Exhibit 10.1

 

 

Strategic Cooperation Agreement to Source Raw Plasma

(Summary translation)

 

 

This Agreement is entered on August 28, 2015 by and between:

 

Party A: Xinjiang Deyuan Bioengineering Co., Ltd.

 

Party B: Guizhou Taibang Biological Products Co., Ltd.

 

Party C: Lv Xianzhong

 

WHEREAS:

 

1.Party A has certain source plasma inventory for producing blood products.
Party A has financial difficulty in keeping the daily operation of its plasma
collections stations.

 

2.Party B has the need for source plasma and has a good financial position to
provide financial support for Party A.

 

3.Party C holds a 58.02% equity interest in Party A and will provide a pledge of
his equity interest in Party A to secure a loan to be granted to Party A.

 

4.Party A and Party B entered into a Memorandum of Understanding on June 24,
2015, which provides that Party A will entrust the operation of its plasma
collection stations to Party B on the condition that Party A obtains the
approval by the Xinjiang Health and Family Planning Commission. Party A obtained
such approval on July 21, 2015 (“Administration Approval”).

 

NOW, THEREFORE, in consideration of the premises set forth above, according to
the relevant laws and regulations and after adequate and friendly negotiations,
the Parties hereto agree as follows:

 

Section 1 Form of Collaboration

 

1.1 Party A’s plasma collection stations (the “Plasma Collection Stations”),
which include stations that have been established, i.e., Zepu county plasma
collection station, Cele county plasma collection station, Shule county plasma
collection station, Xinhe county plasma collection station and Jimusaier county
plasma collection station, and stations to be established, i.e., Buerjin county
plasma collection station, Shawan county plasma collection station, Tuoli county
plasma collection station, Wensu county plasma collection station and Kunyu
county plasma collection station, shall supply source plasma to Party B at the
price agreed by both parties in accordance with the Administration Approval.

 

 

 

1.2 Party B shall lend to Party A an interest-bearing loan (the “Loan”) with a
principal amount of RMB300 million to assist Party A in dealing with its
financial difficulty and promoting the collaboration between both parties.

 

1.3 Party C shall provide a pledge of his 58.02% equity interest in Party A for
Party B to secure the loan Party B grants to Party A.

 

Section 2 Terms of the Loan

 

2.1 Party A shall use the Loan primarily for the operation and/or establishment
of the Plasma Collection Stations, its operations and repayment of debts.

 

2.2 The Loan will be released by Party B to Party A in two instalments.

 

2.2.1 The first instalment of the Loan is RMB180 million. In consideration of
the fact that Party B lent Party A RMB30 million on July 28, 2015, which shall
form part of the Loan under this Agreement and be deducted therefrom, Party B
shall lend Party A the remaining RMB150 million. Party B shall transfer the
remaining payment into Party A’s account within three business days of the
registration of Party C’s equity pledge.

 

2.2.2 The second instalment of the Loan is RMB120 million may be paid to the
creditors of Party A either under the written instruction by Party A or
according to the court order or arbitral award if Party A settles with its
creditors. The payment to the creditors of Party A is deemed as a release of
this instalment of the Loan. If the payment to the creditors is less than RMB120
million, the balance will be released to Party A upon the notification by Party
A. If the payment to the creditors exceeds RMB120 million, the extra amount is
deemed as an addition to the Loan under this Agreement.

 

2.3 The term of the Loan starts from the date when the Loan is released until
July 31, 2018. (The release date of each instalment of the Loan is the date when
that instalment is actually released.)

 

2.4 Interest Rate and Compound Interest

 

2.4.1 The annual interest rate of the Loan is 6% during its term.

 

2.4.2 Interest Calculation and Settlement

 

2.4.2.1 The interest shall be paid on a quarterly basis and the date of the
interest payment is the 20th day of the last month of each quarter. If the
expiry date of the principal payment is not on the date of the interest payment,
Part A shall pay off the principal and the interests on the expiry date of the
principal payment.

 

2.4.2.2 For interest payment dates that are national holidays or weekends, the
dates will be postponed to the following business day.

 

2.4.3 A compound interest will be calculated using the agreed interest rate from
the date that Party A fails to pay interests in accordance with this Agreement.

 

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2.5 Upon the expiration of the loan term, Party A, Party B and Party C may agree
on an extension of the loan term and sign a supplementary agreement on the
condition that the Plasma Collection Stations continue to supply Party B with
source plasma.

 

2.6 Party A may prepay the Loan and the interests will be calculated according
to the actual loan term and the agreed interest rate.

 

2.7 If Party A defaults on repayment of the principal of the Loan and interests
accrued, Party B shall only pay the Plasma Collection Stations 55% of the price
of the source plasma supplied and the remaining 45% of the price will be kept to
offset the principal and interests owed by Party A till the owed principal and
interests are fully offset. When Party A pays off the principal and interests,
Party B shall refund the deducted price to the Plasma Collection Stations.

 

Section 3 Undertakings

 

3.1 Party A

 

3.1.1 Party A undertakes that Party A has fulfilled procedures necessary under
relevant laws and articles for the implementation of this Agreement. Party A
undertakes that the effectiveness of this Agreement will not be adversely
impacted due to Party A’s fault.

 

3.1.2 Party A undertakes that it shall use the fund provide by Party B according
to the agreed loan term, use of proceeds and manner of use.

 

3.1.3 Party A undertakes that it shall seek Party B’s permission before making
any significant decisions (e.g., increasing debts, increasing funding, merger,
spin-off, transfer of equity interest). Party A shall timely notify Party B when
there is any material adverse event affecting Party A’s ability to repay debt.
Party A undertakes that there is no breach of contractual obligations by Party
A.

 

3.2 Party B

 

3.2.1 Party B undertakes that it shall provide funding for Party A according to
this Agreement.

 

3.2.2 Party B undertakes that it shall make the payment for the supply of source
plasma from the Plasma Collection Stations and Party A according to the
following arrangement: for each tonne of source plasma supplied to Party B,
Party B shall pay RMB0.8 million to the plasma collection station itself and
RMB0.35 million to Party A as management fees.

 

3.3 Party C

 

3.3.1 Party C undertakes that the equity interest pledged under this Agreement
is free of defect and he has complete and undisputable ownership of the equity
interest.

 

3.3.2 Party C undertakes that his equity interest in Party A is not subject to
seizure, inspection or has any other circumstances that may adversely impact the
registration process of the equity pledge.

 

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3.3.3 Party C undertakes that there is nothing existing on the equity interest
pledged that may impact the realization of the equity pledge.

 

3.3.4 Party C undertakes that he shall notify Party B and seek Party B’s
permission in advance in the case that the equity interest may be diluted.

 

Section 4 Operation, Management of Plasma Collection Stations; Supply and
Payment of Source Plasma

 

4.1 Party A entrusts the operation of its Plasma Collection Stations to Party B
and supply Party B with source plasma. The Plasma Collection Stations shall
enter into plasma supply agreements and quality guarantee agreements with Party
B. Party B shall only use the source plasma supplied for the production of
plasma-based products and shall not transfer the source plasma or use the source
plasma for research purposes related to Rh-negative blood either by itself or by
third parties.

 

4.2 The Plasma Collection Stations shall have independent bank accounts and be
registered as independent legal persons.

 

4.3 Party B shall entrust the management of Plasma Collection Stations to Party
A and Party B shall be entitled to inspect and instruct the management of the
stations.

 

Party A shall indemnify Party B and defend Party B when the Plasma Collection
Stations face any claim, loss, suits or punishment that adversely impacts Party
B due to Party A’s reasons

 

4.4 The Plasma Collection Stations as provided under the Administration Approval
shall sign plasma supply agreements and quality guarantee agreements with Party
B in accordance the relevant regulations.

 

4.5 The supply period of source plasma starts from the validation date of this
Agreement to the date when the accumulated supply of source plasma reaches 500
tonnes, which is expected to be around July 31, 2018. Upon the expiration of the
supply period, Party A and Party B may agree to an extension thereof.

 

4.6 Party A shall ensure that the supply of source plasma to Party B before July
31, 2018 is no less than 500 tonnes. For the first year (12 months starting from
the validation date of this Agreement), the supply shall be no less than 120
tonnes. For the second year, the supply shall be no less than 180 tonnes. For
the third year, the supply shall be no less than 200 tonnes.

 

4.7 Party A is responsible for the delivery of source plasma to the address of
Party B. All of the risks and fees for transportation shall be borne by Party A.
Party B shall conduct the inspection within 48 hours of the arrival of the
source plasma and make the payment within 5 days of acceptance. Party B shall
pay a penalty at a rate of 0.3% accrued daily on the total amount charged from
the date when the delay of payment has taken place. If the payment has been late
for more than one month, Party A shall be entitled to terminate this Agreement
and Party B is liable for breach of this Agreement under Section 6.6.

 

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Section 5 Pledge of Equity interest

 

5.1 Party C shall provide a pledge of his 58.03% equity interest in Party A for
Party B to secure the Loan and the interests, liquidated damages and fees
arising from the Loan and this Agreement.

 

5.2 Registration of the Pledge

 

5.2.1 Party C shall complete the registration of the equity pledge within 15
days of the receipt of RMB40 million by Party A from Party B as the source
plasma price under the previous cooperation agreement. The equity pledge
agreement signed by Party B and Party C shall be for the registration purpose
only. If there is any inconsistency between the equity pledge agreement and this
Agreement, this Agreement shall prevail.

 

5.2.2 Party B shall be entitled to terminate this Agreement by serving Party A
and Party C a written notice if Party C fails to register the pledge within the
agreed period and within 10 days after being notified in writing by Party B.
Party A shall repay the principal and interests to Party B within 5 days of the
termination of this Agreement.

 

5.2.3 The pledge period starts from the date when the registration of the pledge
takes effect to the date when Party A repays the principal and interests in
full.

 

5.3 Realization of Pledge

 

Party B shall be entitled to realize the pledge rights and receive payment
therefrom in priority by having the pledge rights auctioned, transferred or sold
if any of the following events takes places:

 

(1)Party A fails to fulfil its obligations (including but not limited to
repaying principal, interests, liquidated damages, penalties or any economic
loss suffered by Party B due to reasons related to Party A or Party C) within 3
months of the expiration of the performance period under this Agreement;

 

(2)Party A breaches any of the undertakings as stated in Section 3.3, making
this Agreement unenforceable;

 

(3)Party C breached any of the undertakings as stated in Section 3.3, making
this Agreement unenforceable;

 

(4)Party A’s Plasma Collection Stations deliberately breach the plasma supply
agreements and quality guarantee agreements, making this Agreement
unenforceable; and

 

(5)Other circumstances that may impact the realization of the pledge and makes
this Agreement unenforceable.

 

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Section 6 Special Covenants

 

6.1 In the event that this Agreement is amended or supplemented due to force
majeure, the parties hereto shall make efforts to hold Party B harmless against
the effect of force majeure.

 

6.2 Party B shall be entitled to terminate this Agreement when Party A or Party
C breaches any undertaking or substantive provision and makes this Agreement
unenforceable, in which case Party A shall repay principal and interests within
three months of the termination hereof. Party A shall be entitled to terminate
this Agreement if Party B fails to grant the Loan or pay source plasma price
timely.

 

6.3 In the event that this Agreement becomes unenforceable due to third parties
claims related to Party A or Party C, Party B shall be entitled to termination,
in which case Party A and Party C is liable for breach of contract and Party A
shall repay principal and interests in ten days and pay a penalty of 10% of the
principal to Party B. Instead of terminating the Agreement, Party B may also
demand Party A and Party C eliminate the adverse impact and continue performance
within 30 days. If the adverse impact is not eliminated within 30 days, Party B
shall be entitled to terminate the Agreement, in which case Party A shall pay
off the principal and interests in ten days and pay a penalty of 10% of the
principal to Party B.

 

6.4 In the case that this Agreement becomes unenforceable due to the revocation
of the Administration Approval, the Agreement is terminated and there is no
breach of contract. Party A shall repay principal and interests within three
months of the revocation.

 

6.5 Party A shall be jointly liable to Party B for any breach of contract
arising from the illegal conduct by the Plasma Collection Stations.

 

6.6 In the event that this Agreement becomes unenforceable due to Party B’s
reasons, Party B shall take full responsibility of the losses and liabilities
and shall pay a penalty of 10% of the principal to Party A.

 

6.7 Within one month of the expiration of this Agreement, the operation control
of the Plasma Collection Stations entrusted to Party B shall be rewound. If the
rewinding date is delayed due to Party B’s reasons, Party B shall pay a penalty
of RMB10,000 accrued on a daily basis to Party A till the reason for delay no
longer exists or the rewinding of operational control is completed.

 

Section 7 Dispute Resolution

 

Both parties shall solve the disputes arising from this Agreement through
friendly negotiation. If the dispute cannot be resolved through negotiation,
each party may submit the dispute to a court having jurisdiction in the areas
where the Agreement is signed.

 

Section 8 Validation of the Agreement

 

This Agreement shall become valid upon signature by Party A, Party B and Party C
at No.19 Chaoyang Park Road, Chaoyang District, Beijing.

 

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Section 9

 

This Agreement is made in nine counterparts, and each party holds three. Each
counterpart has the same legal effect.

 

 

 

Party A: Xinjiang Deyuan Bioengineering Co., Ltd. (Seal)

 

Legal Representative or Authorized Representative (Signature): /s/ Lv Xianzhong

 

 

 

Party B: Guizhou Taibang Biological Products Co., Ltd. (Seal)

 

Legal Representative or Authorized Representative (Signature): /s/ Xiaoying Gao

 

 

 

Party C: Lv Xianzhong (Signature): /s/ Lv Xianzhong

 

August 28, 2015

 

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