees shall be entitled to a
lien therefor upon Shares, funds or other property in their possession.
4.8. Indemnification. The Holders shall indemnify and hold the
Voting Trustees harmless from and against any and all liabilities, losses,
costs, and expenses, including reasonable attorneys' fees, in connection with or
arising out of the administration of the voting trust created by this Agreement
or the exercise of any powers or the performance of any duties by them as herein
provided or contemplated, to the fullest extent permitted under the law.
4.9. Reliance on Advice of Counsel. The Voting Trustees may
consult with counsel concerning any question which may arise with reference to
their duties or authority under this Agreement or any of the provisions hereof
or any matter relating hereto, and the opinion of such counsel shall be a full
and complete authorization and protection in respgctf any actiontaken or omitted
by the Voting Trustees here under in good faith and in accordance with such
opinion of counsel, and the Voting Trustees shall not be liable for any damages
sustained as a result thereof.
4.10. No Duty to Investigate. The Voting Trustees shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document submitted to the
Voting Trustees.
4.11. Interest of Voting Trustees. The Voting Trustees assume no
liability as shareholders, their interest hereunder being that of trustees only.
The Voting Trustees will vote the Shares on all matters in accordance with the
provisions of this Agreement, but they shall have no implied obligations and
they assume no responsibility in respect of any action taken (or not taken) in
pursuance of their votes so cast.
4.12. Compensation of Voting Trustees. No Voting Trustee shall be
compensated for his service hereunder.
5. Holders of Voting Trust Certificates Bound.
All Voting Trust Certificates issued under this Agreement shall be issued,
received, and held subject to all of the terms of this Agreement. Every
registered Holder of a Voting Trust Certificate, and every bearer of a
VotingTrust Certificate properly endorsed in blank or properly assigned, by the
acceptance or holding thereof shall be deemed conclusively for all purposes to
have assented to this Agreement and to all of its terms, conditions and
provisions and shall be bound by this Agreement with the same force and effect
as if such Holder or bearer had been originally a party to this Agreement.
6. Dissolution of Corporation.
In the event of the dissolution or total or partial liquidation of the
Corporation, whether voluntary or involuntary, the Voting Trustees shall receive
the moneys, securities, rights or property to which the Holders' of Shares are
entitled, and shall distribute the same among the Holders in proportion to their
interests. Alternatively, the Voting Trustees may in their discretion deposit
such moneys, securities, rights or property with any bank or trust company doing
business in [LOCATION], with authority and instructions to distribute the same
as above provided, and upon such deposit all further obligations or liabilities
of the Voting Trustees in respect of such moneys, securities, rights or property
so deposited shall cease.
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7. Reorganization of Corporation.
In case the corporation is merged into or consolidated with another
corporation, or all or substantially all of the assets of the Corporation are
transferred to another corporation, then in connection with such transfers the
term "Corporation" for all purposes of this Agreement shall be taken to include
such successor corporation, and the Voting Trustees shall receive and hold under
this Agreement any voting stock of such successor corporation received on
account of the ownership, as Voting Trustees hereunder, of Shares held hereunder
prior to such merger, consolidation or transfer. Voting Trust Certificates
issued and outstanding under this Agreement at the time of such merger,
consolidation or transfer may remain outstanding, or the Voting Trustees may, in
their discretion, substitute for such Voting Trust Certificates new voting trust
certificates in appropriate form, and the term "Shares" as used herein shall be
taken to include any shares which may be received by the Voting Trustees in lieu
of all or any part of the shares of the Corporation.
8. Escrow Provisions.
8.1. Appointment of Voting Trustees as Escrow Agent. The
Corporation and each Holder hereby appoint the Voting Trustees as escrow and
selling agent in accordance with the terms and conditions set forth herein, and
the voting Trustees hereby accept such appointment. (The Voting Trustees, in
their capacity as escrow and selling agent hereunder, are referred to herein as
the "Agent.")
8.2 Covenants of Holders Regarding Sale ofShares. Each Holder
agrees (a) not to sell, transfer or convey any of the Shares or any interests
therein for at least one year after the issuance to such Holder of a Voting
Trust Certificate or Voting Trust Certificates for such shares and (b) if, after
the expiration of the one year period set forth in clause (a) of this Section
8.2, such Holder desires to sell all or a portion of such Shares, the Holder
shall give the Voting Trustee a written authorization to sell all of a specific
number of Shares owned by the Holder (the "Sale Notice").
8.3 Sale of Shares by Agent. Upon receipt of a Sale Notice, the
Agent shall use commercially reasonable efforts to sell the Shares authorized in
the Sale Notice to be sold. The Agent shall be deemed to have acted in a
commercially reasonable manner if (a) within 30 days after its receipt of the
Sale Notice, it directs a licensed broker-dealer ("Broker") to sell in one or
more transactions at the prevailing market price at the time of sale the Shares
authorized by the Holder to be sold, (b) directs the Broker to remit all of the
net proceeds of such sale to the Agent, (c) delivers or causes to be delivered
to the appropriate person on a timely basis for settlement of the sale, any
certificate for the Shares which are sold and (d) within 30 days after receipt
of the net proceeds of the sale of the Shares remits to the Holders such net
proceeds. Notwithstanding the foregoing, the Agent may take such actions as it
deems reasonable and appropriate to limit the sale of Shares or disregard the
Sales Notice during any period where such sales may have a significant
detrimental effect of the market price of the shares or where such sales would
violate applicable securities laws.
8.4 Exculpation and Indemnification of Agent.
(a) The Agent shall have no duties or responsibilities other
than those expressly set forth herein. The Agent shall have no duty to enforce
any obligation of any person to make any payment or delivery, or to direct or
cause any payment or delivery to be made, or to enforce any obligation of any
person to perform any other act. The Agent shall be under no liability to the
other parties hereto to anyone else, by reason of any failure, on the part of
any party hereto or any maker, guarantor endorser or other signatory of any
document of any other person, to perform such person's obligations under any
such document. Except for amendments to this Agreement, the Agent shall not be
obligated to recognize any agreement between any and all of the persons referred
to herein, notwithstanding that references hereto may be made herein and whether
or not it has knowledge thereof.
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(b) The Agent shall not be liable to any party hereto or to
anyone else for any action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith and acting upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the
Agent) statement, instrument, report, or other paper or document (not only as to
its due execution and the validity and effectiveness of its provisions, but also
as to the truth and acceptability of any information therein contained), which
is believed by the Agent to be genuine and to be signed or presented by the
proper person or persons. The Agent shall not be bound by any of the terms
thereof, unless evidenced by a writing delivered to the Agent signed by the
proper party or parties and, if the duties or rights of the Agent are affected,
unless it shall give its prior written consent thereto.
(c) The Agent shall not be responsible for the sufficiency
or accuracy of the form, or of the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Agent be responsible or liable to the
other parties hereto or to anyone else in any respect on account of the
identity, authority or rights, of the person executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Agent shall have no responsibility with respect to the use or application of any
funds or shares or other property paid or delivered by the Agent pursuant to the
provisions hereof.
(d) The Agent shall have the right to assume, in the absence
of written notice to the contrary from the proper person or persons, that a fact
or an event, by reason of which an action would or might be taken by the Agent,
does not exist or has not occurred, without incurring liability to the other
parties hereto or to anyone else for any action taken or omitted, or any action
suffered by it to be taken or omitted, in good faith and in the exercise of its
own best judgment, in reliance upon such assumption.
(e) To the extent that the Agent becomes liable for the
payment of taxes; including withholding taxes, in respect of income derived from
the investment of funds or securities held hereunder or any payment made
hereunder, the Agent may pay such taxes. The Agent may withhold ffrom any
payment of monies held by it hereunder such amount as the Agent estimates to be
sufficient to provide for the payment of such taxes not yet paid, and may use
the sum withheld for that purpose. The Agent shall be indemnified and held
harmless against any liability for taxes and for any penalties in respect of
taxes, on such investment income or payments in the manner provided herein.
(f) The Agent will be indemnified and held harmless by the
Corporation and each Holder from and against all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Agent in connection with
any action, suit or proceeding involving any claim, or in connection with any
claim or demand, which in any way, directly or indirectly, arises out of or
relates to this Agreement, the services of the Agent hereunder, except for
claims relating to gross negligence by Agent or breach of this Agreement by the
Agent, or the monies or other property held by it hereunder. Promptly after the
receipt by the Agent of notice of any demand or claim or the commencement of any
action, suit or proceeding, the Agent shall, if a claim in respect thereof is to
be made against the Corporation or a Holder, notify each of them thereof in
writing, but the failure by the Agent to give such notice shall not relieve from
any liability which the Corporation or the Holder may have to the Agent
hereunder. Notwithstanding any obligation to make payments and deliveries
hereunder, the Agent may retain and hold for such time as it deems necessary
such amount of monies or property as it shall, from time to time, in its sole
discretion, deem sufficient to indemnify itself for any such loss or expense and
for any amounts due it hereunder. For the purpose hereof, the term "expense or
loss" shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim demand, action, suit or proceeding
settled with the express written consent of the Agent, the Corporation and the
Holder, and all costs and expenses, including, but not limited to, reasonable
counsel fees and disbursements paid or incurred in investigating or defending
against any such claim, demand, action, suit or proceeding.
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8.5 Resignation of Agent. The Agent may resign at any time and be
discharged from its duties as Agent hereunder by giving the Corporation and the
Holders at least 60 days' written notice thereof. As soon as practicable after
its resignation, the Agent shall, turn over to a successor escrow agent
appointed by the parties hereto all monies and properties held hereunder (less
such amount as the Agent entitled to retain pursuant to this Agreement) upon
presentation of the document appointing the new escrow agent and its acceptance
thereof. If no new agent is so appointed within the 60-day period following such
notice of resignation, the Agent may deposit the aforesaid monies and property
with any court it deems appropriate.
9. Term; Release of Shares.
9.1. Term. Each of the Holders may terminate this Agreement and
the voting trust created hereby as to himself after the expiration of the one
year period set forth in clause (a) of Section 8.2 of the Agreement by prior
written request; the rest of the Holders may leave their shares in the voting
trust and this Agreement is effective until they choose to take the shares out
of the veting trust by a prior written request.
9.2. Exchange of Shares and Voting Trust Certificates. Upon the
termination of this Agreement as to the Shares of Holder(s), the Voting
Trustees, in exchange for and upon surrender of any Voting Trust Certificate
then outstanding with respect to such shares, shall, in accordance with the
terms thereof and out of the Shares received and held by them hereunder, cause
the Corporation to deliver to the Holder(s), certificates for Shares represented
by such Voting Trust Certificate at the expense of such Holder(s). If the
Holder(s) refuse to pay the expense so incurred, the VotingTrustees may sell
certain amount of Shares for such expense. The voting trust created by this
Agreement is effective until th Holder(s) receive the certificates for shares
represented by the Voting Trust Certificate. Furthermore, if any such delivery
shall take place (i) after the record date for establishing holders of Shares
entitled to vote at a meeting of stockholders but (ii) prior to the date of such
meeting of stockholders, the Voting Trustees shall deliver with the certificates
for Shares an irrevocable proxy authorizing the person in whose name the
certificates for Shares are registered to vote such Shares at such meeting.
10. New Subscribers.
Any holder of shares of the corporation may at any time become a
subscriber hereto with respect to any such shares by subscribing to this
Agreement and depositing the certificate representing his shares, accompanied by
duly executed instruments of transfer.Such subscribers shall then become Holders
as if they were original parties to this Agreement.
11. Miscellaneous.
11.1. Benefits of this Agreement; Survival. The terms of this
Agreement shall be binding upon and inure to the benefit of and shall be
enforceable by the Holders, the Voting Trustees, and their respective successors
and assigns. The rights of the VotingTrustee under Sections 4.7 and 4.8 and of
the Holders of Voting Trustee Certificates under Section 9.2 shall survive any
termination of this Agreement or any resignation or removal of any Voting
Trustee pursuant to the terms of this Agreement.
11.2. Any notice, request, offer, acceptance or other
communication permitted or required to be given hereunder to the Voting Trustees
shall be sent by certified mail or by courier service, return receipt requested,
or hand-delivered to such person at the address set forth below:
Holders: to the Escrow Agent or if the Escrow Agent gives written
notice to the Voting Trustees that the Escrow Agreement has been terminated,
then by an announcement on Shaanxi Xinsheng's website.
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Voting Trustees: [NAMES AND ADDRESSES]
or at such other addresses as may be established by notice hereunder. Any notice
so given shall be deemed effeclive at the time of delivery indicated on the duly
completed postal service or courier receipt or when hand-delivered.
11.3. Severability. In case any provision of this Agreement shall
be held to be invalid or unenforceable in whole or in part, neither the validity
nor the enforceability of the remainder of this Agreement shall be in any way
affected.
11.4. Descriptive Headings; Gender. The headings in this
Agreement are for the convenience of reference only and shall not limit or
otherwise affect the provisions hereof. The use of the masculine gender shall be
deemed to include the feminine and neuter gender.
11.5. Counterparts of this Agreement. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.
11.6. Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the State of New York.
11.7. Dispute Resolution. Any disputes under this Agreement shatl
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 in Beijing. The arbitration
award shall be final and binding on both parties.
The respective parties have caused this Agreement to be executed
as of the date first above written.
Voting Trustees:
Attorney-in-fact for Holders
/S/
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