Exhibit 10.1
 
 
DIRECTOR AGREEMENT

This DIRECTOR AGREEMENT is made as of this 28th day of September, 2010 (the
“Agreement”), by and between Dongsheng Pharmaceutical International Co., Ltd., a
Delaware corporation (the “Company”) and Tsang-Bin Zeng (the “Director”).

WHEREAS, the Company appointed the Director as a member of the Board of
Directors of the Company on September 28th, 2010 and desires to enter into an
agreement with the Director with respect to such appointment; and

WHEREAS, the Director is willing to accept such appointment and to serve the
Company on the terms set forth herein, and in accordance with, the provisions of
this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

1. Position.  Subject to the terms and provisions of this Agreement, the Company
shall cause the Director to be appointed as a non-executive member of the board
of directors of the Company (the “Board”) and the Director hereby agrees to
serve the Company in that position upon the terms and conditions hereinafter set
forth, provided, however, that the Director’s continued service on the Board
after the initial one-year term on the Board shall be subject to any necessary
approval by the Company’s stockholders.

2. Duties.  During the Directorship Term (as defined in Section 5 hereof), the
Director shall serve as a member of the Board, and the Director shall make
reasonable business efforts to attend all Board meetings, serve on appropriate
subcommittees as reasonably requested by the Board, make himself available to
the Company at mutually convenient times and places, attend external meetings
and presentations, as appropriate and convenient, and perform such duties,
services and responsibilities and have the authority commensurate to such
position.

The Director will use his best efforts to promote the interests of the Company.
The Company recognizes that the Director (i) is or may become a full-time
executive employee of another entity and that his responsibilities to such
entity must have priority and (ii) sits on the board of directors of other
entities.  Notwithstanding the same, the Director will use reasonable business
efforts to coordinate his respective commitments so as to fulfill his
obligations to the Company and, in any event, will fulfill his legal obligations
as a director. Other than as set forth above, the Director will not, without the
prior notification to the Board, engage in any other business activity which
could materially interfere with the performance of his duties, services and
responsibilities hereunder or which is in violation of the reasonable policies
established from time to time by the Company, provided that the foregoing shall
in no way limit his activities on behalf of (i) his current employer and its
affiliates or (ii) the board of directors of those entities on which he
sits.  At such time as the Board receives such notification, the Board may
require the resignation of the Director if it determines that such business
activity does in fact materially interfere with the performance of the
Director’s duties, services and responsibilities hereunder.

3. Board Committees. The Director hereby agrees to serve on the Governance and
Nominating Committee of the Board and to perform all of the duties, services and
responsibilities necessary thereunder.
 
 
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4. Monetary Remuneration.

(a) Fees and Compensation.  During the Directorship Term the Director shall
receive the following compensation and benefits:

(i) A cash payment of $12,000.00 per year to be paid quarterly in equal
installments commencing from October 1, 2010.

(ii) $30,000 of stock options, such options to vest pursuant to the following
schedule: (A) $10,000 of stock options to vest on October 1, 2011; (B) $10,000
of stock options to vest on October 1, 2012, which is contingent upon the
renewal of this agreement from September 29, 2011 to September 29, 2012; and (C)
$10,000 of stock options to vest on October 1, 2013, which is contingent upon
the renewal of this agreement from September 29, 2012 to September 29, 2013;.

(iii) The Director’s status during the Directorship Term (as defined herein)
shall be that of an independent contractor and not, for any purpose, that of an
employee or agent with authority to bind the Company in any respect. All
payments and other consideration made or provided to the Director under Section
4 shall be made or provided without withholding or deduction of any kind, and
the Director shall assume sole responsibility for discharging, all tax or other
obligations associated therewith.

(b) Expense Reimbursements.  During the Directorship Term, the Company shall
reimburse the Director for all reasonable out-of-pocket expenses incurred by the
Director in attending any in-person meetings, provided that the Director
complies with the generally applicable policies, practices and procedures of the
Company for submission of expense reports, receipts or similar documentation of
such expenses. Any reimbursements for allocated expenses (as compared to
out-of-pocket expenses of the Director) must be approved in advance by the
Company.

5. Directorship Term.  The “Directorship Term,” as used in this Agreement, shall
mean the period commencing on September 28, 2010 and terminating on the 28th day
of September, 2011, or the earliest of the following to occur:

(a) the death of the Director;

(b) the termination of the Director from the position of member of the Board by
the mutual agreement of the Company and the Director;

(c) the removal of the Director from the Board by the shareholders of the
Company;

(d) the resignation by the Director from the Board if, after the date hereof,
the chief executive officer of his current employer determines that the
Director’s continued service on the Board conflicts with his fiduciary
obligations to his current employer (a “Fiduciary Resignation”); and

(e) the resignation by the Director from the Board if the board of directors or
the chief executive officer of his current employer requires the Director to
resign and such resignation is not a Fiduciary Resignation.

6. Director’s Representation and Acknowledgment.  The Director represents to the
Company that his execution and performance of this Agreement shall not be in
violation of any agreement or obligation (whether or not written) that he may
have with or to any person or entity, including without limitation, any prior
employer. The Director hereby acknowledges and agrees that this Agreement (and
any other agreement or obligation referred to herein) shall be an obligation
solely of the Company, and the Director shall have no recourse whatsoever
against any stockholder of the Company or any of their respective affiliates
with regard to this Agreement.
 
 
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7. Director Covenants.

(a) Unauthorized Disclosure.  The Director agrees and understands that in the
Director’s position with the Company, the Director has been and will be exposed
to and receive information relating to the confidential affairs of the Company,
including but not limited to technical information, business and marketing
plans, strategies, customer information, other information concerning the
Company’s products, promotions, development, financing, expansion plans,
business policies and practices, and other forms of information considered by
the Company to be confidential and in the nature of trade secrets. The Director
agrees that during the Directorship Term and thereafter, the Director will keep
such information confidential and will not disclose such information, either
directly or indirectly, to any third person or entity without the prior written
consent of the Company; provided, however, that (i) the Director shall have no
such obligation to the extent such information is or becomes publicly known or
generally known in the Company’s industry other than as a result of the
Director’s breach of his obligations hereunder and (ii) the Director may, after
giving prior notice to the Company to the extent practicable under the
circumstances, disclose such information to the extent required by applicable
laws or governmental regulations or judicial or regulatory process. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Directorship Term, the Director will
promptly return to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards,
surveys, maps, logs, machines, technical data or any other tangible product or
document which has been produced by, received by or otherwise submitted to the
Director in the course or otherwise as a result of the Director’s position with
the Company during or prior to the Directorship Term, provided that, the Company
shall retain such materials and make them available to the Director if requested
by his in connection with any litigation against the Director under
circumstances in which (i) the Director demonstrates to the reasonable
satisfaction of the Company that the materials are necessary to his defense in
the litigation and (ii) the confidentiality of the materials is preserved to the
reasonable satisfaction of the Company.

(b) Non-Solicitation.  During the Directorship Term and for a period of three
(3) years thereafter, the Director shall not interfere with the Company’s
relationship with, or endeavor to entice away from the Company, any person who,
on the date of the termination of the Directorship Term, was an employee or
customer of the Company or otherwise had a material business relationship with
the Company.

(c) Remedies.  The Director agrees that any breach of the terms of this Section
7 would result in irreparable injury and damage to the Company for which the
Company would have no adequate remedy at law; the Director therefore also agrees
that in the event of said breach or any threat of breach, the Company shall be
entitled to an immediate injunction and restraining order to prevent such breach
and/or threatened breach and/or continued breach by the Director and/or any and
all entities acting for and/or with the Director, without having to prove
damages, in addition to any other remedies to which the Company may be entitled
at law or in equity. The terms of this paragraph shall not prevent the Company
from pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the Director.
The Director acknowledges that the Company would not have entered into this
Agreement had the Director not agreed to the provisions of this Section 7.
 
 
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(i) The provisions of this Section 7 shall survive any termination of the
Directorship Term, and the existence of any claim or cause of action by the
Director against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
covenants and agreements of this Section 7.

8. Indemnification.  The Company agrees to indemnify the Director for his
activities as a director of the Company to the fullest extent permitted by law,
and to cover the Director under any directors and officers liability insurance
obtained by the Company.  The Company agrees to maintain a directors and
officers liability insurance policy with a minimum coverage of $5 million.

9. Non-Waiver of Rights.  The failure to enforce at any time the provisions of
this Agreement or to require at any time performance by the other party of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part
hereof, or the right of either party to enforce each and every provision in
accordance with its terms. No waiver by either party hereto of any breach by the
other party hereto of any provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions at that
time or at any prior or subsequent time.

10. Notices.  Every notice relating to this Agreement shall be in writing and
shall be given by personal delivery or by registered or certified mail, postage
prepaid, return receipt requested; to:

If to the Company:

Dongsheng Pharmaceutical International Co., Ltd.
China Bing’qi Plaza, Floor 17, No 69,
Zi Zhu Yuan Rd, Hai’dian District, Beijing
People’s Republic of China 100089
Telephone: +86-10-88580708

With a copy to:
 
 
Joseph M. Lucosky
Anslow & Jaclin, LLP
195 Route 9 South, Suite 204
Manalapan, NJ 07726
Telephone: (732) 409-1212

If to the Director:

Tsang-Bin Zeng
China Bing’qi Plaza, Floor 17, No 69,
Zi Zhu Yuan Rd, Hai’dian District, Beijing
People’s Republic of China 100089
Telephone: (302) 384-2887

Either of the parties hereto may change their address for purposes of notice
hereunder by giving notice in writing to such other party pursuant to this
Section 10.

11. Binding Effect/Assignment.  This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
personal representatives, estates, successors (including, without limitation, by
way of merger) and assigns. Notwithstanding the provisions of the immediately
preceding sentence, neither the Director nor the Company shall assign all or any
portion of this Agreement without the prior written consent of the other party.
 
 
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12. Entire Agreement.  This Agreement (together with the other agreements
referred to herein) sets forth the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, between them as to such subject matter.

13. Severability.  If any provision of this Agreement, or any application
thereof to any circumstances, is invalid, in whole or in part, such provision or
application shall to that extent be severable and shall not affect other
provisions or applications of this Agreement.

14. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to the
principles of conflict of laws. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any court in the
State of Delaware and the parties hereto hereby consent to the jurisdiction of
such courts in any such action or proceeding; provided, however, that neither
party shall commence any such action or proceeding unless prior thereto the
parties have in good faith attempted to resolve the claim, dispute or cause of
action which is the subject of such action or proceeding through mediation by an
independent third party.

15. Legal Fees.  The parties hereto agree that the non-prevailing party in any
dispute, claim, action or proceeding between the parties hereto arising out of
or relating to the terms and conditions of this Agreement or any provision
thereof (a “Dispute”), shall reimburse the prevailing party for reasonable
attorney’s fees and expenses incurred by the prevailing party in connection with
such Dispute; provided, however, that the Director shall only be required to
reimburse the Company for its fees and expenses incurred in connection with a
Dispute, if the Director’s position in such Dispute was found by the court,
arbitrator or other person or entity presiding over such Dispute to be frivolous
or advanced not in good faith.

16. Modifications.  Neither this Agreement nor any provision hereof may be
modified, altered, amended or waived except by an instrument in writing duly
signed by the party to be charged.

17. Tense and Headings.  Whenever any words used herein are in the singular
form, they shall be construed as though they were also used in the plural form
in all cases where they would so apply. The headings contained herein are solely
for the purposes of reference, are not part of this Agreement and shall not in
any way affect the meaning or interpretation of this Agreement.

18. Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

[-Signature Page Follows-]
 
 
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IN WITNESS WHEREOF, the Company has caused this Director Agreement to be
executed by authority of its Board of Directors, and the Director has hereunto
set his hand, on the day and year first above written.

Dongsheng Pharmaceutical International Co., Ltd.

 
By: 
_____________________________                                                     
Name:          Xiaodong Zhu
Title:           Chief Executive Officer

 
Independent Director

By: _____________________________
Name:           Tsang-Bin Zeng

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