China SHESAYS Medical Cosmetology Inc.: Exhibit 10.4 - Filed by
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Exhibit 10.4



Shareholders’ Voting Rights Proxy Agreement 


 


SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT 


AMONG 


Yixiang Zhang, Ning Liu, Xingwang Pu, Wenhui Shao, Bing Fang 


Chengdu BOAN Investment Management Co., Ltd 


And 


Sichuan SHESAYS Cosmetology Hospital Co., Ltd 


April 27, 2010 


 


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Shareholders’ Voting Rights Proxy Agreement 


SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT 


This SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT (this “AGREEMENT”) is entered into as of April 27, 2010 by and among the following Parties: 


(1) Yixiang Zhang, P.R.C;  


(2) Ning Liu, P.R.C;  


(3) Xingwang Pu, P.R.C;  


(4) Wenhui Shao, P.R.C;  


(5) Bing Fang, P.R.C;  


(6) Chengdu BOAN Investment Management Co., Ltd(“BOAN”), a company of limited liabilities incorporated under the laws of P. R. China, with its legal address at New No.83, Xinnan Road, Chengdu, Sichuan Province, P.R.C; 


(7) Sichuan SHESAYS Cosmetology Hospital Co., Ltd (“SHESAYS”), a company of limited liabilities incorporated under the laws of P. R. China, with its legal address at New No.83, Xinnan Road, Wuhou District, Chengdu, Sichuan Province, P.R.C;
and 


(8) Subsidiaries, if any,  from time to time of SHESAYS("SHESAYS SUBSIDIARIES”) 


(The above parties shall hereinafter be individually referred to as a “PARTY” and collectively, “PARTIES”. Yixiang Zhang, Ning Liu , Xingwang Pu, Wenhui Shao and Bing Fang shall hereinafter be individually referred to as a
“PERSONAL SHAREHOLDER” and collectively, “PERSONAL SHAREHOLDERS”, Personal
Shareholders and SHESAYS shall hereinafter be individually referred to as a “SHAREHOLDER” and collectively, “SHAREHOLDERS”.) 


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Shareholders’ Voting Rights Proxy Agreement  


WHEREAS:  


(1) As of the date of this Agreement, Yixiang Zhang, Ning Liu , Xingwang Pu, Wenhui Shao and Bing Fang are the registered shareholders of SHESAYS, legally holding all equity interests of SHESAYS, of which Yixiang Zhang holding 45% interest, Ning Liu
holding 15%, Xingwang Pu holding 15%, Wenhui Shao holding 15% and Bing Fang holding 10%.  


(2) As SHESAYS is preparing to establish the cosmetology hospitals in various locations in China, SHESAYS shall hold all or part of equity interests of   SHESAYS SUBSIDIARIES. 


(3) The Shareholders intend to severally entrust the individual designated by BOAN with the exercises of their voting rights in Target Company (as defined below) while BOAN is willing to designate such an individual. 


The Parties hereby have reached the following agreement upon friendly consultations: 


ARTICLE 1  VOTING RIGHTS ENTRUSTMENT 


1.1 Under this Agreement, “TARGET COMPANY” shall mean, to Yixiang Zhang, Ning Liu , Xingwang Pu, Wenhui Shao and Bing Fang, SHESAYS; and to SHESAYS, SHESAYS SUBSIDIARIES. 


1.2 The Shareholders hereby irrevocably undertake to respectively sign the Entrustment Letter after execution of the Agreement to respectively entrust the personnel (“TRUSTEES”) then designated by BOAN to exercise the following rights
enjoyed by them as shareholders of Target Company in accordance with the then effective articles of association of Target Company (collectively, the “ENTRUSTED RIGHTS”): 


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Shareholders’ Voting Rights Proxy Agreement 


(1) Proposing to convene and attending shareholders’ meetings of Target Company as proxy of the Shareholders according to the articles of association of Target Company; 


(2) Exercising voting rights as proxy of the Shareholders, on issues discussed and resolved by the shareholders’ meeting of Target Company, including but not limited to the appointment and election for the directors, general manager and other
senior management personnel of Target Company. 


The above authorization and entrustment is granted subject to the status of trustees as PRC citizens and the approval by BOAN. Upon and only upon written notice of dismissing and replacing Trustee(s) given by BOAN to the Shareholders, the
Shareholders shall promptly entrust another PRC citizen then designated by BOAN to exercise the above Entrusted Rights, and once new entrustment is made, the original entrustment shall be replaced; the Shareholders shall not cancel the authorization
and entrustment of the Trustee(s) otherwise. 


1.3 The Trustees shall perform the entrusted obligation within the scope of entrustment in due care and prudence and in compliance with laws; the Shareholders acknowledge and assume relevant liabilities for any legal consequences of the
Trustees’ exercise of the foregoing Entrusted Rights. 


1.4 The Shareholders hereby acknowledge that the Trustees are not required to seek advice from the Shareholders prior to their respective exercise of the foregoing Entrusted Rights. However, the Trustees shall inform the Shareholders in a timely
manner of any resolution or proposal on convening interim shareholders’ meeting after such resolution or proposal is made. 


ARTICLE 2  RIGHT TO INFORMATION 


2.1 For the purpose of exercising the Entrusted Rights under this Agreement, the Trustees are entitled to know the information with regard to Target Company’s operation, business, clients, finance, staff, etc., and shall have access to relevant
materials of Target Company. Target Company shall adequately cooperate with the
Trustees in this regard.


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Shareholders’ Voting Rights Proxy Agreement 


ARTICLE 3 EXERCISE OF ENTRUSTED RIGHTS 


3.1 The Shareholders will provide adequate assistance to the exercise of the Entrusted Rights by the Trustees, including execution of the resolutions of the shareholders’ meeting of Target Company or other pertinent legal documents made by the
Trustee when necessary (e.g., when it is necessary for examination and approval of or registration or filing with governmental departments). 


3.2 If at any time during the term of this Agreement, the entrustment or exercise of the Entrusted Rights under this Agreement is unenforceable for any reason except for default of any Shareholder or Target Company, the Parties shall immediately
seek a most similar substitute for the unenforceable provision and, if necessary, enter into supplementary agreement to amend or adjust the provisions herein, in order to ensure the realization of the purpose of this Agreement. 


ARTICLE 4 EXEMPTION AND COMPENSATION 


4.1 The Parties acknowledge that BOAN shall not be requested to be liable for or compensate (monetary or otherwise) other Parties or any third party due to exercise of Entrusted Rights by the Trustees designated by BOAN under this Agreement. 


4.2 Target Company and the Shareholders agree to compensate BOAN for and hold it harmless against all losses incurred or likely to be incurred by it due to exercise of the Entrusted Rights by the Trustees designated by BOAN, including without
limitation any loss resulting from any litigation, demand arbitration or claim initiated or raised by any third party against it or from administrative investigation or penalty of governmental authorities. 


However, the Shareholders and Target Company will not compensate for losses incurred due to willful misconduct or gross negligence of BOAN. 


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Shareholders’ Voting Rights Proxy Agreement 


ARTICLE 5  REPRESENTATIONS AND WARRANTIES 


5.1 Each of the Personal Shareholders hereby severally and jointly represents and warrants that: 


5.1.1 Each of the Personal Shareholders is a PRC citizen with full capacity and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions. 


5.1.2 Each of the Personal Shareholders has full right and authorization to execute and deliver this Agreement and other documents that are related to the transaction referred to herein and to be executed by them. They have full right and
authorization with respect to consummate the transaction referred to herein. 


5.1.3 This Agreement shall be executed and delivered by the Personal Shareholders lawfully and properly. This Agreement, upon execution, constitutes the legal and binding obligations on them and is enforceable on them in accordance with its terms
and conditions hereof. 


5.1.4 The Personal Shareholders are registered and legal shareholders of Target Company as of the effective date of this Agreement, and except the rights created by this Agreement, the Call Option Agreement entered into by BOAN, Target Companies and
Personal Shareholders on April 27, 2010 (the “CALL OPTION AGREEMENT”), as well as the Equity Pledge Agreement entered into by BOAN, Target Company and Personal Shareholders on April 27, 2010, (the “EQUITY PLEDGE AGREEMENT”),
there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of Target Company. 


5.1.5 Considering the fact that according to Equity Pledge Agreement, considering the fact that Personal Shareholders will set aside all the equity interest held thereby in relevant Target Company as security to secure the performance by them of
their obligations under the Call Option Agreement, Personal Shareholders undertake to
make full and due performance of the obligations under the Call Option Agreement
during the valid term of this Agreement, and they will not be in conflict with
any stipulation under the Call Option Agreement, which are likely to have impact
on the exercise of the Entrusted Rights by the Trustees under this Agreement. 


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Shareholders’ Voting Rights Proxy Agreement 


5.1.6 Considering the facts that the Target Company entered into the Exclusive Agreement (the “SERVICE AGREEMENT”) on April 27, 2010 with BOAN, the Call Option Agreement, and that the Shareholders of Target Company will set aside all
equity interests held thereby in the Target Company as security to secure the performance of the contractual obligations under the above two agreements by the Target Company, the Personal Shareholders undertake to, during the valid term of this
Agreement, procure the full and due performance of the Target Company of any and all its obligations under the Service Agreement and the Call Option Agreement, and warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by
the Trustees will be incurred due to the breach of the Service Agreement, Call Option Agreement by the Target Company. 


5.2 BOAN (excluding the person designated by it) hereby represents and warrants that: 


5.2.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent corporate legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform
this Agreement and may act independently as a subject of actions; and 


5.2.2 it has the full corporate power and authority to execute and deliver this Agreement and all other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such
transaction. 


5.3 Target Company other than SHESAYS hereby in respect of themselves respectively represents and warrants that: 


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Shareholders’ Voting Rights Proxy Agreement 



5.3.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent legal person status, and with full and
independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and 


5.3.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate
such transaction. 


5.3.3 the Shareholders are registered shareholders as of the effective date of this Agreement or any Acknowledge Letter in the form as provided in Appendix III to this Agreement , legally holding the equity interest in it as registered from time to
time. Except rights created by this Agreement, the Equity Pledge Agreement and the Call Option Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the
Entrusted Rights in accordance with the then effective articles of association of Target Company. 


5.3.4 Considering the fact that the Shareholders of Target Company will set aside all the equity interests held thereby in the Target Company as security to secure the performance of the contractual obligations by the Target Company under the
Service Agreement and the Call Option Agreement, the Target Company undertakes to, during the valid term of this Agreement, make full and due performance of any and all obligations under the Service Agreement and the Call Option Agreement, and
warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Service Agreement and the Call Option Agreement by Target Company. 


5.4 SHESAYS hereby in respect of itself represents and warrants that: 


5.4.1 it is a company with limited liability properly registered and legally existing under the PRC laws, with an independent legal person status, and with full and
independent legal status and legal capacity to execute, deliver and perform this
Agreement and may act independently as a subject of actions; and 


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Shareholders’ Voting Rights Proxy Agreement 


5.4.2 it has the full corporate power and authority to execute and deliver this Agreement and all other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such
transaction. 


5.4.3 As of the effective date of this Agreement, Yixiang Zhang, Ning Liu , Xingwang Pu, Wenhui Shao and Bing Fang are the registered shareholders, legally holding the equity interests in SHESAYS. Except rights created by this Agreement, the Equity
Pledge Agreement and the Call Option Agreement, in respect of SHESAYS, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights according to the then
effective articles of association of SHESAYS. 


5.4.4 As of the effective date of this Agreement and in respect of the Target Company in which it holds equity interest, it is registered shareholder. Except rights created by this Agreement, the Call Option Agreement and the Equity Pledge
Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights according to the then effective articles of association of the Target Company.



5.4.5 Considering the fact that according to the Equity Pledge Agreement, it shall set aside all equity interest held thereby in relevant Target Company as security to secure the performance of its obligations under the Call Option Agreement,
SHESAYS undertakes to make full and due performance of the Call Option Agreement during the valid term of this Agreement and that it will not be in conflict with any term under the Call Option Agreement, which may have impact on the exercise of the
Entrusted Rights by the Trustees under this Agreement. 


5.4.6 Considering the fact that according to the Equity Pledge Agreement, that Shareholders of the Target Company will set aside all equity interests held thereby in the Target Company as security to secure the performance of the contractual obligations by the Target Company under the Service Agreement and the Call Option Agreement, SHESAYS undertakes to, during the valid term of this Agreement, procure the
full and due performance of any and all obligations under the Service Agreement and the Call Option Agreement by the Target Company in which it holds equity interest, and warrants that no adverse impact on the exercise of the Entrusted Rights
hereunder by the Trustees will be incurred due to breaching the Service Agreement or the Call Option Agreement by the Target Company. 


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Shareholders’ Voting Rights Proxy Agreement 


ARTICLE 6  TERM OF AGREEMENT 


6.1 This Agreement takes effect from the date of due execution of all the Parties hereto, with the valid term of twenty (20) years, unless terminated in advance by written agreement of all the Parties or according to Article 8.1 of this Agreement.
This Agreement shall automatically renew for another one (1) year when the term (whether original or extended, if applicable) of this Agreement is due, unless BOAN gives a thirty-day notice in writing to the other Parties of the cancellation of such
renewal. 


6.2 In case that a Shareholder transfers all of the equity interests held by it in the Target Company with prior consent of BOAN, such Shareholder shall no longer be a Party to this Agreement whilst the obligations and commitments of the other
Parties under this Agreement shall not be adversely affected thereby. 


ARTICLE 7  NOTICE 


7.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party. 


7.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when (i) it is transmitted if transmitted by facsimile or telex, or (ii) it is delivered if delivered in person, or (iii) when five (5) days have elapsed
after posting the same if posted by mail. 


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Shareholders’ Voting Rights Proxy Agreement 


ARTICLE 8 DEFAULT LIABILITY 


8.1 The Parties agree and confirm that, if any of the Parties (the “DEFAULTING PARTY”) breaches substantially any of the provisions herein or fails substantially to perform any of the obligations hereunder, such a breach or failure shall
constitute a default under this Agreement (a “DEFAULT”).  In such event any of the other Parties without default (a “NON-DEFAULTING PARTY”) who incurs losses arising from such a Default shall have the right to require the
Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days upon a
Non-defaulting Party notifying the Defaulting Party in writing and requiring it to rectify the Default, then the relevant Non-defaulting Party shall be entitled to choose at its discretion to (1) terminate this Agreement and require the Defaulting
Party to indemnify all damages, or (2) require specific performance by the Defaulting Party of this Agreement and indemnification against all damages. 


8.2 Without limiting the generality of Article 8.1 above, any breach by any Shareholder of the Call Option Agreement or Equity Pledge Agreement shall be deemed as having constituted the breach by such Shareholder of this Agreement; any breach by the
Target Company of the Service Agreement or the Call Option Agreement shall be deemed as having constituted the breach by Target Company of this Agreement. 


8.3 The Parties agree and confirm, the Shareholders or Target Company shall not request the termination of this Agreement for whatsoever reason and under whatsoever circumstance, except otherwise stipulated by laws or this Agreement. 


8.4 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement. 


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Shareholders’ Voting Rights Proxy Agreement 


ARTICLE 9 MISCELLANEOUS 



9.1 This Agreement shall be prepared in Chinese language in seven (7) original
copies, with each involved Party holding one (1) hereof. 


9.2 The conclusion, validity, execution, amendment, interpretation and termination of this Agreement shall be governed by the laws of the PRC. 


9.3 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Parties involved fail to reach an agreement regarding such a dispute within thirty (30) days of its
occurrence, such dispute shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the
Parties involved. 


9.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and a Party’s
exercise of any of its rights, powers and remedies shall not preclude its exercise of other rights, powers and remedies of it. 


9.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with the laws (the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or
partial exercise of the Party’s Rights shall not preclude such Party from exercising such rights in any other way or exercising the remaining part of the Party’s Rights. 


9.6 The titles of the articles contained herein are for reference only, and in no circumstances shall such titles be used for or affect the interpretation of the provisions 


9.7 Each provision contained herein shall be severable and independent from each of other provisions. If at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining
provisions herein shall not be affected thereby. 


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Shareholders’ Voting Rights Proxy Agreement 


9.8 Upon execution, this Agreement shall replace any other previous legal documents entered into by relevant Parties on the same subject matter.  


9.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement. Notwithstanding the preceding sentence, considering that the rights and obligations of
each Target Company and its Shareholders are independent and severable from each other, in case that the amendment or supplement to this Agreement is intended to have impact upon one of the Target Companies and its Shareholders, such amendment or
supplement requires only the approval of BOAN, the Target Company and its Shareholder while no consent is necessary from other Target Companies and their Shareholders (to the extent that the amendment or supplement does not have impact upon such
other Shareholders). 


9.10 In respect of the Shareholder and the Target Company, they shall not assign any of their rights and/or transfer any of their obligations hereunder to any third parties without prior written consent from BOAN; BOAN shall have the right to assign
any of its rights and/or transfer any of its obligations hereunder to any third parties designated by it after giving notice to the Shareholders. 


9.11 This Agreement shall be binding on the legal successors of the Parties. 


9.12 The rights and obligations of the Target Companies are severable and independent, performance of this Agreement by any Shareholder and any Target Company shall not affect the performance by other Shareholders and other Target Companies. 


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Shareholders’ Voting Rights Proxy Agreement 



9.13 Notwithstanding any provision to the contrary in this Agreement, new companies other than the Target Companies and their shareholder(s) can be included as one party to this Agreement by signing the Acknowledgement Letter in the form of Appendix
I to this Agreement. The new companies shall enjoy the same rights and assume the same obligations as other Target Companies; the shareholder(s) of the new companies shall enjoy the same rights and assume obligations as the other Shareholders hereunder. Since the rights and obligations of the Target Company and its Shareholder(s) under the Agreement are severable and independent, the participation
of the new target companies and their shareholders will not affect the rights and obligations of the original Target Company and its Shareholders, the participation of the new target companies only requires confirmation of BOAN by signing the
Acknowledgement Letter. Each of the Target Companies hereby irrevocably and unconditionally agrees to the participation of the new companies and their shareholders, and further confirms that the shareholder(s) of any new target company can entrust
the Trustees to exercise the voting rights according to the terms of this Agreement not necessarily with consent of the original Target Companies or their relevant Shareholder(s). 


[The remainder of this page is left blank] 


 


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Shareholders’ Voting Rights Proxy Agreement 



IN WITNESS HEREOF, the following Parties have caused this Shareholders’ Voting
Rights Proxy Agreement to be executed as of the date and in the place first here
above mentioned. 


Yixiang Zhang (Signature): 


Ning Liu (Signature): 


Xingwang Pu (Signature): 


Wenhui Shao (Signature): 


Bing Fang (Signature): 


 


Chengdu BOAN Investment Management Co., Ltd (Company Chop) 


Signed by: 


Name: 


Position: Authorized Representative 


 


Sichuan SHESAYS Cosmetology Hospital Co., Ltd (Company Chop) 


Signed by: 


Name: 


Position: Authorized Representative 


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Shareholders’ Voting Rights Proxy Agreement 


APPENDIX I                            


ACKNOWLEDGEMENT LETTER


      [•] (identity card number: ________[•]____________)/[•] limited liability company (registered address: _____[•]_______________) ("PARTICIPATING SHAREHOLDER") and [-] limited liability company
(registered address: _________[•]___________) ("PARTICIPATING TARGET COMPANY") hereby agree to participate each as an independent contract party in the Shareholders' Voting Rights Proxy Agreement dated April 27, 2010 among
Chengdu BOAN Investment Management Co., Ltd (“BOAN”) and other relevant parties ("PROXY AGREEMENT"). Participating Shareholder and Participating Target Company agree to entrust the Trustees designated by BOAN to exercise the voting rights
in the Participating Target Company in respect of [•]% of the equity interest in the registered capital of the Participating Target Company held by the Participating Shareholder as of the date of the Acknowledgement Letter, on behalf of the
Participating Shareholder. 


     Once this Acknowledgement Letter is executed by the Participating Shareholder and the Participating Target Company, Participating Shareholder and the Participating Target Company shall be deemed to have made the same undertakings and warranties
with those of the Shareholders and the Target Companies under the Proxy Agreement, agreed to respectively perform the obligations of the Shareholders and the Target Companies stipulated in the Proxy Agreement, and acknowledged the rights and
obligations of the Parties under the Proxy Agreement. 


[EXECUTION PAGE] 

[NAME OF PARTICIPATING SHAREHOLDERS]   


(Company chop) 


Signature by : _____[•]________
 


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Shareholders’ Voting Rights Proxy Agreement 



Name: [•] 

Position: Authorized Representative] 


[NAME OF PARTICIPATING TARGET COMPANY] 

(Company chop) 


Signature by : _____[•]________
 Name: [•] 

Position: Authorized Representative 


Chengdu BOAN Investment Management Co., Ltd (Company Chop) 

Signed by: 

Name:  

Position: Authorized Representative 


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