Document:

COLLATERAL AGENT AGREEMENT

This Collateral Agent Agreement (this “Agreement”) is made as of the 12th day of December, 2011, by and among David A. Loppert, as the collateral agent (the “Collateral Agent”), and the secured noteholders of rVue Holdings, Inc., a Nevada corporation (the “Company”), identified on Schedule A hereto (the “Noteholders”).

RECITALS

WHEREAS, the Noteholders have purchased secured convertible promissory notes from the Company (the “Notes”) in connection with the Company’s offering of up to Two Million Dollars ($2,000,000) in secured convertible promissory notes dated as of the date hereof by and among the Company and the Noteholders (the “Purchase Agreement”);

WHEREAS, as a condition to the purchase of the Notes and as security for the performance by the Company of its obligations under the Notes, the Company, the Collateral Agent and the Noteholders have entered into a Security Agreement dated as of the date hereof (the “Security Agreement”) whereby the Company agreed to grant a security interest in the Collateral (as defined in the Security Agreement) in favor of the Noteholders; and

WHEREAS, in order to provide for the orderly administration of such Collateral, the Noteholders have appointed the Collateral Agent to act on the Noteholders’ behalf with respect to the Collateral, and the Collateral Agent has agreed to accept such appointment, upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Appointment of the Collateral Agent. The Noteholders hereby appoint the Collateral Agent (and the Collateral Agent hereby accepts such appointment) to take any action including, without limitation, the registration of any Collateral in the name of the Collateral Agent or its nominees upon and during the continuance of an Event of Default (as defined in the Security Agreement), the exercise of voting rights, if any, upon the occurrence and during the continuance of an Event of Default, the application of any cash Collateral received by the Collateral Agent to the payment of the Obligations, the making of any demand under the Security Agreement, the exercise of any remedies given to the Collateral Agent pursuant to the Security Agreement and the exercise of any authority pursuant to the appointment of the Collateral Agent as an attorney-in-fact of the Company pursuant to the Security Agreement that the Collateral Agent deems necessary or proper for the administration of the Collateral.  Upon disposition of the Collateral in accordance with the Security Agreement, the Collateral Agent shall promptly distribute any cash or Collateral in accordance with the Security Agreement.  The Collateral Agent will not be required to act hereunder in connection with the Notes, other than as specified in this Agreement and the Security Agreement.

 

  

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2.           Collateral. The Collateral Agent hereby acknowledges that any Collateral held by the Collateral Agent is held for the benefit of the Noteholders in accordance with this Agreement and the Security Agreement. The Collateral Agent is to distribute any proceeds received from the Collateral, which are distributable to the Noteholders in proportion to their respective interests in the Obligations as defined in the Security Agreement, in accordance with the Security Agreement.

3.           Action by the Majority in Interest.

(a)         Certain Actions.  Each of the Noteholders hereby covenants and agrees that only a “Majority in Interest” (as hereinafter defined) shall have the right, but not the obligation, to undertake the following actions (it being expressly understood that less than a Majority in Interest hereby expressly waive the following rights that they may otherwise have under the Notes or the Security Agreement):

(i)           Acceleration.  If an Event of Default occurs, after the applicable cure period, if any, a Majority in Interest may, on behalf of all of the Noteholders, instruct the Collateral Agent to provide to the Company notice to cure such default and/or declare the unpaid principal amount of the Notes to be due and payable, together with any and all accrued interest thereon and all costs payable pursuant to such Notes;

(ii)          Enforcement.  Upon the occurrence of any Event of Default after the applicable cure period, if any, a Majority in Interest may instruct the Collateral Agent to proceed to protect, exercise and enforce, on behalf of all of the Noteholders, their rights and remedies under the Security Agreement against the Company, and such other rights and remedies as are provided by law or equity; and

(iii)         Waiver of Past Defaults.  A Majority in Interest may instruct the Collateral Agent to waive any Event of Default by written notice to the Company, and the other Noteholders, but not waive damages or default interest accrued until the effective date of such waiver.

(b)         Permitted Subordination.  A Majority in Interest may instruct the Collateral Agent to agree to subordinate any Collateral to any claim and may enter into any agreement with the Company to evidence such subordination; provided, however, that subsequent to any such subordination, each Note shall remain pari passu with the other Notes held by the Noteholders.

(c)         Further Actions.  A Majority in Interest may instruct the Collateral Agent to take any action that it may take under this Agreement by instructing the Collateral Agent in writing to take such action on behalf of all of the Noteholders.

(d)         Majority in Interest.  For so long as any obligations remain outstanding on the Notes, “Majority in Interest” for the purposes of this Agreement shall mean the Noteholders who hold more than fifty percent (50%) of the aggregate outstanding principal amount of the Notes at the time that a particular event occurs.

 

  

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4.           Power of Attorney.

(a)           To effectuate the terms and provisions hereof, the Noteholders hereby appoint the Collateral Agent as their attorney-in-fact (and the Collateral Agent hereby accepts such appointment) for the purpose of carrying out the provisions of this Agreement including, without limitation, taking any action on behalf of, or at the instruction of, the Majority in Interest at the written direction of the Majority in Interest and executing any consent authorized pursuant to this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable (and lawful) to accomplish the purposes hereof.

(b)           All acts done under the foregoing authorization are hereby ratified and approved and neither the Collateral Agent nor any designee nor agent thereof shall be liable for any acts of commission or omission, for any error of judgment, for any mistake of fact or law except for acts of gross negligence or willful or wanton misconduct.

(c)           This power of attorney, being coupled with an interest, is irrevocable while the Security Agreement remains in effect.

5.           Expenses of the Collateral Agent.  The Noteholders shall pay any and all reasonable costs and expenses incurred by the Collateral Agent, including, without limitation, reasonable costs and expenses relating to all waivers, releases, discharges, satisfactions, modifications and amendments of this Agreement, the administration and holding of the Collateral, insurance expenses, and the enforcement, protection and adjudication of the parties' rights hereunder by the Collateral Agent, including, without limitation, the reasonable disbursements, expenses and fees of the attorneys the Collateral Agent may retain, if any, in proportion to their holdings of the Notes.

6.           Reliance on Documents and Experts.  The Collateral Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, statement, paper, document, writing or communication (which may be by telegram, cable, telex, telecopier, email, or telephone) reasonably believed by it to be genuine and to have been signed, sent or made by the proper person or persons, and upon opinions and advice of its own legal counsel, independent public accountants and other experts selected by the Collateral Agent.

7.           Duties of the Collateral Agent; Standard of Care.

(a)           The Collateral Agent's duties are those expressly set forth in this Agreement and the Security Agreement, and the Collateral Agent hereby is authorized to perform those duties in accordance with commercially reasonable practices.  The Collateral Agent may exercise or otherwise enforce any of its rights, powers, privileges, remedies and interests under this Agreement, the Security Agreement and applicable law or perform any of its duties under this Agreement and the Security Agreement by or through its attorneys, advisors or agents.

(b)           The Collateral Agent shall act in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances.

 

  

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(c)           Any funds held by the Collateral Agent hereunder need not be segregated from other funds except to the extent required by law.  The Collateral Agent shall be under no liability for interest on any funds received by it hereunder.

8.           Resignation.  The Collateral Agent may resign and be discharged of its duties hereunder at any time by giving written notice of such resignation to the other parties hereto, stating the date such resignation is to take effect.  Within thirty (30) days of the giving of such notice, a successor collateral agent shall be appointed by the Majority in Interest; provided, however, that if the Noteholders are unable to agree upon a successor within such time period, and notify the Collateral Agent during such period of the inability of the Noteholders to appoint a successor collateral agent, the successor collateral agent may be a person designated by the Collateral Agent, and any and all fees of such successor collateral agent shall be the joint and several obligation of the Noteholders.  The Collateral Agent shall continue to serve until the effective date of the resignation or until his successor accepts the appointment and receives the Collateral held by the Collateral Agent but shall not be obligated to take any action hereunder during such period.

9.           Exculpation.  The Collateral Agent and his attorneys, advisors and agents, shall not incur any liability whatsoever for the holding or delivering documents or for taking any other action in accordance with the terms and provisions of this Agreement, for any mistake or error in judgment, for compliance with any applicable law or any attachment, order or other directive of any court or other authority (irrespective of any conflicting term or provision of this Agreement), or for any act or omission of any other person engaged by the Collateral Agent in connection with this Agreement, unless occasioned by the exculpated person’s own gross negligence or willful or wanton misconduct; and each party hereto hereby waives any and all claims and actions whatsoever against the Collateral Agent and its officers, employees, attorneys and agents, arising out of or related directly or indirectly to any or all of the foregoing acts, omissions and circumstances.

10.         Indemnification.  The Noteholders hereby agree to indemnify, reimburse and hold harmless the Collateral Agent and his attorneys, advisors and agents, in proportion to their holdings of the Notes, from and against any and all claims, liabilities, losses and expenses that may be imposed upon, incurred by, or asserted against any of them, arising out of or related directly or indirectly to this Agreement or the Collateral, except such as are occasioned by the indemnified person’s own gross negligence or willful or wanton misconduct.

11.         Notices.  All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing (including telex, telecopy and telegraphic communication) and shall be (as elected by the person giving such notice) hand delivered by messenger or courier service (including overnight courier such as Fed Ex), telecommunicated, or mailed (airmail if international) by registered or certified mail (postage prepaid), return receipt requested, addressed to the parties as specified below:

As to the Collateral Agent:                              David A. Loppert

100 N.E. 3rd Avenue, Suite 200

 

  

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Fort Lauderdale, Florida 33301

Fax: (954) 525-4245

As to the Noteholders, to the address provided on the counterpart signature page executed by each Noteholder, or to such other address as any party may designate by notice complying with the terms of this Section 11.

Each such notice shall be deemed delivered:  (a) on the date delivered if by personal delivery; (b) on the date of confirmed transmission if by telex, telecopy or other telegraphic communication; and (c) on the date upon which the return receipt is signed or delivery is refused or the notice if designated by the postal authorities as not deliverable, as the case may be, if mailed.

12.         Waivers. No act, omission or delay by the Collateral Agent shall constitute a waiver of the Collateral Agent's rights and remedies hereunder or otherwise.  No single or partial waiver by the Collateral Agent of any default hereunder or right or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.

13.         Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.  The Collateral Agent and the Noteholders hereby irrevocably consent to the jurisdiction of the United States District Court for the Southern District of Florida and any Florida state court sitting in Palm Beach County, Florida in any action or proceeding arising out of or relating to this Agreement, and hereby irrevocably agree that all claims and disputes arising out of or relating to this Agreement may be heard and determined in such state court or, to the extent permitted by law, in such federal court.  The Collateral Agent and the Noteholders hereby irrevocably waive, and hereby acknowledge that they are estopped from raising, the claims or defenses of lack of personal jurisdiction, improper venue or inconvenient forum to the maintenance of any such action or proceeding.

14.      WAIVER OF JURY TRIAL. THE COLLATERAL AGENT AND THE NOTEHOLDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER THE COLLATERAL AGENT OR THE NOTEHOLDERS.

15.     Successors and Assigns.  Whenever in this Agreement reference is made to any party, such reference shall be deemed to include the successors, assigns, heirs and legal representatives of such party.  No party hereto may transfer any rights under this Agreement, unless the transferee agrees to be bound by, and comply with all of the terms and provisions of this Agreement, as if an original signatory hereto on the date hereof.

 

  

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16.         Severability.  If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction.

17.         Enumeration and Headings.  The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

18.         Entire Agreement.  This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, relating to said subject matter.

19.         Amendment.  This Agreement may not be amended or modified in any manner except by a written agreement executed by the Collateral Agent and the Majority in Interest.

20.         Joinder.  Additional parties who acquire Notes may be added to this Agreement by execution and delivery of a counterpart signature page by such new party and the Collateral Agent.  The execution and delivery of such signature page and the revision of Schedule A in connection therewith shall not constitute an amendment or waiver under this Agreement.  Such parties will constitute Noteholders under this Agreement.

21.         Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. This Agreement may be executed by facsimile or other electronic signatures.

[Signatures on Next Page]

 

  

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IN WITNESS WHEREOF, this Collateral Agent Agreement has been executed by the parties hereto all as of the day and year first above written.

 

	  	
COLLATERAL AGENT:

	  	  
	  	  
	  	
David A. Loppert

	  	  
	  	
NOTEHOLDERS:

	  	  
	  	
[See attached Counterpart Signature Pages]

 

  

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COUNTERPART SIGNATURE PAGE

TO COLLATERAL AGENT AGREEMENT

by and among

 David A. Loppert, as collateral agent,

and

the Noteholders who execute this

Counterpart Signature Page

By execution of this Counterpart Signature Page, the undersigned hereby agrees to become a party to the Collateral Agent Agreement, and the undersigned shall be a “Noteholder” under the Collateral Agent Agreement.

	
[Individuals]

	 	
[Entities]

	  	 	  
	  	 	  
	
Signature

	 	
Name of Entity

	  	 	  
	  	 	
By:

	  
	
Name:

	  	 	

Name:

	  
	  	 	
Title:

	  

 

  

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Schedule A will be provided to the Commission upon requestJoint Venture Investment Agreement of

Harbin Tian Xin Biological Engineering Co., Ltd.

	
  

	
1.

	
GENERAL PROVISIONS

	
  

	
2.

	
NATURE OF THE COMPANY AND BUSINESS SCOPE

	
  

	
3.

	
REGISTERED CAPITAL AND SUBSCRIPTION

	
  

	
4.

	
CLAIMS, REPRESENTATIONS AND WARRANTS

	
  

	
5.

	
TRANSFER OF STOCK

	
  

	
6.

	
PROHIBITIONS

	
  

	
7.

	
RELATED PARTY TRANSACTIONS

	
  

	
8.

	
BOARD OF DIRECTORS

	
  

	
9.

	
BOARD OF SUPERVISORS

	
  

	
10.

	
BUSINESS MANAGEMENT ORGANIZATION

	
  

	
11.

	
TAX, ACCOUNTING, AUDITOR AND LABOR MANAGEMENT

	
  

	
12.

	
LIABILITIES OF BREACH

	
  

	
13.

	
GOVERNING LAW

	
  

	
14.

	
DISPUTE RESOLUTION

	
  

	
15.

	
MISCELLANEOUS

	
1.

	
GENERAL PROVISIONS

 

Party A: The Fourth Hospital of Harbin Medical University

Party B: Harbin Tian Di Ren Pharmaceutical Technology Co., Ltd.

Party C: Harbin Zheng Yuan Construction Group

Party D: Xiaowei Zhang (representative of individual investors)

Party A is specialized in stem cell clinical application technology with rich stem cell technology resources, human resources and advanced lab equipments. Party B is a pharmaceutical technology enterprise with extensive experience of stem cell technology development and enterprise management, market development ability and solid capital support. Party C is a comprehensive investment company with solid capital support. Party D is representative of several individual investors with cash investments. The four Parties agree to establish Harbin Tian Xin Biological Engineering Co., Ltd. as a joint venture (herein after referred as “Joint Venture”).

 

  

  

  

 

THEREFORE, the Parties enter into the agreement as follows on the principal of equality and mutual benefit and friendly negotiation according to the PRC Law of Company, PRC Law of Contracts and other related laws and regulations:

	
2.

	
NATURE OF THE COMPANY AND BUSINESS SCOPE

 

	
  

	
2.1.

	
The nature of the Joint Venture: limited liability company

	
  

	
2.2.

	
Registered location: the Administration of Industrial and Commerce (AIC) of Harbin High and New Technology Zone

Company domicile: Area B of Harbin High and New Technology Zone

	
  

	
2.3.

	
Operation purpose: utilizing advanced and practical technology to optimize the capital, technology, management and marketing resource to achieve the economical and social effect satisfied by all the Parties.

	
  

	
2.4.

	
Business scope: the collection, preservation and clinical industrialized development of umbilical cord blood stem cell, umbilical cord mesenchymal stem cells, bone marrow stem cells and other stem cells.

	
3.

	
REGISTERED CAPITAL AND SUBSCRIPTION

 

	
  

	
3.1.

	
The investment method and subscription amount of the Parties are as follows:

	
  

	
3.1.1.

	
Party A subscribes 9% of the Joint Venture’s registered capital, equivalent to20 million RMB in the form of the stem cells technology, stem cells clinical resources, lab R&D fixed assets and equipments.

	
  

	
3.1.2.

	
Party B subscribes 39% of the Joint Venture’s registered capital, equivalent to90 million RMB in the form of cash.

	
  

	
3.1.3.

	
Party C subscribes 9% of the Joint Venture’s registered capital, equivalent to20 million RMB in the form of cash.

	
  

	
3.1.4.

	
Party D subscribes 43% of the Joint Venture’s registered capital, equivalent to100 million RMB in the form of cash.

	
  

	
3.2.

	
The Parties shall pay 65% of the registered capital subscribed within 15 days upon the execution of this Agreement and the rest 35% of the subscribed registered capital shall be paid within 6 months after the initial payment. The Company shall issue Capital Contribution Certificates to each Party after the Company beginning the operation.

	
4.

	
CLAIMS, REPRESENTATIONS AND WARRANTS

 

	
  

	
4.1.

	
Claims, representations and warrants

	
  

	
4.1.1.

	
Abide by the articles of association of the Company;

	
  

	
4.1.2.

	
Paid the subscribed registered capital in the amount and method specified;

 

  

  

  

 

	
  

	
4.1.3.

	
     The representatives of all the Parties shall strictly keep the trade and technological secrets and refrain from engaging the same or similar business with other companies or assign or disclose the Company’s technological project to any third party;

	
  

	
4.1.4.

	
     Make sure that the capital will be paid in full on time and actively assist the Company with the registration with local AIC authorities;

	
  

	
4.1.5.

	
     Receiving dividends or profit sharing according to the ownership proportion;

	
  

	
4.1.6.

	
     Vote according to the ownership proportion;

	
  

	
4.1.7.

	
     Supervise the Company’s business activities and make suggestions or inquiries;

	
  

	
4.1.8.

	
     Transfer, grant or pledge the stocks according to the laws, regulations and the articles of associations of the Company;

	
  

	
4.1.9.

	
     Participate the distribution of the remaining assets of the Company according to the ownership proportion during the termination or liquidation of the Company;

	 	
4.1.10.

	
 Other rights and obligations prescribed in laws, regulations and articles of associations of the Company

	
  

	
4.2.

	
Special rights and obligations of the four Parties:

The four Parties promise that they will cooperate with each other and support the board of directors’ decision of the Joint Venture to integrate and develop the related industries.

	
5.

	
TRANSFER OF STOCKS

 

	
  

	
5.1.

	
The transfer of stocks by the directors, supervisors, manager or other senior managements during their tenure of office or within 6 months upon the termination of the office shall be approved by the board of directors.

	
  

	
5.2.

	
Transfer of all or partial stocks to any party other than the shareholders shall be approved by the majority of the shareholders. The shareholder who is against the transfer shall purchase the stock.

	
  

	
5.3.

	
When any shareholder transfers the stocks to any party other than the shareholders, other shareholders shall have preemptive right.

	
  

	
5.4.

	
Transfer of stocks among the shareholders shall be approved by the board of directors.

	
6.

	
PROHIBITIONS

 

	
  

	
6.1.

	
Any shareholder shall refrain from any activities harmful to the Company’s benefit in his personal or in the Company’s name; otherwise, all the proceeds obtained from such activities shall be submitted to the Company and the shareholder shall indemnify the Company for all the damages according to the related laws.

	
  

	
6.2.

	
All the shareholders shall refrain from operating or engaging the business which is competitive to the Company’s business.

	
  

	
6.3.

	
The shareholder who makes the investment with the technology shall not invest such technology to any third party.

 

  

  

  

 

	
  

	
6.4.

	
The shareholder who makes the investment with the technology shall not establish or partner with others to operate the similar or same business as that of the Company’s.

	
  

	
6.5.

	
The shareholder who makes the investment with the technology shall not threat the Company with its technology secrets and advantages.

	
  

	
6.6.

	
The shareholder shall be liable for the indemnification of all the Company’s loss for breach of any of the above provisions. Subject to the discussion of the board of directors, the ownership proportion of the shareholder who is engaging a serious violation may be decreased and the differences shall be used to compensate the damages of other shareholders.

	
7.

	
RELATED PARTY TRANSACTIONS

 

The Company shall regulate all the related party transactions and each related party transaction shall be reported to and unanimously approved by the board of directors before execution. Any party who has an interest in the transaction under discussion shall abstain from discussion on the approval of the related party transaction.

	
8.

	
BOARD OF DIRECTORS

 

	
  

	
8.1.

	
The board of directors shall consist of five directors elected by the shareholders’ meeting, of whom, one candidate shall be proposed by Party B, one candidate shall be proposed by Party C, one candidate shall be proposed by Party A and 2 candidates shall be proposed by Party D.

	
  

	
8.2.

	
The Company shall have one chairman, who shall be appointed by Party B, and one vice chairman, who shall be elected by the board of directors.

	
  

	
8.3.

	
Board of directors shall have the right to:

	
  

	
8.3.1.

	
Call for a shareholders meeting and report their work to the shareholders meeting;

	
  

	
8.3.2.

	
Execute the resolution of shareholders meeting;

	
  

	
8.3.3.

	
Decide the Company’s operation plan and investment proposal;

	
  

	
8.3.4.

	
Formulate the Company’s annual financial forecast and annual audit proposal;

	
  

	
8.3.5.

	
Formulate the Company’s profit sharing and loss recovery proposal;

	
  

	
8.3.6.

	
Formulate the proposal to increase or decrease registered capital, bond issuance or other securities or listing related proposals;

	
  

	
8.3.7.

	
Propose for the plan of major acquisition, merger, separation or dissolution;

	
  

	
8.3.8.

	
Subject to the authorization of the shareholders meeting, decide the risk investment, asset mortgage or other guarantee related matters;

	
  

	
8.3.9.

	
Hire or dismiss the manager or the secretary of the board of directors; hire or dismiss the deputy manager, the person in charge of finance or other senior management and decide their remuneration, award and punishment;

	
  

	
8.3.10.

	
Propose amendments to the Company’s articles of association;

	
  

	
8.3.11.

	
Listen to the report of managers and supervise manager’s work;

	
  

	
8.3.12.

	
Other rights authorized by the laws, regulations and the Company’s articles of associations.

 

  

  

  

 

	
  

	
8.4.

	
The board of directors shall explain the auditor’s report with reservations issued by the certified accountant firm to the shareholders meeting.

	
  

	
8.5.

	
The board of directors shall promulgate its policies to make sure the efficiency and reasonable decision.

	
  

	
8.6.

	
The board of directors shall decide the maximum authority of the general manager for the investment with the Company’s assets and establish a strict review and decision process; for major investment projects, the board of directors shall organize the experts of related department and professionals to review and then submit to the shareholders meeting for approval.

	
9.

	
BOARD OF SUPERVISORS

 

	
  

	
9.1.

	
The Company shall have a board of supervisors, which shall consist of three supervisors, of whom, one candidate shall be proposed by Party A, one candidate shall be proposed by Party B and 1 candidate shall be proposed by Party D. The board of supervisor shall have a convocator recommended by Party D. When the convocator cannot perform his duty, the convocator shall appoint another supervisor to perform his duty.

	
  

	
9.2.

	
The board of supervisors shall have the right to:

	
  

	
9.2.1.

	
Inspect the Company’s financial status;

	
  

	
9.2.2.

	
Supervise the directors, officers and other senior managements’ activities which violates the laws, regulations or the Company’s Articles of Associations when perform their duties;

	
  

	
9.2.3.

	
Request the directors, officers and other senior managements to correct their misbehavior which is harmful to the Company’s interest and report to the shareholders meeting or the competent authority if necessary;

	
  

	
9.2.4.

	
Propose the interim shareholders meeting;

	
  

	
9.2.5.

	
Attend the board of directors’ meeting as an observer;

	
  

	
9.2.6.

	
Other authorities granted by the Company’s articles of association or the shareholders meeting.

	
10.

	
BUSINESS MANAGEMENT ORGANIZATION

 

	 	
10.1.

	
               The Company shall have the business management organization to in charge of the daily business operation and management. The business management organization shall have one general manager, who shall be appointed by Party B, and two deputy managers, of whom, one shall be recommended by Party D and one shall be appointed by Party A. Party C shall appoint the Chief Financial Officer. The general manager, deputy managers shall be hired by the board of directors and the term of the office shall be three years.

	 	
10.2.

	
               The general manager shall be responsible to the board of directors and shall have the following rights according to the PRC Law of Company and the Company’s articles of association:

	 	
10.2.1.

	
Lead the production and business management of the Company and execute the resolution of the board of directors;

	 	
10.2.2.

	
The Company’s annual plan and investment plan;

	 	
10.2.3.

	
Formulate the setup of the Company’s internal management organizations

 

  

  

  

 

	 	
10.2.4.

	
    Formulate the Company’s basic management policies;

	 	
10.2.5.

	
    Formulate the Company’s specific rules;

	 	
10.2.6.

	
    Propose the board of director to hire or dismiss the deputy manager or the person in charge of finance;

	 	
10.2.7.

	
    Hire or dismiss the management employees other than those who shall be hired or dismissed by the board of directors;

	 	
10.2.8.

	
    Other authorities grant by the Company’s articles of association or the board of directors.

	 	
10.3.

	
               The deputy manager shall assist the general manager.

	 	
10.4.

	
               In the event of corruption or gross negligence, the general manager, deputy managers or other senor managements can be dismissed upon the resolution of board of directors at any time.

	
11.

	
TAX, ACCOUNTING, AUDITOR AND LABOR MANAGEMENT

 

	 	
11.1.

	
               The company shall pay various taxes according to the related laws and regulations.

	 	
11.2.

	
               The fiscal year of the Company shall begin on January 1st and end on December 31st of each year.

	 	
11.3.

	
               The Company shall establish the accounting system according to the related PRC accounting regulations.

	 	
11.4.

	
               The Company shall make the monthly financial statements within 10 days after the end of each month and send out copies to each shareholder and directors.  The Company shall make the annual financial statements within 30 days after the end of each year and send out copies to each shareholder and directors. The annual financial statements shall be audited by the certified accounting firms and proved to be authentic and accurate. The general manager shall organize the financial department to make last year’s balance sheet, profit and loss statements and profit distribution plan and submit for the board of directors’ review during the first 3 months at the beginning of each fiscal year.

	 	
11.5.

	
               Each shareholder has the right to send an accounting firm to inspect the Company’s operating account and record within 3 months after the end of each fiscal year. The shareholder shall be responsible for the related fee.

	 	
11.6.

	
               The hiring, dismissing, salary, warfare, award and other matters of the employees shall be governed by the employment agreements entered into between the Company and the employees, individually or collectively, under the proposal of board of directors according to related national regulations and implementation rules. The employment agreement shall be file for record with the local labor authorities upon execution.

	
12.

	
LIABILITIES OF BREACH

 

	 	
12.1.

	
                The shareholder invested with cash: if any shareholder fails to timely make the payment in full according the related provisions under this Agreement, the breaching party shall pay a penalty equivalent to 5% of the outstanding subscribed registered capital to other Parties for each month overdue commencing from the first month overdue. If the breaching party fails to make the overdue payment for more than 3 months, other Parties shall have the right to terminate this Agreement and claim for indemnification in addition to a penalty equivalent to 15% of the outstanding subscribed registered capital from the breaching party.

 

  

  

  

 

	 	
12.2.

	
                Technology provider: during the contract period, if any party finds the breach of the technology provider, other shareholders shall have the right to require the technology provider to stop the breach activity immediately and pay a penalty equivalent to 15% of the subscribed registered capital owned by the breaching party to the non-defaulting parties.

	 	
12.3.

	
                If this Agreement cannot be performed or cannot be fully performed due to the fault attributable to one party, the default party shall be responsible for the liabilities; if the fault can be attributable to various parties, each party shall be responsible for the corresponding liabilities.

	
13.

	
GOVERNING LAW

 

The entry, effect, interpretation, performance and dispute resolution of this Agreement shall be governed by the laws of People’s Republic of China.

	
14.

	
DISPUTE RESOLUTION

 

All the disputes arising during the performing of this Agreement or arising from the Agreement shall be resolved through friendly negotiation; if the negotiation fails, each shareholder may submit the dispute to the court of their own domicile for litigation (or apply for arbitration) according to the related laws.

	
15.

	
MISCELLANEOUS

 

	 	
15.1.

	
                All the four Parties agree to cancel the registration of the Company if the Company suffers loss or fails to distribute the minimum dividends for consecutive 3 years.

 

	 	
15.2.

	
                This Agreement shall be effective upon the execution of each Party with their official seal of the legal person.

 

	 	
15.3.

	
                This Agreement is octuplicated. Each Party holds one copy and four copies file for related procedures. Each copy has the same legal effect.

Party A: The Fourth Hospital of Harbin Medical University (official seal)

Signature of legal representative: Baozhong Shen

Party B: Harbin Tian Di Ren Pharmaceutical Technology Co., Ltd. (official seal)

Signature of legal representative: Yanqing Liu

Party C: Harbin Zheng Yuan Construction Group (official seal)

Signature of legal representative: Youqing Jiang

 

  

  

  

 

Party D: Xiaowei Zhang (representative of individual investors)

Signature of the representative: Xiaowei Zhang

Date: December13, 2011

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]