CALADRIUS BIOSCIENCES, INC. - FORM 10-K - EX-10.WWW

Attached files

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10-K - CALADRIUS BIOSCIENCES, INC.	v179493_10k.htm
EX-31.2 - CALADRIUS BIOSCIENCES, INC.	v179493_ex31-2.htm
EX-32.2 - CALADRIUS BIOSCIENCES, INC.	v179493_ex32-2.htm
EX-32.1 - CALADRIUS BIOSCIENCES, INC.	v179493_ex32-1.htm
EX-31.1 - CALADRIUS BIOSCIENCES, INC.	v179493_ex31-1.htm
EX-23.1 - CALADRIUS BIOSCIENCES, INC.	v179493_ex23-1.htm
EX-10.XXX - CALADRIUS BIOSCIENCES, INC.	v179493_ex10xxx.htm

Joint Venture Contract

SUZHOU ERYE PHARMACEUTICAL CO., LTD.

Superseding the Version Executed on June 16, 2005

Amended and Restated on October 21, 2009

CHAPTER I GENERAL	2

CHAPTER II PURPOSE, BUSINESS SCOPE AND SCALE OF THE JV COMPANY	2

CHAPTER III TOTAL INVESTMENT AND REGISTERED CAPITAL	3

CHAPTER IV LIABILITIES OF THE PARTIES	4

CHAPTER V BUSINESS OPERATION	6

CHAPTER VI BOARD OF DIRECTORS	7

CHAPTER VII OPERATION AND MANAGEMENT ORGANIZATION	8

CHAPTER VIII YARD AND PLANT	9

CHAPTER IX EMPLOYMENT MANAGEMENT	9

CHAPTER X FINANCE, ACCOUNTING AND AUDITING	9

CHAPTER XI DISTRIBUTION OF PROFITS	10

CHAPTER XII NEW PLANT CONSTRUCTION	10

CHAPTER XIII COOPERATION TERM AND ASSET DISPOSAL AFTER TERMINATION	12

CHAPTER XIV AMENDMENT, CHANGE AND CANCELLATION OF CONTRACT	12

CHAPTER XV LIABILITIES FOR DEFAULT	13

CHAPTER XVI DISPUTE RESOLUTION	13

CHAPTER XVII EFFECTIVENESS AND OTHERS	14

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This Joint Venture Contract (this “Contract”) is entered into by and between:

Party A:	Suzhou Erye Economy & Trade Co., Ltd.
Registered Address:	Tainan Road, Canglang District, Suzhou
Legal Representative:	Shi Mingsheng Title: Chairman Nationality: Chinese

Party B	China Biopharmaceuticals Holdings Inc.
Legal Address:	101 East 52nd Street, New York, New York
Legal Representative:	Peng Mao Title: CEO Nationality: Canadian

WHEREAS,

(1) Party A is a limited liability company duly registered and established and validly existing under the laws of the People’s Republic of China (the “PRC”), and Party B is a limited liability company duly established and validly existing under the laws of the State of Delaware of the United States of America (the “U.S.”).

(2) NeoStem, Inc. (“NeoStem”) is a corporation duly established and validly existing under the laws of the State of Delaware of the U.S., and Party B is a wholly-owned subsidiary of NeoStem.

(3) Suzhou Erye Pharmaceutical Co., Ltd. (the “JV Company” or the “Subsisting Company”) is a limited liability company duly registered and established and validly existing under the laws of the PRC.

(5) To further specify the rights and obligations of Party A and Party B, Party A and Party B agree to enter into this Contract to supersede the original JV legal documents by amending and restating all thereof so that the original JV legal documents will have no further effect when this Contract becomes effective.

DEFINITIONS:

(1) “Subsistence-after-Split-off” shall mean the status of the JV Company where it is split off on September [ ], 2009 according to a resolution of the Board of Directors of the JV Company. Specifically, the JV Company (the Subsisting Company) will maintain business after the split-off and will carry on partial assets and all liabilities (other than the liabilities related to the assets that are split off), and, in the meanwhile, a new company (the “New Company”) will be set up to carry on partial assets. The Subsisting Company has executed a Split-off Agreement with the New Company which will become effective upon the change registration with the competent administration of industry and commerce.

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(2) “Split-off Date” shall mean the date of the change registration for the aforesaid split-off, as approved by the PRC government, with the competent administration of industry and commerce, being the first day as from which the Split-off Agreement becomes effective pursuant to the PRC laws.

(3) “Relocation of the JV Company” shall mean the construction plan for a new operation premises already carried out by the JV Company, pursuant to which the JV Company will purchase land and new equipment on the new yard (located at Huangdai Town, Xiangcheng District, Suzhou) and build plants thereon, and remove its operating activities from the old yard (859 Panxu Road, Suzhou) to the new yard after obtaining the production permit from the government authority.

(4) “Control” shall mean the activities of a party to influence the operation and decisions of the other party, through holding more than fifty percent (50%) of the equity interest, or being entitled to appoint or recommend more than fifty percent (50%) of directors of the Board, or agreement or acceptance of authorization or otherwise. “Controlling Person” or “Parent Company” shall mean such controlling party. The Control of a third company by a Controlling Person through the controlled company shall be deemed as a direct Control of such third company by the Controlling Person.

(5) “Affiliate” shall include the Parent Company controlling a party, any subsidiary under control by such party or any company under the common control with such party.

CHAPTER I

GENERAL

Article 1 Subject to the Law of the People’s Republic of China on Sino-Foreign Equity Joint Venter Enterprises and other applicable laws and regulations of the PRC, Party A and Party B agree to carry on the operation of Suzhou Erye Pharmaceutical Co., Ltd. as a joint venture (the “JV Company”). The name of the JV Company is “Suzhou Erye Pharmaceutical Co., Ltd.” in English and “苏州二叶制药有限公司” in Chinese.

Article 2 The legal address of the JV Company is at 859 Panxu Road, Canglang District, Suzhou, Jiangsu Province.

Article 3 Any and all of the activities of the JV Company shall be in compliance with the laws and regulations of the PRC and subject to the jurisdiction and protection of the PRC law.

CHAPTER II

PURPOSE, BUSINESS SCOPE AND SCALE OF THE JV COMPANY

Article 4 The purpose of the JV Company is to develop an internationally leading company by mutual efforts based on the desire of strengthening economic cooperation and technical communications. Both Party A and Party B will try to achieve the satisfactory economic benefits through scientific operation and management, and explore and develop the business of the JV Company in the spirit of mutual understanding and mutual cooperation.

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Article 5 The business scope of the JV Company covers the production and sale of sterile injection powder (penicillin and cefa-), hard capsule, crude drug (including penicillin) and aluminum cover of injection bottle, the operation of export of antibiotic active compound and antibiotic series sterile injection powder and capsule manufactured by the JV Company and of technologies related thereto, the operation of export of raw and auxiliary materials, machinery equipment, instrumentations, fittings and components, and technologies necessary for the production and scientific research of the JV Company (excluding products and technologies the operation of which is restricted or the import/export of which is prohibited by the State), and the operation of the business of processing with imported materials and the business of processing according to samples, assembling parts conducting supplied by investor or clients and/or conducting compensation trade.

Article 6 The scale of the JV Company’s production shall range from RMB200,000,000 to 300,000,000 as to its annual sales revenue, and the scale will be expanded or adjusted gradually based on the market status.

CHAPTER III

TOTAL INVESTMENT AND REGISTERED CAPITAL

Article 7 The amount of the total investment of the JV Company, as a subsisting company upon the Subsistence-after-Split-off, shall be changed to Renminbi Thirty Two Million Two Hundred and Forty Thousand yuan (RMB32,240,000) from the original Renminbi Forty Million Eight Hundred and Sixteen Thousand Four Hundred yuan (RMB40,816,400).

Article 8 The amount of the registered capital of the JV Company, upon the Subsistence-after-Split-off, shall be Renminbi Sixteen Million One Hundred and Twenty Thousand yuan (RMB16,120,000) and its paid-in capital then shall be Renminbi Sixteen Million One Hundred and Twenty Thousand yuan (RMB16,120,000).

1.	The amount of the registered capital of the JV Company before the aforesaid split-off, being Renminbi Twenty Million Four Hundred Thousand yuan (RMB20,400,000), has been fully paid up, among which,

A. an amount of Renminbi Ten Million yuan (RMB10,000,000) was subscribed by the original 38 Chinese individual shareholders upon the establishment of the JV Company on June 6, 2003 as a PRC domestic company. Party A became a shareholder of the JV Company by purchasing such amount from those original 38 Chinese individual shareholders on May 19, 2008.

B. an amount of Renminbi Ten Million Four Hundred Thousand yuan (RMB10,400,000) was injected by CBH in two installments to increase the investment, respectively, in February of 2006 and April of 2006, totaling Two Million Two Hundred Thousand US dollars (US$2,200,000), equal to Renminbi Eighteen Million Two Hundred and Eight Thousand Three Hundred yuan (RMB18,208,300) as converted at the then exchange rate, in which the amount of Renminbi Ten Million Four Hundred Thousand yuan (RMB10,400,000) has been confirmed as the registered capital of the JV Company and the residual of which is accounted as capital surplus under its capital reserve.

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Since the JV Company has been split off, the JV Company, as a subsisting company, sees a reduction in the amount of its registered capital from Renminbi Twenty Million Four Hundred Thousand yuan (RMB20,400,000) down to Renminbi Sixteen Million One Hundred and Twenty Thousand yuan (RMB16,120,000), among which Party A is holding its registered capital of Renminbi Seven Million Eight Hundred and Ninety Eight Thousand Eight Thousand yuan (RMB7,898,800) and Party B is holding its registered capital of Renminbi Eight Million Two Hundred and Twenty One Thousand Two Hundred yuan (RMB8,221,200). Party A and Party B have paid up their subscribed amounts of registered capital respectively.

Article 9 When this Contract becomes effective, Party A holds 49% of the total registered capital of the JV Company and Party B holds 51% of the total registered capital of the JV Company.

Article 10 If a party hereto (the “Transferring Party”) intends to transfer its equity interest in the JV Company to a third party, such Transferring Party must first offer such equity interest to the other party hereto (the “Non-Transferring Party”) in a writing (the “Offer”) setting forth the terms and conditions for the interest to be transferred. If the Non-Transferring Party refuses the Offer, or fails to accept the Offer within 90 days (the “Consideration Period”), or fails to close on the Offer within 45 days (the “Closing Period”) after accepting the Offer, the Transferring Party shall be free to offer, within 90 days commencing from the earliest of such refusal, the end of the Consideration Period or the end of the Closing Period, its equity interest to any third party, and close the transfer within 45 days after such offer is accepted, on such terms and conditions as can be verified by the Non-Transferring Party to be no more favorable than those for the Offer to the Non-Transferring Party.

The transfer of its equity interest by either party hereto to any other third party shall mean such circumstance that causes the change of the actual Controlling Person of the Transferring Party, including but not limited to:

1. Either party hereto directly transfers its equity interest in the JV Company to any third party, or otherwise disposes of such equity interest to the effect that such equity interest would be actually transferred; or

2. The actual Controlling Person of either party hereto holding more than 50% of the equity interest of such party changes unless such Controlling Person is a public company.

CHAPTER IV

LIABILITIES OF THE PARTIES

Article 11 Either party hereto represents and warrants to the other party hereto as follows:

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1. It has any and all of the civil rights and capacities necessary to the execution and performance of this Contract which will not violate or breach any and all of the legal documents, including but not limited to the articles of association, contracts and agreements, binding on it.

2. It has taken or will take any and all of the necessary actions in order to obtain any and all of the consents, approvals, authorizations and permits required by the execution and performance of this Contract.

3. It will make its best efforts to cooperate closely with the other party hereto on reliance of the doctrines of good faith, pragmatism and responsibility so as to cause this Contract to be performed in a sound and smooth manner, and strictly comply with any and all of the principles set out herein and commit nothing that may impair the performance of this Contract.

4. As of the date on which this Contract becomes effective, it has not, and undertakes that none of its Affiliates has, individually or jointly with any third party, engaged or participated in, or owned any interests or benefits in, any business of chemical drugs that directly competes with the JV Company.

5. Either party hereto confirms with the other party hereto that the equity interest of the other party hereto in the JV Company is legitimate and valid and that it will use its best efforts to defend the shareholder’s interests of the other party hereto.

Article 12 Party A represents and warrants as follows:

1. Any and all of the materials that have been or will be furnished to Party B by it shall be true, complete, correct and not misleading.

2. It has obtained any requisite authority, permit, authorization, license and consent, including but not limited to the business license issued by the competent administration of industry and commerce, necessary to carry on its business operation, and its operation has not exceeded the approved business scope and provisions of its articles of association.

Article 13 Party B represents and warrants as follows:

1. Any and all of the information disclosed to Party A by it is true, timely and complete.

2. It shall not make any claim over or challenge any agreement entered into by the JV Company as of the date hereof so long as such agreement has been disclosed pursuant to the U.S. securities law or was entered into in the ordinary course of business with normal commercial terms.

3. It has informed NeoStem of the contents hereof. NeoStem irrevocably undertakes to guarantee its obligations and liabilities hereunder, and the undertaking letter issued by NeoStem for such purpose in the form attached hereto shall constitute an integral part of this Contract.

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4. Prior to the investment by it in any chemical drug manufacturing company that competes directly with the business of the JV Company, it must obtain the consent from the JV Company. It shall consult with the JV Company prior to introducing any new chemical drug into the PRC with respect to whether the same can be produced in a more cost-saving or efficient manner by the JV Company.

CHAPTER V

BUSINESS OPERATION

Article 14 Any business conducted by the JV Company shall be decided and carried out by the Board of Directors of the JV Company.

Party B will be entitled to, with a reasonable prior notice to the JV Company, periodically send its representatives to visit the JV Company and consult with the senior management of the JV Company with respect to operation, financial conditions, strategy and other similar issues.

Article 15 The JV Company shall mainly purchase the raw and auxiliary materials necessary for its production in the PRC domestic market, and sell most of its finished products in the PRC domestic market, with a small amount sold abroad.

Article 16 The JV Company shall continue to use the existing production equipment and technologies to conduct its business. If the purchase of any additional equipments or technologies becomes necessary, the priority will be given to the PRC domestic market.

Article 17 Should NeoStem succeed in its development of stem cell medicine, Party B shall, if permitted by the applicable PRC law, be responsible for introducing such medicine into the PRC, in which case the JV Company shall enjoy the priority right of production and sale of the same in the PRC, subject, however, to the capability of the JV Company in such production and sales activities, taking into consideration factors including the competitive costs, time-to-market, quality, stability and other similar aspects of the same.

Article 18 Party B or NeoStem shall from time to time study the feasibility of introducing certain commercially potential patented medicine into the PRC under the appropriate market conditions, based on the existing resources and general market circumstances. In the event Party B or NeoStem fails to support the JV Company in terms of products, Party B or NeoStem shall, subject to the approval of their respective board of directors, provide the JV Company with the R&D funds support based on its future demands and business development.

Article 19 Since the integration of the PRC domestic pharmaceutical industry provides a new opportunity, Party A will seize any chance to seek and land some merger and/or acquisition projects favorable for the development of the JV Company pursuant to the guidelines and standards mutually agreed by Party A and Party B or NeoStem. Party B undertakes that NeoStem will conduct a due diligence investigation towards the target acquisition together with Party A, and NeoStem or Party B will, subject to the approval of NeoStem’s board of directors, provide capital or equity support therefor.

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CHAPTER VI

BOARD OF DIRECTORS

Article 20 The number of the members of the Board of Directors of the JV Company shall be reduced from seven (7) to five (5), among whom two (2) Directors shall be appointed by Party A and three (3) Directors shall be appointed by Party B. One of the Directors appointed by Party B shall be the director on the board of directors of NeoStem appointed by Party A (and such Director shall represent the interests of Party B in the discharge of his or her duties as a Director). The tenure of each Director shall be four (4) years, renewable upon re-appointment consecutively.

The Chairman of the JV Company shall be the Director appointed by Party A to the Board of Directors and shall be the legal representative of the JV Company.

The CFO of the JV Company shall be appointed by Party A.

Article 21 The Board of Directors shall be the highest authority of the JV Company and shall decide any and all of the major issues of the JV Company.

With regard to any of the following matters, no resolution may be adopted without the affirmative voting of more than seventy five percent (75%) of the entire members of the Board of Directors:

1. Disposition of any and all of the material assets of the JV Company;

2. Change of more than 50% of equity interest;

3. Change of more than a half of the entire Directors, in the accumulative aggregate, within any consecutive twenty four (24) months, excluding any change due to retirement, injury, illness, death, voluntary resignation, termination of employment or any other similar cause;

4. Decision on the material strategy of operation and development of the JV Company; and

With regard to any of the following matters, no resolution may be adopted without the unanimous consensus of all the Directors present at a board meeting:

1. Amendment to the Articles of Association of the JV Company;

2. Termination or dissolution of the JV Company;

3. Increase or reduction of the registered capital of the JV Company; and

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4. Merger or divestiture of the JV Company.

Except the major issues set forth above, decisions with respect to all other issues required voting of the Directors may be adopted by more than half of the entire members of Board of Directors.

Article 22 The Board of Directors shall meet at least one (1) time during each year, and shall be convened and presided over by the Chairman or, if the Chairman is incapable of doing so, by a Director authorized by the Chairman. Upon the request of any two Directors, the Chairman shall convene an interim meeting of the Board of Directors. Any Director may attend any Board meeting telephonically.

Article 23 The quorum for any meeting of the Board of Directors shall be at least four (4) Directors.

If a Director is unable to attend a meeting of the Board of Directors, he or she may issue a proxy and entrust a representative to attend the meeting and vote on his or her behalf, whose attendance shall be deemed the same as attendance by him or her.

The minutes of any and all of the meetings of the Board of Directors shall be signed by all the Directors present at the meeting before kept into files.

A meeting of the Board of Directors shall generally be held at the place of legal address of the JV Company.

CHAPTER VII

OPERATION AND MANAGEMENT ORGANIZATION

Article 24 The JV Company shall establish its management structure responsible for its day-to-day corporate management. The management structure shall consist of one (1) General Manager who shall be engaged by the Board of Directors for a tenure of four (4) years, renewable upon re-assignment consecutively.

Article 25 The General Manager shall be responsible for carrying out any and all of the resolutions of the Board of Directors and organizing and directing the day-to-day management of the JV Company. Within the authorization by the Board of Directors, the General Manager shall act on behalf of the JV Company, hire or dismiss any employees under his or her level, and exercise such other powers as granted by the Board of Directors.

Article 26 The Chairman or any Director may concurrently serve as General Manager or other senior officer of the JV Company upon the engagement by the Board of Directors. In the event the General Manager or any of other senior officers practices graft or commits a gross neglect of duty, the Board of Directors may make a resolution at any time to dismiss and impose a necessary punishment on him or her.

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CHAPTER VIII

YARD AND PLANT

Article 27 With respect to the old yard of the JV Company in use and located at 859 Panxu Road, Suzhou, the land area is 45,024.2 square meters and construction area is 33,492.75 square meters. The land use right to and all the buildings on such old yard have been split off to the New Company because of the occurrence of the Subsistence-after-Split-off to the JV Company which will lease, at a token price, the land and plant buildings (i.e. the old yard) from the New Company, and maintain the original operation and businesses unchanged.

The land area of the new yard of the JV Company located at Huangdai Town, Xiangcheng District, Suzhou is 107,385.6 square meters, while buildings and plants thereon are now under construction. The land use right to and the buildings on such new yard belong to and are possessed by the JV Company.

CHAPTER IX

EMPLOYMENT MANAGEMENT

Article 28 The JV Company undertakes that it will continue to employ each and every former employee before joint venture. Any recruitment and dismissal of the employees of the JV Company shall be reviewed and determined by the Board according to the PRC Labor Law, the PRC Labor Contract Law and other applicable PRC regulations. The JV Company and the trade union thereof shall collectively or with individual separately enter into labor contracts. The labor contract shall, once duly executed, be filed with the competent local labor administration authority.

Article 29 All payments in connection with salaries, benefits and labor insurances of the employees of the JV Company shall be made pursuant to the PRC Labor Law and other applicable PRC regulations.

CHAPTER X

FINANCE, ACCOUNTING AND AUDITING

Article 30 Any fiscal year of the JV Company shall commence on January 1st and end on December 31st of the same year. Any and all of the vouchers, bills, statements and books shall be prepared in Chinese. The JV Company shall use Renminbi as its standard bookkeeping currency.