VOTING TRUST AND ESCROW AGREEMENT
THIS
VOTING TRUST AND ESCROW AGREEMENT (“Agreement”) is made and entered into as of
the 21st
day of
November, 2006 by and among the board members of Xi’an Amorphous Alloy Science
& Technology Co., Ltd. (“Alloy Science”), the holding company of Xi’an
Amorphous Alloy Zhongxi & Technology Co., Ltd. (“Zhongxi”), as
attorney-in-fact for each of the shareholders of China Power Equipment, Inc.
(the “Corporation”) set forth on Schedule A attached hereto (each a “Holder” and
collectively, the “Holders”), and Xxxxxx Xxxx and Xxxxx Xxxxx (“Voting
Trustees”).
RECITALS:
WHEREAS,
each of
the Holders shall own shares of voting common stock in the Corporation. Such
shares were issued by the Corporation in an aggregate number of 3,803,625
shares, which were determined
by the Corporation in consideration of the management entrustment agreement
between Zhongxi and An
Sen
(Xi'an) Power Science & Technology Co., Ltd., a PRC subsidiary 100% owned by
the Corporation.
WHEREAS,
the
stockholder meeting of Alloy Science held on November 21, 2006 (the “Alloy
Science 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 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, the Voting
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 Corporation on 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. Form.
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. THIS CERTIFICATE
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 UNDER THE SECURITIES ACT OF 1933 AND
ANY
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
TRANSFER, SALE, OFFER OR DISPOSITION.
|
No.
_________________________
|
_________________________Shares
|
_______________
[Holder’s
Name]
VOTING
TRUST CERTIFICATE FOR COMMON
STOCK
OF
CHINA POWER EQUIPMENT, INC. (the “Corporation”)
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 Agreement”) dated [DATE] among certain of the
shareholders (“Holders”) of China Power Equipment, Inc. (“Corporation”), and
[TRUSTEES] (“Voting Trustees”). Copies of the Voting Trust Agreement are kept on
file by the Voting Trustees in their offices at [ADDRESS], 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
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 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 Agreement,
the Voting Trustees shall hold such shares in accordance with the terms of
the
Voting Trust Agreement and shall issue Voting Trust Certificates in respect
thereof.
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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
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
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].
________________________________
_________________________,
Trustee
________________________________
_________________________,
Trustee
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 case of 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 Agreement, 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.
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.
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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 two. 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 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.
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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 as 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 Voting Trustees 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.
Any
such
expenses may be charged to the Holders of Voting Trust Certificates pro rata
according to the number of Shares represented by 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 herein, and the Voting Trustees shall be entitled
to a
lien therefor upon Shares, funds or other property in their
possession.
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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 respect of any
action taken 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 Voting Trust 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.
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.
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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 of Shares.
Each
Holder agrees (a) not to sell, transfer or convey any of the Shares or any
interests therein for at least two years 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 two years 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 or 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.
(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.
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(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 from 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.
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.
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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 two years 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 voting 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 Voting Trustees may
sell
certain amount of Shares for such expense. The voting trust created by this
Agreement is effective until the 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 Voting Trustee 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. Notice.
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
Zhongxi’s website .
Voting
Trustees:
Xxxxxx
Xxxx and Xxxxx Xxxxx
or
at
such other addresses as may be established by notice hereunder. Any notice
so
given shall be deemed effective 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.
9
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.
The
respective parties have caused this Agreement to be executed as of the date
first above written.
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Voting
Trustees:
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_________________________________
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_________________________________
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_________________________________
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Attorney-in-Fact
for Holders:
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_________________________________
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_________________________________
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_________________________________
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