Unassociated Document


    EXECUTION
VERSION

     

     

    ESCROW
AGREEMENT

    


    This
Escrow Agreement dated this [__] day of November 2010 (the “Escrow Agreement”),
is entered into by and among Neostem Inc., a Delaware Corporation (“Neostem”),
JGB Management Inc., a Delaware Corporation, as agent (“Agent,” and together
with Neostem, the “Parties,” and each individually, a “Party”) for the
purchasers under that certain Securities Purchase Agreement dated as of November
16, 2010 (the “Purchase Agreement”) among Neostem and the purchasers party
thereto (the “Purchasers”), and Wells Fargo Bank, National Association, as
escrow agent (“Escrow Agent”).

    


    RECITALS

    


    A.           Neostem
and the Purchasers have entered into Purchase Agreement pursuant to which
Neostem has agreed to sell, and the Purchasers have agreed to purchase, Senior
Convertible Preferred Stock, Common Stock and Warrants (the “Securities”)
to be issued pursuant to the Certificate of Designations of the Powers,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of 7%
Senior Convertible Preferred Stock for Neostem, Inc. dated November 16, 2010
(the “Certificate of Designations”) for consideration of $10,000,000 (the
“Purchase Price”).  Capitalized terms used herein that are not defined
shall have the meanings given to them in the Certificate of
Designations.

    


    B.           The
Purchase Agreement requires that twenty-five per cent of the Purchase Price (the
“Escrowed Amount”) be deposited into escrow to secure certain payment
obligations of Neostem to the Purchasers under the Certificate of
Designations;

    


    C.           The
Parties agree to place the Escrowed Amount in escrow and the Escrow Agent agrees
to hold and distribute such funds in accordance with the terms of this Escrow
Agreement.

    


    In
consideration of the promises and agreements of the Parties and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties and the Escrow Agent agree as follows:

    


    ARTICLE
1

    ESCROW
DEPOSIT

    


    Section
1.1.  Receipt of Escrow
Property. Upon execution hereof,
Agent shall deliver to the Escrow Agent the amount of $2,500,000 (the “Escrow
Property”) in immediately available funds.  Neostem may, from time to
time, as obligated under the Certificate of Designations, deposit additional
funds into the escrow, which funds will become “Escrow Property.”

     

    
      
         

      

      
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    EXECUTION
VERSION

     

     

    Section
1.2.  Investments.

    


    (a)           The
Escrow Agent is authorized and directed to deposit, transfer, hold and invest
the Escrow Property and any investment income thereon as set forth in Exhibit A
hereto, or as set forth in any subsequent written instruction signed by the
Parties.  Any investment earnings and income on the Escrow Property
shall become part of the Escrow Property, and shall be disbursed in accordance
with Section 1.3 or Section 1.5 of this Escrow Agreement.

    


    (b)           The
Escrow Agent is hereby authorized and directed to sell or redeem any such
investments as it deems necessary to make any payments or distributions required
under this Escrow Agreement.  The Escrow Agent shall have no
responsibility or liability for any loss which may result from any investment or
sale of investment made pursuant to this Escrow Agreement; provided that the
Escrow Agent has invested the Escrow Property in accordance with Exhibit
A.  The Escrow Agent is hereby authorized, in making or disposing of
any investment permitted by this Escrow Agreement, to deal with itself (in its
individual capacity) or with any one or more of its affiliates, whether it or
any such affiliate is acting as agent of the Escrow Agent or for any third
person or dealing as principal for its own account.  The Parties
acknowledge that the Escrow Agent is not providing investment supervision,
recommendations, or advice.

    


    Section
1.3.  Disbursements.

    


    (a)
Subject to subsection (d) below, Escrow Agent shall hold
the Escrowed Property and all interest accrued thereon and shall dispose of the
same only in accordance with the following provisions:

    


    (i) upon
receipt of a written notice from the Agent stating (1) that Neostem failed to
pay when due the cash portion of the Mandatory Redemption Price under Section
6(c) of the Certificate of Designations and/or the Stock Replacement Payment or
cash payments due under Section 6(d)(ii) of the Certificate of Designations and
(2) the dollar amount of the unpaid Mandatory Redemption Price or Stock
Replacement Payment, as appropriate, the Escrow Agent shall deliver to the
Agent, for the benefit of the Purchasers, cash equal to the lesser of the unpaid
Mandatory Redemption Price and/or Stock Replacement Payment and the remaining
balance of the Escrow Property (including any accrued interest);

    


    (ii) upon
receipt of a written notice from the Agent stating (1) that Neostem failed to
pay any amount due in cash under Section 7 of the Certificate of Designations
and (2) the amount of damages due to it under Section 7(c) of the Certificate of
Designations, the Escrow Agent shall deliver to the Agent, for the benefit of
the Purchasers, cash equal to the lesser of the damages due and the remaining
balance of the Escrow Property (including any accrued interest);

     

    
      
         

      

      
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    EXECUTION
VERSION

     

     

    (iii)  upon
receipt of a written notice from the Agent stating (1) that Neostem failed to
pay any amount due under Section 8 of the Certificate of Designations and (2)
the amount due and owing thereunder, the Escrow Agent shall deliver to the
Agent, for the benefit of the Purchasers, cash equal to the lesser of the
damages due and the remaining balance of the Escrow Property (including any
accrued interest);

    


    (iv)  upon
receipt of a written notice from the Agent stating (1) that Neostem has an
obligation to repurchase all or a portion of the Preferred Shares pursuant to
Section 9 of the Certificate of Designations, (2) that Neostem has failed to
repurchase the required portion of the Preferred Shares when required to do so
and (3) the amount due to the Purchasers, the Escrow Agent shall deliver to the
Agent, for the benefit of the Purchasers, cash equal to the lesser of the amount
due and the remaining balance of the Escrow Property (including any accrued
interest);

    


    (v) upon
receipt of a written notice from Neostem stating (1) that no amounts are
presently due and owing to the Purchasers under the Certificate of Designations
and (2) the aggregate Liquidation Preference of the outstanding Preferred Stock
as of the date of the notice (the “Liquidation Preference Amount”) is less than
the balance of the Escrow Property, the Escrow Agent shall deliver to Neostem
cash equal to the difference between the Liquidation Preference Amount and the
remaining balance of the Escrow Property (including any accrued interest);
and

    


    (vi) upon
a joint written direction signed by the Parties, the Escrow Agent shall disburse
the Escrow, or the appropriate portion thereof, in accordance with the written
direction.

    


    (b)           Any
notice given by a Party to the Escrow Agent under subsection (a) above shall
include the relevant dollar amount related to that notice and shall also be
given to the other Party simultaneously.

    


    (c)           The
Escrow Agent’s sole duty is to accept notice under subsection (a) and shall have
no duty to determine nor shall be liable to ascertain the validity of the claims
of the Agent or Neostem under subsection (a).

    


    (d)           The
Escrow Agent shall disburse any Escrow Property eight (8) business days after
receiving notice under subsection (a) unless it receives written notice pursuant
to Subsection (e) hereto, upon which subsection (e) shall govern.

    


    (e)           To
the extent that the non-requesting Party objects in good faith to any request
for payment, such Party must deliver a written objection notice, stating the
basis for such objection, to the Escrow Agent and the other Party within seven
(7) business days after receipt of the notice requesting payment and such
objection shall be resolved in accordance with Section 3.5 hereof.

     

    
      
         

      

      
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      EXECUTION VERSION

      
 

    

    (f)  The
Escrow Agent shall deliver the applicable portion of the Escrow Property at the
election of the Party entitled to receive the same by (i) a good, unendorsed
check of Escrow Agent payable to the order of such Party, or (ii) a bank wire
transfer to an account designated by such Party.

    


    Section
1.4.  Income
Tax Allocation and Reporting.

    


    (a)           The
Parties agree that, for tax reporting purposes, all interest and other income
from investment of the Escrow Property shall, as of the end of each calendar
year and to the extent required by the Internal Revenue Service, be reported as
having been earned by Neostem, whether or not such income was disbursed during
such calendar year.

    


    (b)           Prior
to closing, the Parties shall provide the Escrow Agent with certified tax
identification numbers by furnishing appropriate forms W-9 or W-8 and such other
forms and documents that the Escrow Agent may request.   The
Parties understand that if such tax reporting documentation is not provided and
certified to the Escrow Agent, the Escrow Agent may be required by the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder, to
withhold a portion of any interest or other income earned on the investment of
the Escrow Property.

    


    (c)           To
the extent that the Escrow Agent becomes liable for the payment of any taxes in
respect of income derived from the investment of the Escrow Property, the Escrow
Agent shall satisfy such liability to the extent possible from the Escrow
Property.  The Parties, jointly and severally, shall indemnify, defend
and hold the Escrow Agent harmless from and against any tax, late payment,
interest, penalty or other cost or expense that may be assessed against the
Escrow Agent on or with respect to the Escrow Property and the investment
thereof unless such tax, late payment, interest, penalty or other expense was
directly caused by the gross negligence or willful misconduct of the Escrow
Agent.  The indemnification provided by this Section 1.4(c) is in
addition to the indemnification provided in Section 3.1 and shall survive the
resignation or removal of the Escrow Agent and the termination of this Escrow
Agreement.

    


    Section
1.5.  Termination.  Upon
the disbursement of all of the Escrow Property, including any interest and
investment earnings thereon, this Escrow Agreement shall terminate and be of no
further force and effect except that the provisions of Sections 1.4(c), 3.1 and
3.2 hereof shall survive termination.

     

    
      
         

      

      
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      EXECUTION VERSION

      
 

    

    ARTICLE
2

    DUTIES OF
THE ESCROW AGENT

    


    Section
2.1.  Scope
of Responsibility.  Notwithstanding any provision to the
contrary, the Escrow Agent is obligated only to perform the duties specifically
set forth in this Escrow Agreement, which shall be deemed purely ministerial in
nature.  Under no circumstances will the Escrow Agent be deemed to be
a fiduciary to any Party or any other person under this Escrow
Agreement.  The Escrow Agent will not be responsible or liable for the
failure of any Party to perform in accordance with this Escrow Agreement. The
Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of
the terms and conditions of any other agreement, instrument, or document other
than this Escrow Agreement, whether or not an original or a copy of such
agreement has been provided to the Escrow Agent; and the Escrow Agent shall have
no duty to know or inquire as to the performance or nonperformance of any
provision of any such agreement, instrument, or document.  References
in this Escrow Agreement to any other agreement, instrument, or document are for
the convenience of the Parties, and the Escrow Agent has no duties or
obligations with respect thereto.  This Escrow Agreement sets forth
all matters pertinent to the escrow contemplated hereunder, and no additional
obligations of the Escrow Agent shall be inferred or implied from the terms of
this Escrow Agreement or any other agreement.

    


    Section
2.2.  Attorneys and
Agents.  The Escrow Agent shall be entitled to rely on and
shall not be liable for any action taken or omitted to be taken by the Escrow
Agent in accordance with the advice of counsel or other professionals retained
or consulted by the Escrow Agent.  The Escrow Agent shall be
reimbursed as set forth in Section 3.1 for any and all compensation (fees,
expenses and other costs) paid and/or reimbursed to such counsel and/or
professionals.  The Escrow Agent may perform any and all of its duties
through its agents, representatives, attorneys, custodians, and/or
nominees.

    


    Section
2.3.  Reliance.  The
Escrow Agent shall not be liable for any action taken or not taken by it in
accordance with the direction or consent of the Parties or their respective
agents, representatives, successors, or assigns.  The Escrow Agent
shall not be liable for acting or refraining from acting upon any notice,
request, consent, direction, requisition, certificate, order, affidavit, letter,
or other paper or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, without further inquiry
into the person’s or persons’ authority.  Concurrent with the
execution of this Escrow Agreement, the Parties shall deliver to the Escrow
Agent authorized signers’ forms in the form of Exhibit B-1 and Exhibit B-2 to
this Escrow Agreement.

    


    Section
2.4.  Right
Not Duty Undertaken.  The permissive rights of the Escrow Agent
to do things enumerated in this Escrow Agreement shall not be construed as
duties.

    


    Section
2.5.  No
Financial Obligation.  No provision of this Escrow Agreement
shall require the Escrow Agent to risk or advance its own funds or otherwise
incur any financial liability or potential financial liability in the
performance of its duties or the exercise of its rights under this Escrow
Agreement.

     

    
      
         

      

      
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      EXECUTION VERSION

       

       

    

    ARTICLE
3

    PROVISIONS
CONCERNING THE ESCROW AGENT

    


    Section
3.1.  Indemnification.  The
Parties, jointly and severally, shall indemnify, defend and hold harmless the
Escrow Agent from and against any and all loss, liability, cost, damage and
expense, including, without limitation, attorneys’ fees and expenses or other
professional fees and expenses which the Escrow Agent may suffer or incur by
reason of any action, claim or proceeding brought against the Escrow Agent,
arising out of or relating in any way to this Escrow Agreement or any
transaction to which this Escrow Agreement relates, unless such loss, liability,
cost, damage or expense shall have been finally adjudicated to have been
directly caused by the willful misconduct or gross negligence of the Escrow
Agent. The provisions of this Section 3.1 shall survive the resignation or
removal of the Escrow Agent and the termination of this Escrow
Agreement.

     

    Section
3.2.  Limitation of
Liability.  THE ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR
INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES
PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN
FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST
PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

     

    Section
3.3.  Resignation or
Removal.  The Escrow Agent may resign by furnishing written
notice of its resignation to the Parties, and the Parties may remove the Escrow
Agent by furnishing to the Escrow Agent a joint written notice of its removal
along with payment of all fees and expenses to which it is entitled through the
date of termination.  Such resignation or removal, as the case may be,
shall be effective thirty (30) days after the delivery of such notice or upon
the earlier appointment of a successor, and the Escrow Agent’s sole
responsibility thereafter shall be to safely keep the Escrow Property and to
deliver the same to a successor escrow agent as shall be appointed by the
Parties, as evidenced by a joint written notice filed with the Escrow Agent or
in accordance with a court order.  If the Parties have failed to
appoint a successor escrow agent prior to the expiration of thirty (30) days
following the delivery of such notice of resignation or removal, the Escrow
Agent may petition any court of competent jurisdiction for the appointment of a
successor escrow agent or for other appropriate relief, and any such resulting
appointment shall be binding upon the Parties.

     

    
      
         

      

      
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      EXECUTION VERSION

       

       

    

    Section
3.4.  Compensation.  The
Escrow Agent shall be entitled to compensation for its services as stated in the
fee schedule attached hereto as Exhibit C, which compensation shall be paid by
Neostem. The
fee agreed upon for the services rendered hereunder is intended as full
compensation for the Escrow Agent's services as contemplated by this Escrow
Agreement; provided, however, that in the event that the conditions for the
disbursement of funds under this Escrow Agreement are not fulfilled, or the
Escrow Agent renders any service not contemplated in this Escrow Agreement, or
there is any assignment of interest in the subject matter of this Escrow
Agreement, or any material modification hereof, or if any material controversy
arises hereunder, or the Escrow Agent is made a party to any litigation
pertaining to this Escrow Agreement or the subject matter hereof, then the
Escrow Agent shall be compensated, at a rate determined in good faith by the
Parties, for such extraordinary services and reimbursed for all costs and
expenses, including reasonable attorneys’ fees and expenses, occasioned by any
such delay, controversy, litigation or event.  If any amount due to
the Escrow Agent hereunder is not paid within thirty (30) days of the date due,
the Escrow Agent in its sole discretion may charge interest on such amount up to
the highest rate permitted by applicable law.   The Escrow Agent
shall have, and is hereby granted, a prior lien upon the Escrow Property with
respect to its unpaid fees, non-reimbursed expenses and unsatisfied
indemnification rights, superior to the interests of any other persons or
entities and is hereby granted the right to set off and deduct any unpaid fees,
non-reimbursed expenses and unsatisfied indemnification rights from the Escrow
Property.

    


    Section
3.5.  Disagreements.  If
any conflict, disagreement or dispute arises between, among, or involving any of
the parties hereto concerning the meaning or validity of any provision hereunder
or concerning any other matter relating to this Escrow Agreement, or the Escrow
Agent is in doubt as to the action to be taken hereunder, the Escrow Agent may,
at its option, retain the Escrow Property until the Escrow Agent (i) receives a
final non-appealable order of a court of competent jurisdiction or a final
non-appealable arbitration decision directing delivery of the Escrow Property,
(ii) receives a written agreement executed by each of the parties involved in
such disagreement or dispute directing delivery of the Escrow Property, in which
event the Escrow Agent shall be authorized to disburse the Escrow Property in
accordance with such final court order, arbitration decision, or agreement, or
(iii) files an interpleader action in any court of competent jurisdiction, and
upon the filing thereof, the Escrow Agent shall be relieved of all liability as
to the Escrow Property and shall be entitled to recover attorneys’ fees,
expenses and other costs incurred in commencing and maintaining any such
interpleader action.  The Escrow Agent shall be entitled to act on any
such agreement, court order, or arbitration decision without further question,
inquiry, or consent.

    


    Section
3.6.  Merger
or Consolidation.  Any corporation or association into which
the Escrow Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer all or substantially all of
its corporate trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which the Escrow Agent is a party, shall be
and become the successor escrow agent under this Escrow Agreement and shall have
and succeed to the rights, powers, duties, immunities and privileges as its
predecessor, without the execution or filing of any instrument or paper or the
performance of any further act.

     

    
      
         

      

      
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      EXECUTION VERSION

       

       

    

    Section
3.7.  Attachment of Escrow
Property; Compliance with Legal Orders.  In the event that any
Escrow Property shall be attached, garnished or levied upon by any court order,
or the delivery thereof shall be stayed or enjoined by an order of a court, or
any order, judgment or decree shall be made or entered by any court order
affecting the Escrow Property, the Escrow Agent is hereby expressly authorized,
in its sole discretion, to respond as it deems appropriate or to comply with all
writs, orders or decrees so entered or issued, or which it is advised by legal
counsel of its own choosing is binding upon it, whether with or without
jurisdiction.  In the event that the Escrow Agent obeys or complies
with any such writ, order or decree it shall not be liable to any of the Parties
or to any other person, firm or corporation, should, by reason of such
compliance notwithstanding, such writ, order or decree be subsequently reversed,
modified, annulled, set aside or vacated.

    


    Section
3.8  Force
Majeure.  The Escrow Agent shall not be responsible or liable
for any failure or delay in the performance of its obligation under this Escrow
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fire; flood; wars; acts of terrorism; civil or military
disturbances; sabotage; epidemic; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications services;
accidents; labor disputes; acts of civil or military authority or governmental
action; it being understood that the Escrow Agent shall use commercially
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as reasonably practicable under the
circumstances.

    


    ARTICLE
4

    MISCELLANEOUS

    


    Section
4.1.  Successors and
Assigns.  This Escrow Agreement shall be binding on and inure
to the benefit of the Parties and the Escrow Agent and their respective
successors and permitted assigns. No other persons shall have any rights under
this Escrow Agreement.  No assignment of the interest of any of the
Parties shall be binding unless and until written notice of such assignment
shall be delivered to the other Party and the Escrow Agent and shall require the
prior written consent of the other Party and the Escrow Agent
(such consent not to be unreasonably withheld).

    


    Section
4.2.  Escheat.  The
Parties are aware that under applicable state law, property which is presumed
abandoned may under certain circumstances escheat to the applicable
state.  The Escrow Agent shall have no liability to the Parties, their
respective heirs, legal representatives, successors and assigns, or any other
party, should any or all of the Escrow Property escheat by operation of
law.

     

    
      
         

      

      
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    EXECUTION
VERSION

     

     

    Section
4.3.  Notices.  All
notices, requests, demands, and other communications required under this Escrow
Agreement shall be in writing, in English, and shall be deemed to have been duly
given if delivered (i) personally, (ii) by facsimile transmission with written
confirmation of receipt, (iii) by overnight delivery with a reputable national
overnight delivery service, or (iv) by mail or by certified mail, return receipt
requested, and postage prepaid.  If any notice is mailed, it shall be
deemed given five business days after the date such notice is deposited in the
United States mail.  If notice is given to a party, it shall be given
at the address for such party set forth below.  It shall be the
responsibility of the Parties to notify the Escrow Agent and the other Party in
writing of any name or address changes.  In the case of communications
delivered to the Escrow Agent, such communications shall be deemed to have been
given on the date received by the Escrow Agent.

    


    If to the
Agent:

    JGB
Management Inc.

    400
Madison Avenue

    Suite
8D

    New York,
New York 10017

    Attention:
Brett Cohen

    Telephone:
212-355-5771

    Facsimile:
212-253-4093

    


    If to
Neostem:

    


    Neostem,
Inc.

    420
Lexington Avenue

    Suite
450

    New York,
New York 10170

    Attention:
General Counsel

    Telephone
No.: 212-584-4180

    Facsimile
No.: 646-514-7787

    E-mail:
cvaczy@neostem.com

    


    If to the
Escrow Agent:

    


    Wells
Fargo Bank, National Association

    45
Broadway, 14th
Floor

    New York,
NY 10006

    Attention:
Matthew Sherman; Corporate, Municipal and Escrow Solutions

    Telephone:
(212) 515-1573

    Facsimile:
(212) 509-1716

    


    Section
4.4.  Governing
Law.  This Escrow Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.

    


    Section
4.5.  Entire
Agreement.  This Escrow Agreement sets forth the entire
agreement and understanding of the parties related to the Escrow
Property.

     

    
      
         

      

      
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      EXECUTION VERSION

       

       

    

    Section
4.6.  Amendment.  This
Escrow Agreement may be amended, modified, superseded, rescinded, or canceled
only by a written instrument executed by the Parties and the Escrow
Agent.

    


    Section
4.7.  Waivers.  The
failure of any party to this Escrow Agreement at any time or times to require
performance of any provision under this Escrow Agreement shall in no manner
affect the right at a later time to enforce the same performance.  A
waiver by any party to this Escrow Agreement of any such condition or breach of
any term, covenant, representation, or warranty contained in this Escrow
Agreement, in any one or more instances, shall neither be construed as a further
or continuing waiver of any such condition or breach nor a waiver of any other
condition or breach of any other term, covenant, representation, or warranty
contained in this Escrow Agreement.

    


    Section
4.8.  Headings.  Section
headings of this Escrow Agreement have been inserted for convenience of
reference only and shall in no way restrict or otherwise modify any of the terms
or provisions of this Escrow Agreement.

    


    Section
4.9.  Counterparts.  This
Escrow Agreement may be executed in one or more counterparts, each of which when
executed shall be deemed to be an original, and such counterparts shall together
constitute one and the same instrument.

    


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      EXECUTION VERSION

       

       

    

    IN
WITNESS WHEREOF, this Escrow Agreement has been duly executed as of the date
first written above.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  NEOSTEM
      INC.

                                
	 
      	 
      
	 
      	
                                  By:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Name:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Title:

                                	 
      
	 
      	 
      
	 
      	
                                  JGB
      MANAGEMENT INC., as Agent for the Purchasers

                                
	 
      	 
      
	 
      	
                                  By:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Name:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Title:

                                	 
      
	 
      	 
      
	 
      	
                                  WELLS
      FARGO BANK, NATIONAL ASSOCIATION, as Escrow Agent

                                
	 
      	 
      
	 
      	
                                  By:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Name:

                                	 
      
	 
      	 
      	 
      
	 
      	
                                  Title:

                                	 
      


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
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      EXECUTION VERSION

       

    

    EXHIBIT
A

    


    Agency
and Custody Account Direction

    For
Cash Balances

    Wells
Fargo Money Market Deposit Accounts

    


    Direction
to use the following Wells Fargo Money Market Deposit Accounts for Cash Balances
for the escrow account or accounts (the “Account”) established under the Escrow
Agreement to which this Exhibit A is attached.

    


    You are
hereby directed to deposit, as indicated below, or as we shall direct further in
writing from time to time, all cash in the Account in the following money market
deposit account of Wells Fargo Bank, National Association:

    


    Wells
Fargo Money Market Deposit Account (MMDA)

    


    We
understand that amounts on deposit in the MMDA are insured, subject to the
applicable rules and regulations of the Federal Deposit Insurance Corporation
(FDIC), in the basic FDIC insurance amount of $100,000 per depositor, per
insured bank. This includes principal and accrued interest up to a total of
$100,000.  Note:  On May 20, 2009,
FDIC deposit insurance temporarily increased from $100,000 to $250,000 per
depositor through December 31, 2013.

    


    We
acknowledge that we have full power to direct investments of the
Account.

    


    We
understand that we may change this direction at any time and that it shall
continue in effect until revoked or modified by us by joint written notice to
you.

    


    
      
        
          
            
              	 
      	 
      	 
      	 
      
	
                      Authorized
      Representative

                    	 
      	
                      Authorized
      Representative

                    	 
      
	
                      Neostem
      Inc.

                    	 
      	
                      JGB
      Management Inc, as Agent

                    	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                      Date

                    	
                        

                    	
                      Date

                    	 
      


            

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

             

          

        

      

    

    
      EXECUTION VERSION

       

       

    

    EXHIBIT
B-1

    


    Certificate
as to Authorized Signatures

     

    The
specimen signatures shown below are the specimen signatures of the individuals
who have been designated as authorized representatives of Neostem Inc. and are
authorized to initiate and approve transactions of all types for the escrow
account or accounts established under the Escrow Agreement to which this Exhibit
B-1 is attached, on behalf of Neostem Inc.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              Name
      / Title

                                            	 
      	
                                              Specimen
      Signature

                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Name

                                            	 
      	
                                              Signature

                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Title

                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Name

                                            	 
      	
                                              Signature

                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Title

                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Name

                                            	 
      	
                                              Signature

                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Title

                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Name

                                            	 
      	
                                              Signature

                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                              Title

                                            	
                                                

                                            	 
      


                                    

                                     

                                    
                                      
                                         

                                      

                                      
                                         

                                        
                                          

                                        

                                      

                                      
                                         

                                      

                                    

                                     

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      EXECUTION VERSION

       

       

    

    EXHIBIT
B-2

    


    Certificate
as to Authorized Signatures

     

    The
specimen signatures shown below are the specimen signatures of the individuals
who have been designated as authorized representatives of the Agent and are
authorized to initiate and approve transactions of all types for the escrow
account or accounts established under the Escrow Agreement to which this Exhibit
B-2 is attached, on behalf of the Agent.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Name
      / Title

                                      	 
      	
                                        Specimen
      Signature

                                      
	 
      	 
      	 
      
	 	 	 
	
                                        Name

                                      	 
      	
                                        Signature

                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Title

                                      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Name

                                      	 
      	
                                        Signature

                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Title

                                      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Name

                                      	 
      	
                                        Signature

                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Title

                                      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Name

                                      	 
      	
                                        Signature

                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                        Title

                                      	
                                          

                                      	 
      


                              

                               

                              
                                
                                   

                                

                                
                                   

                                  
                                    

                                  

                                

                                
                                   

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      EXECUTION VERSION

       

      EXHIBIT
C

    

    


    FEES
OF ESCROW AGENT