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.
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.
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.
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.
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.
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.
(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.
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.
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.
Voting Trustees:
_____________________________
_____________________________
_____________________________
Attorney-in-Fact for Holders:
_____________________________
_____________________________
_____________________________
