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Shareholders Agreement SHAREHOLDERS AGREEMENT THIS SHAREHOLDERS AGREEMENT “Agreement”

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Shareholders Agreement SHAREHOLDERS AGREEMENT THIS SHAREHOLDERS AGREEMENT “Agreement” Powered By Docstoc
					                                  SHAREHOLDERS AGREEMENT

THIS SHAREHOLDERS AGREEMENT (“Agreement”) is made in [Insert Administrative Area],
PRC on the           day of 20 [ ]
BETWEEN:

Party A:

[Insert Individual Shareholder’s Name]
Residential Address:
ID Card No.:



Party B:

[Insert Institutional Shareholder’s Name]
Registered Office:
Legal Representative:

RECITAL
A.      In accordance with the Company Law of the People’s Republic of China (“Company Law”) and
other relevant PRC laws, decrees and regulations, Party A and Party B, adhering to the principle of
equality and mutual benefit and through friendly consultations, hereby agree to jointly invest to set up
[Insert Company’s Name] Limited (“Company”) in [Insert Administrative Area], PRC.

B.       The parties hereto have agreed to enter into this Agreement for the purpose of regulating their
rights and obligations in relation to the Company.
NOW THEREFORE, THE PARTIES HERETO HEREBY AGREED AS FOLLOWS:
1.       INTERPRETATION
In this Agreement, the following terms shall (unless the context otherwise requires) have the meanings
set out opposite them below respectively:
“Affiliate” means (i) in the case of an entity, any Person who or which, directly or indirectly, through
one or more intermediaries, controls or is controlled by or is under common control with any specified
Person or (ii) in the case of an individual, such individual’s spouse, children, grandchildren or parents or
a trust primarily for the benefit of any of the foregoing.
 “Articles of Association” means the articles of association of the Company then in effect, as
mentioned from time to time;

“Board” means the board of directors of the Company, as constituted from time to time;
“Director” means a director of the Company;
“Person” means any individual, partnership, corporation, limited liability company, joint venture, trust,
firm, association, unincorporated organization or other entity.




                                                     1
 “PRC” or “China” means the People’s Republic of China excluding, for the purposes of this
Agreement, Hong Kong Special Administrative Region, Macau Special Administrative Region and
Taiwan;
“Pro Rata Amount” means, with respect to any Shareholder, the ratio of the amount of registered
capital contributed by him/it to the total amount of registered capital of the Company;
“RMB” means the lawful currency of the PRC;
“Shares” means the shares of the Company;
“Shareholder” means the holder for the time being of the Shares;
“Subsidiary” means, with respect to any Person, a corporation or other entity of which 50% or more of
the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by
such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company or to Subsidiaries thereof.
2.       GENERAL PROVISIONS
2.1      All activities of the Company shall comply with, and be entitled to the benefits and protection
of, all provisions and stipulations stated in the officially promulgated and relevant PRC laws and
decrees.
2.2      The Company shall be organized as a limited liability company. Each Shareholder of the
Company is liable to the Company within the limit of its capital contribution. The profits, risks and
losses of the Company shall be shared by the Shareholders in proportion to their respective capital
contribution, except otherwise as agreed by all Shareholders that dividend will not be divided in
proportion to their respective capital contribution.
3.       BUSINESS OF THE COMPANY
The business of the Company shall be [Insert Details].
4.       REGISTERED CAPITAL AND CAPITAL CONTRIBUTION
4.1      The total amount of registered capital of the Company is RMB [Insert Number], of which:
Party A shall pay RMB[Insert Number], accounting for [Insert Number]% of the registered capital;
Party B shall pay RMB[Insert Number], accounting for [Insert Number]% of the registered capital;

4.2      Each Shareholder shall make in full as scheduled the amount of the capital contribution
subscribed for under the Articles of Association in a lump sum. All of the Shareholders shall make their
capital contribution in cash; they shall deposit the full amount of such capital contribution in cash in the
interim bank account opened by the Company to be established.
5.       SHAREHOLDERS’ MEETINGS
5.1      Shareholders’ meetings shall exercise the following powers:.
(a)              To decide on the Company’s operational policies and investment plans;
(b)              To elect and replace Directors and decide on matters relating to the remuneration of
Directors;
(c)              To elect and replace the supervisors who are representatives of the Shareholders, and
decide on matters relating to the remuneration of supervisors;
(d)              To examine and approve reports of the Board of Directors;
(e)              To examine and approve reports of the board of supervisors or any supervisor(s);
(f)              To examine and approve the Company’s proposed annual financial budget and final
plans;



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(g)             To examine and approve the Company's plans for profit distribution and recovery of
losses;
(h)             To decide on increases in or reductions of the Company’s registered capital;
(i)             To decide on the issue of bonds by the Company;
(j)             To decide on transfers of capital contribution by Shareholders to a Person other than a
Shareholder;
(k)             To decide on issue such as merger, division, change in corporate form or dissolution
and liquidation of the Company; and
(l)             To amend the Company's Articles of Association.
Where unanimous agreement is reached in writing among the Directors on the issues listed above, a
decision can be made directly by the Shareholders’ Meeting without a meeting, which decision shall be
signed and stamped by all the Shareholders.

5.2      While this Agreement remains in force, any actions or decisions concerning the following
matters must be adopted by the Shareholders representing two-thirds (2/3) or more of the total voting
rights:
(a)              Amendment to the Articles of Association;
(b)              Merger, division, dissolution or change of structure of the Company (unless it shall
have become insolvent);
(c)              Changes in registered capital (or equivalent capital structure) of the Company.
5.3      Any actions or decisions concerning major issues or matters other than those under Clause 5.2
shall be adopted by the Shareholders representing one half (1/2) or more of the total voting rights.
6.       DIRECTORS
6.1 The Board shall consist of  [Insert Number of the Directors] Directors, among which Party A has
right to nominate  [Insert Number of the Directors] and Party B shall has right to nominate  [Insert
Number of the Directors]. It is the right of Shareholders at the Shareholders’ meeting to elect and
remove members of the Board.
6.2      Any of the Shareholders exercising such rights of nomination shall give written notice to the
Company and to all other Shareholders [Insert Number] days before the meeting.
6.3      Each of the Shareholders shall indemnify all the other Shareholders and the Company in respect
of any claim (other than any claim relating to such Person’s employment or for services provided to the
Company) by any Director nominated by him/it in respect of such Director’s removal or resignation for
whatsoever reason.
7.       BOARD OF DIRECTORS
7.1      The quorum for all meetings of the Board shall be at least two thirds (2/3) of all of the Directors.
A quorum must be present at the beginning of and throughout each meeting.
7.2      Matters set out in Clause 5.1 and 5.2 herein must be resolved by Shareholders representing two
thirds (2/3) or more of the total votes. All matters other than those set out in Clause 5.1 and 5.2 shall be
decided by the Board by way of simple majority vote, but subject to relevant laws and regulations which
may reserve to the Shareholders’ meeting’s power to consider and, if thought fit, pass certain
resolutions to the exclusion of the directors.




                                                     3
8.        PROMOTION OF THE COMPANY’S BUSINESS
8.1       Each of the Shareholders covenants with the others to use his/its best endeavours to promote
and develop the business of the Company.
8.2       Each of the Shareholders covenants with the others that he shall not:
(a)               be engaged, concerned or interested either directly or indirectly and whether on his/its
own, or on behalf of, or in association with, any third party or in any capacity whatsoever in carrying on
any business which is the same as or similar to the business of the Company; or
(b)               on his/its own, or on behalf of, or in association with, any third party or in any capacity
whatsoever, entice or seek to entice away from the Company any Director or other officer or any
employee of the Company whether or not any such Person would thereby commit a breach of his/its
contract of service or employment or solicit, or seek to solicit, the business of any Person, firm or
company which has at any time been a customer or client of, or supplier of goods or services to, the
Company.
8.3 The restrictions contained in Clause 8.2 shall have full effect and be enforceable for as long as each
such party is owner of any Shares and for the period of two (2) years after he/it ceases to own any
Shares, whatever the reason for such cessation of ownership.
8.4 Each of the Shareholders shall procure that the restrictions contained in Clause 8.2 shall be
observed by all Persons under his/its control.
8.5 The restrictions contained in Clause 8.2, 8.3 and 8.4 are considered reasonable by the parties
hereto, but, in the event that any such restriction shall be found to be void under any relevant law but
would be valid if some part or parts thereof were deleted or the period or area of application were
reduced, such restriction shall apply with such modification as may be necessary to make it valid and
effective.
8.6 Any interest of any of the Shareholders in any securities which are listed on Shanghai Stock
Exchange, Shenzhen Stock Exchange and other stock exchange markets amounting to five per cent or
less of the issued securities of any class and which, in all circumstances, constitute less than five per
cent of the voting rights (if any) attaching to the securities of that class, shall be disregarded for the
purpose of Clause 8.2.
9.        CONFIDENTIALITY
9.1       Each of the parties hereto shall at all times, both before and after termination of this Agreement,
keep confidential any information which he/it may acquire or may already have acquired prior to the
date of this Agreement in relation to the Company or its business, customers, clients or other affairs (the
“Confidential Information”) and shall not use such information or disclose the same to any third party
except with the prior written consent of every other party hereto and of the Company or in accordance
with the order of a court of competent jurisdiction or for the advancement of the Company’s business.
Where any Party hereto has to make a disclosure following an order of a competent court, or for the
benefit of the Company business, it must immediately notify in writing each Party hereto and the
Company.
9.2       The parties hereto shall procure that the Company shall use all reasonable endeavours to ensure
that its directors, officers, employees and agents shall observe a similar duty of confidentiality.
9.3       The obligations of the parties hereto continued in Clause 9.1 shall continue for perpetual
duration but shall cease to apply to any information coming into the public domain otherwise than by
breach of any such party of his obligations therein contained.



                                                     4
10.      CONTRIBUTION TRANSFERS
10.1     Save as provided in the remaining sub-clauses of this Clause, none of the parties hereto shall be
entitled during the term of this Agreement to sell, transfer, charge, pledge, encumber, grant options over
or otherwise dispose of any contribution in registered capital now owned or hereafter acquired by such
party.
10.2     In the event that any of the parties hereto proposes to sell, transfer or otherwise dispose of all or
any contributions in registered capital held by him therein (the “Offer Contribution”) to any Person
(including any other party hereto), such party (the “Selling Party”) shall give written notice (the
“Transfer Notice”) to the Company and all other parties hereto (the “Non-Selling Parties”) stating the
following:
(a)               The name of the proposed transferee, the price offered by such transferee for the Offer
Contribution, the proposed date of completion of the transfer and all other terms and conditions of such
proposed transfer;
(b)               That the Selling Party irrevocably offers to sell the Offer Contribution to the
Non-Selling Parties (the “First Offer”) pro rata to their then respective contribution in the Company on
the same terms and conditions (including price) as have been offered by such transferee; and
(c)               That each Non-Selling Party must, if he wishes to accept the First Offer, give notice to
the Selling Party not later than 14 days after the date when a valid Transfer Notice was given (or deemed
given) to them (the “First Offer Date”) and, if any Non-Selling Party is prepared to purchase Offer
Contribution in excess of his pro rata allocation as determined pursuant to item (b) above, such notice
shall specify the maximum number of Offer Contribution which such Non-Selling Party is prepared to
purchase.
10.3     In the event that none of the Non-Selling Parties accepts the First Offer in the manner provided
by item (c) of sub-clause 10.2, the Selling Party shall be free to sell the Offer Contribution to the
proposed transferee on terms and conditions no more favourable than those originally contained in the
Transfer Notice provided that if the Selling Party transfers its ownership interest to any party other than
the Non-Selling Parties, it shall obtain the consent of 1/2 of the Non-Selling Parties. Other Non-Selling
Parties shall be deemed to have agreed to the transfer if failing to give a reply within 30 days upon the
receipt of the written notice, and the execution of the sale and purchase contract of Offer Contribution
shall be completed not later than 60 days after the First Offer Date, but always subject to compliance
with the provisions of sub-clause 10.7.
10.4     In the event that all the Non-Selling Parties accept the First Offer in the manner provided by
item (c) of sub-clause 10.2, the execution of the sale and purchase contract of the Offer Contribution
shall take place no later than 60 days after the First Offer Date at such place and time as the Selling Party
and the Non-Selling Parties shall agree whereupon:
(a)               The Selling Party shall deliver to each Non-Selling Party a duly executed instrument of
transfer in respect of the relevant number of Offer Contribution accepted by such Non-Selling Party and
deliver to the Company the relevant contribution certificate for cancellation; the Company shall destroy
the Capital Contribution Certificate of the original Shareholder, and issue the Capital Contribution
Certificate to the new Shareholder, and make corresponding amendment to the Articles of Association.
Such amendment to the Articles of Association shall not require the approval of the Shareholders’
Meeting.




                                                      5
(b)               Each of the Non-Selling Parties shall deliver to the Selling Party a banker’s draft in
payment of the price of the relevant number of Offer Contribution.
10.5     In the event that at least one Non-Selling Party accepts the First Offer (an “Accepting Party”)
and any of the other Non-Selling Parties rejects or fails to accept such offer in the manner provided by
item (c) of sub-clause 10.2 (a “Non-Accepting Party”), the remaining Offer Contribution shall be
allocated between those Accepting Parties who have indicated that they are prepared to purchase more
Offer Contribution than their pro rata allocations, and, if more than one, pro rata to the number of excess
Offer Contribution which each such Accepting Party has indicated he is prepared to purchase. The
execution of the sale and purchase contract of such excess Offer Contribution shall take place in
accordance with the provisions of sub-clauses 10.4.
10.6     To the extent that the Offer Contributions are not fully accepted by the Accepting Parties
pursuant to the preceding sub-clauses, the Selling Party shall be free to sell the non-accepted Offer
Contribution to the proposed transferee on terms and conditions no more favourable than those
originally contained in the Transfer Notice provided that such sale shall be approved by 1/2 of the
Non-Selling Parties. Other Non-Selling Parties shall be deemed to have agreed to the transfer if failing
to give a reply within 30 days upon the receipt of the written notice, the execution of the sale and
purchase contract of such Offer Contribution takes place not later than 60 days after the First Offer
Date, but always subject to compliance with the provisions of sub-clause 10.7.

10.7    If the Non-Selling Parties do not elect to purchase all of the Offer Contributions in accordance
with sub-clauses 10.2 to 10.6, the Selling Party shall refrain from selling any Offer Contribution to any
New Party unless, prior to the consummation of such sale, each Non-Selling Party who is not an
Accepting Party has been afforded the opportunity to join in such sale, as provided in items (a) to (d)
below:
(a)              Not later than 30 days after the First Offer Date, any of such Non-Selling Parties who is
not an Accepting Party may elect, by giving written notice to the Selling Party, to offer for sale to the
New Party such percentage of his contribution to registered capital as is equivalent to the percentage of
the Selling Party’s contribution to registered capital proposed to be sold to the New Party (after
deducting therefrom all Offer Contribution agreed to be taken up by Accepting Parties), at a price and
otherwise on the same terms and conditions as those on which the New Party has offered to purchase
Contribution from the Selling Party.
(b)              In the event that the New Party agrees to purchase all of the Offer Contribution of the
Selling Party and all of the Non-Selling Parties’ Contribution offered for sale pursuant to item (a)
above, the execution of the sale and purchase contract of such Contribution should take place not later
than 60 days after the First Offer Date.
(c)              In the event that the New Party agrees to purchase less than the total sum of (i) all of the
Offer Contribution of the Selling Party (after deducting therefrom any such Contribution agreed to be
taken up by Accepting Parties) and (ii) all of the Contributions offered for sale by Non-Selling Parties
(not being Accepting Parties) pursuant to item (a) above, the Selling Party and such Non-Selling Parties
shall be entitled to sell to the New Party the aggregate number of registered capital agreed to be
purchased by the New Party in such ratios as reflect (1) in the case of the Selling Party, the number of
Offer Contribution (after deduction as aforesaid) and (2) in the case of each such Non-Selling Party, the
number of Contribution offered for sale pursuant to item (a) above.



                                                     6
(d)                The execution of the sale and purchase contract of such Contribution shall take place
not later than 60 days after the First Offer Date.
(e)                In the event that the New Party does not comply with items (a), (b) or (c) above, the
Selling Party shall not be entitled to proceed with the sale of any of the Offer Contribution to the New
Party.
10.8      In the event that an offer is made by a third party to purchase all outstanding registered capital,
the party receiving such offer (“Recipient Party”) shall notify the Company and all other parties hereto
as soon as possible. No later than 14 days prior to expiration of such offer, each of the parties hereto
shall notify the Recipient Party, and Recipient Party shall notify all of the other parties hereto, whether
or not he intends to accept such offer. If parties beneficially owning not less than 90% of the total
registered capital accept such offer, the remaining party or parties shall also be required to accept such
offer and sell their share in the registered capital to such third party.
10.9      After the execution of the sale and purchase contract of Offer Contributions, the parties hereto
shall procure that the shareholders’ meeting approves such transfers of the registered capital as soon as
possible, and the Company submits the sale and purchase contract of the registered capital for
governmental approval, if so required, and modifies the entry of all required particulars in the
Company’s shareholders register.
10.10 Under no circumstances shall the transfer of any registered capital by any of the parties hereto
to any Person, firm or corporation who or which is not a party to this Agreement (“New Party”) be
entered in the Company’s share register unless the New Party has first entered into a contract with all
parties hereto (other than any ceasing to be a Shareholder) whereby the New Party shall agree, inter alia,
to be bound by all the restrictions of, and discharge all duties and obligations set out in, this Agreement
as if the New Party were an original party hereto. Such contract shall be in such form as the parties
hereto (other than any ceasing to be a Shareholder) shall require.
10.11 Except for sub-clause 10.10, which shall apply, the provisions of this Clause 10 shall not apply
if no less than 90% of the total voting rights consent to any transfer of registered capital (which consent
may be conditional if such beneficial owners deem appropriate).
11.       FINANCING
11.1      In the event that the Shareholders’ meeting resolves to increase the registered capital, with the
consent of no less than two thirds (2/3) of the total voting rights pursuant to item (c) of Clause 5.2, each
of the parties hereto shall have the right to subscribe for his/its Pro Rata Amount of such new increased
registered capital and shall, in addition, have the right of over subscription for new increased registered
capital (“Over Subscription Right”) if any of the other parties elects not to subscribe fully for his/its
Pro Rata Amount.
11.2      Each of the parties hereto shall be afforded the opportunity to subscribe for his/its Pro Rata
Amount of such new increased registered capital on the same terms and at the same price as are offered
to other parties.
11.3      Any new increased registered capital which is not taken up by any party who fails to exercise
his/its right of subscription for his/its Pro Rata Amount of such new increased registered capital or who,
having exercised such right, fails to complete such subscription shall first be offered to those parties
who exercise their Over Subscription Right within the Issuance Notice Period (as defined in Clause
11.4) pro rata to the number of additional new increased registered capital which such parties have




                                                     7
agreed to take up above their Pro Rata Amount. Thereafter, the Company shall have the right to sell all
remaining new increased registered capital pursuant to Clause 11.5.
11.4     Prior to increasing any new registered capital, a resolution shall be passed by the Shareholders’
meeting for giving to each of the parties written notice (the “Issuing Notice”) setting out the price and
terms upon which the Company proposes to sell the same, the amount of new increased registered
capital for which each party is entitled to subscribe and a statement that each party shall have 14 days
from the date of receipt, or deemed receipt, of the Issuance Notice to accept his Pro Rata Amount of the
new Shares and to exercise his/its Over Subscription Right by:
(a)      giving written notice to the Company;
(b)      forwarding payment for his/its Pro Rata Amount of the new increased registered capital to the
Company; and
(c)      if the Over Subscription Right is exercised, forwarding payment for the additional new
increased registered capital for which he agrees to subscribe.
11.5     In the event that any of the parties hereto fails to exercise his right of subscription within the
Issuance Notice Period, and subject to the other parties’ Over Subscription Rights, the Company shall
have 60 days thereafter to enter into an agreement with a third party to sell the new increased registered
capital in respect of which the rights of the parties hereto were not exercised, at a price and upon terms
no more favourable to such third party than those specified in the Issuance Notice. In the event that no
such agreement is entered into within such 60 day period, the Company (as the parties hereto shall
procure) shall not thereafter issue any new Shares without first offering the same to the parties hereto in
the manner provided in this Clause 11.
11.6     It is agreed that the provisions of sub-clauses 11.1 to 11.5 shall not apply to any new issue of
new Shares or any increase in the registered capital.
(a)               Pursuant to (i) an initial public offering made by the Company (or any new holding
company); or (ii) the exercise of any options granted to directors, officers or employees of the Company
in accordance with any share option scheme approved by the Shareholders’ meeting; or
(b)               If the beneficial owners of not less than 90% of the total voting rights agree that
sub-clauses shall not apply.
12.      INITIAL PUBLIC OFFERING
12.1     All the parties hereto agree that the Company (or any new holding company) shall seek a listing
of its shares either on Shanghai Stock Exchange and Shenzhen Stock Exchange or on such other stock
exchange as not less than [two thirds] of the total voting rights may decide, as soon as the Company
together with any subsidiaries at such time meets the financial, business and other requirements of the
relevant listing rules (or equivalent regulations).
12.2     For the purpose of seeking such listing, all the parties hereto agree that the Board shall have full
authority, acting for and on behalf of the Company, to take such steps as are necessary including,
without limitation, transformation of the Company into a share limited company, appointment of a
sponsor, underwriters, receiving bankers, share registrar, reporting accountants, valuers and solicitors.
Each of the parties hereto covenants with the others to use his best endeavours to assist the Board with
such application for listing including, without limitation, surrendering any interest in any Subsidiary of
the Company for an interest of equal value in the Company (or any new holding company) on such
terms and conditions as the Board may reasonably require.




                                                     8
13.      TERMINATION
13.1     This Agreement shall continue in full force and effect until terminated in accordance with this
Clause 13.
13.2     This Agreement shall terminate automatically:
(a)               In relation to any party who ceases to be the owner of any Shares; or if any stock
exchange anywhere in the world grants a listing of shares in the capital of the Company (or any new
holding company); or
(b)               If an effective resolution is passed to wind up the Company or if a liquidator is
otherwise appointed (except for the purpose of a bona fide reconstruction or amalgamation of the
Company with the consent of all the parties hereto, such consent not to be unreasonably withheld) or if
a receiver or manager is appointed over any part of the assets or undertaking of the Company; or
(c)               At any time by written agreement of all the parties hereto; or
(d)               On such date as one Shareholder becomes beneficially interested in all the issued
Shares.
13.3     Termination of this Agreement either in its entirety or in relation to certain of the parties hereto
only shall be without prejudice to Clause 9 and any rights which any party may have against any other
party hereto which arose prior to such termination.
14.      MISCELLANEOUS
14.1     This Agreement shall be binding upon the parties hereto and their successors and permitted to
assign to another party provided that none of the parties hereto shall be entitled to assign his rights or
benefits under this Agreement or purport to transfer any of his duties or obligations hereunder except
with the prior consent of all the other parties.
14.2     In the event of any inconsistency between the provisions of this Agreement and Articles of
Association, the former shall prevail and the parties hereto shall cooperate with a view to taking all
necessary action to make any appropriate amendments to the Articles of Association to reflect the
provisions of this Agreement. Nothing in this Agreement shall be deemed to constitute an amendment
to the Articles of Association.
14.3     Each party hereto shall exercise or refrain from exercising any voting rights or other powers of
control so as to ensure the passing of any and every resolution necessary or desirable to procure that the
affairs of the Company are conducted in accordance with the provisions of this Agreement and
otherwise to give full effect to the provisions of this Agreement and likewise to ensure that no resolution
is passed which does not accord with such provisions.
14.4     No exercise or failure to exercise or delay in exercising any rights, power or remedy vested in
any party hereto under or pursuant to this Agreement shall constitute a waiver by that party of that or
any other right, power or remedy.
14.5     Nothing in this Agreement shall be deemed to constitute a partnership between the parties
hereto nor constitute any party the agent of any other party or otherwise entitle any party to have
authority to bind any other party hereto for any purpose whatsoever.
14.6     This Agreement constitutes the entire Agreement between the parties hereto in relation to the
subject matter hereof and supersedes all prior agreements and understandings whether oral or written
with respect thereto and no variation of this Agreement shall be effective unless reduced to writing and
signed by each of the parties hereto.




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14.7     This Agreement may be executed in any number of counterparts or duplicates each of which
shall be an original but such counterparts or duplicates shall together constitute one and the same
Agreement.
14.8     Time shall be of the essence for the purposes of any provision of this Agreement.
14.9     The parties hereto agree that any right of action which the Company may have in respect of any
alleged breach of any obligation owed to the Company shall be prosecuted by the Directors appointed
by the party or parties which is or are not, or whose associate is not, alleged to be responsible for the
breach. Those Directors shall have full authority on behalf of the Company to negotiate, litigate and
settle any claims arising out of the alleged breach or exercise any right arising out of the alleged breach
and the parties shall take all steps within their power to give effect to the provisions of this sub-clause.
14.10 The rights and remedies contained in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
14.11 In this Agreement, references to Clauses are to clauses of this Agreement and references to a
sub-clause are, unless otherwise stated, references to a sub-clause of the Clause in which the reference
appears.
14.12 Clause headings are inserted for convenience only and shall be ignored in construing the terms
of this Agreement.
15.      ANNOUNCEMENTS
Each of the parties hereto undertakes to other parties that he/it will not make any announcement in
connection with this Agreement unless all other parties hereto shall have given their respective consents
to such announcement.
16.      NOTICES
16.1     Any notice to be given by any party hereto shall be in writing and shall be deemed duly given if
delivered personally or sent by facsimile transmission or e-mail or by prepaid registered post to the
addressee at the address or (as the case may be) the facsimile number or e-mail address of that party set
opposite his name below,
          Name of Party         Address                      Facsimile No.            E-mail
          [Insert              [Insert Address]            [Insert Number]
          Shareholder’s Name]
                       [Insert [Insert Address]             [Insert Number]
          Shareholder’s Name]

or at such other address (or facsimile number) or e-mail address as the party to be served may have
notified (in accordance with this clause) for the purposes of this Agreement.
16.2     Any notice sent by facsimile or e-mail shall be deemed given when dispatched subject, in the
case of facsimile, to successful transmission report and any notice served by prepaid registered post
shall be deemed given 48 hours after posting.
17.      APPLICABLE LAW AND SETTLEMENT OF DISPUTES
17.1     The formation of this Agreement, its validity, interpretation, execution and settlement of the
disputes shall be governed by the relevant laws of the People’s Republic of China, decrees, rules and
regulations.
17.2     Any disputes, claims arising from or relating to the validity, interpretation, execution, and
termination of the Agreement shall be settled through friendly consultations. Any party, upon receipt of



                                                    10
a written request from the others, should consult with the others with no delay. In case no settlement can
be reached through consultations within thirty (30) days, the dispute shall be submitted to China
International Economic and Trade Arbitration Commission, Beijing Branch for arbitration in
accordance with the then in-effect arbitration rules of the commission.
17.3     The arbitral award shall be final and binding upon all parties and shall be enforceable by any
court having the jurisdiction over the party or parties against which the award has been rendered, or
wherever assets of the party or parties against which the award has been rendered are located. The
losing party or parties shall bear the costs of arbitration and the other side’s attorney fees unless
otherwise stipulated in the award.
17.4     Each party shall cooperate with the other party in making full disclosure of and providing
complete access to all information and documents requested by the other party in connection with such
proceedings subject only to any confidentiality obligations binding on such party.
17.5     In resolving of the dispute, except for the disputed part, other parts of this Agreement shall be
performed accordingly.
17.6     An arbitration clause does not prevent any party from requesting interim conservatory
measures from the courts.




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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the date first above written.
SIGNED by: 

Party A:



Name: [Insert Individual Shareholder’s Name]

Signature:




SIGNED by:

Party B:



Name: [Insert Institutional Shareholder’s Name]

Company Chop:

Signature:

Title: Legal Representative




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