Document:

Unassociated Document

    [*Confidential
Treatment has been requested as to certain portions of this
document.  Each such portion, which has been omitted herein and
replaced with an asterisk [*], has been filed separately with the Securities and
Exchange Commission.]

     

    AGREEMENT

     

    This
Agreement (together with all attachments and as amended and modified from time
to time, the “Agreement”) dated as of 31st day of
December, 2009 (the “Effective Date”) is between PROGENITOR CELL THERAPY, LLC, a
Delaware limited liability company having its principal office at 4 Pearl Court,
Suite C, Allendale, New Jersey 07401 ("PCT"), NEOSTEM, INC., a Delaware
corporation (“NeoStem”) having its principal office at 420 Lexington Avenue,
Suite 450, New York City, New York 10017 and NEOSTEM (CHINA), INC., a Chinese
domestic corporation having an office at Room 0425A, Building C, No. 6,
XiangGangZhong Road, Shinan District, Qingdao City, The People’s Republic of
China (“NeoStem China”, and together with NeoStem, jointly and severally, the
“Client”).

     

    WHEREAS,
NeoStem previously requested PCT to develop a conceptual architectural design,
cost estimate and timeline for the phased construction, development and
installation of a cell therapy research and manufacturing facility at the Life
Science Innovation Center, Life Science Park, Zhongguancum, Beijing, the
People’s Republic of China (the “Site”).

     

    WHEREAS,
an Affiliate of NeoStem China (the “Tenant”) has entered into lease(s) and other
arrangement(s) for various premises (the “Premises”) at the Site with Beijing
Zhongguancum Life Science Park Development Co., Ltd. (the
“Landlord”).

     

    WHEREAS,
the portion of the Premises (the “Phase 1 Premises”) which is the subject of
this Agreement is described in the Report (which Report in an integral part of
this Agreement and which is attached hereto as Attachment D and is incorporated
herein by reference).

     

    WHEREAS,
PCT developed and presented to NeoStem the Report pursuant to which PCT provided
recommendations for the Program (as defined in Attachment A, which attachment is
an integral part of this Agreement and which is attached hereto and incorporated
herein by reference).

     

    WHEREAS,
the Client and PCT desire that PCT complete the Program on the terms set forth
in this Agreement and on a “turn key” basis.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

     

    Section
1.  Terms.

     

    Terms
used in this Agreement and not otherwise defined in this Agreement shall have
the meaning set forth for such term in Attachment A.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
2.  Services To Be Performed; Program Amendment
Orders.

     

    A.          PCT
will complete the Program in accordance with the Services set forth in
Attachment B which attachment is an integral part of this Agreement and which is
attached hereto and incorporated herein by reference.  The Services
set forth the parameters of the Program and the estimated duration to complete
the Program.  Client expressly acknowledges that it has reviewed and
approved of the Services described in Attachment B, the cost estimates set forth
in Attachment F and the estimated timelines as set forth in Attachment G each of
which attachment is an integral part of this Agreement and each of which is
attached hereto and incorporated herein by reference.  Subject to the
succeeding sentence, PCT will assure that the Program will comply, in all
material respects with all applicable Standards in effect as of the date of
immediately preceding the commencement of the initial Support Services Period
appropriate to the Program.  In the event of a conflict in Standards,
NeoStem will designate, in writing, which regulations shall be followed by PCT
in its performance of the Program.  This Agreement is intended to be a
“turn key” agreement, such that, subject to Client’s hiring sufficient numbers
of qualified and experienced staff, including Key Personnel to operate and
maintain the facility which is the result of the Program, upon the satisfaction
of the Services provided in Attachment B by PCT, PCT will have delivered to the
Client a facility which satisfies the requirements of Attachment B, is in full
compliance with the Standards and which facility, if the Client operates the
facility in accordance with the Standards and the various standard operating
procedures and protocols provided by PCT in connection with the Services will be
a fully functioning and operational GMP compliant facility.  PCT shall
also provide Support Services during the Support Services Period to assure that
Client’s personnel and agents can operate the Phase I Premises in the manner
intended and that such facility remains compliant with the Standards, as they
may be amended from time to time.

     

    B.           PCT
shall provide and/or retain the required personnel and Third Party support as
PCT deems necessary (including, but not limited to, architects, project
directors, general contractors, laborers, engineers, consultants, technicians
and other Third Parties as determined by PCT) to perform the Services and the
Support Services.  PCT shall use commercially reasonable efforts to
complete the Program as provided in Attachment B within the estimated time
duration set forth in Attachment G, as the Program and any times frames may be
amended or modified by any Program Amendment Orders and/or Change
Orders.  Notwithstanding the previous sentence, Client recognizes and
agrees that Program completion, timelines and cost figures are good faith
estimates made by PCT in commercially reasonable determination.

     

    C.           PCT's
Point of Contact at the Client, with respect to the Services are any one of
Robin L. Smith, M.D., M.B.A., in New York City and Peter Sun in China or
any other party designated in a Written Notice from the Client delivered to
PCT.  Each of Client’s Point of Contact shall have responsibility over
all matters relating to the performance of the Program on behalf of the Client
without PCT having any responsibility to communicate with and/or contact any
other Client Point of Contact and PCT may deal with any one Client Point of
Contact as to a particular matter or concern.  The respective Client
Point of Contracts have sole responsibility for keeping the remaining Client
Point of Contracts informed of all matters which PCT has contact such individual
Point of Contract.

    
      
         

      

      
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    D.           Client’s
Point of Contact at PCT with respect to the Services is George S. Goldberger, or
another party designated in a Written Notice from PCT delivered to
Client.  PCT’s Point of Contact shall be responsible for the
completion of the Program by PCT.

     

    E.           The
Point of Contact for PCT will coordinate performance of the Program with any one
of the Client’s Point of Contact and vice versa.  In the event of
PCT’s receipt of conflicting notices/communications from Client’s Point of
Contacts, PCT shall rely on the notice or communication received from Robin L.
Smith, M.D., M.B.A.  Unless otherwise provided in this Agreement, all
communications between PCT and the Client regarding the conduct of the Program
pursuant to the Services shall be addressed to or routed through each party’s
respective Point of Contact (in the case of the Client’s Point of Contacts, PCT
shall endeavor to address any communication to all Client Points of Contract,
provided, however, failure to provide notices to all Client Points of Contract
will not affect the validity of the communication provided to one Client Point
of Contract.

     

    F.           If
there is any conflict between the terms and provisions of the Report or this
Agreement (including Attachment F and Attachment G), the terms of this Agreement
shall control and govern.

     

    G.           Client
agrees to fulfill its responsibilities as set forth in this Agreement and Client
further acknowledges and agrees that in order for PCT to carry out the Program
and perform the Services, Client must satisfy its obligations under this
Agreement, NeoStem China must insure that the Tenant performs its obligations
under its Leases with the Landlord, including, without limitation, providing PCT
and all Third Parties engaged by PCT to provide Services and/or support in
connection with the Services access to the Phase 1 Premises as reasonably
required by PCT to enable PCT to perform and provide the
Services.  Each Client will fully cooperate with PCT in connection
with communication with the Tenant and the Landlord, as applicable, and
execution and delivery of all forms, applications, documents, permits, purchase
orders, trade contracts and other materials determined by PCT as necessary to
enable PCT to provide and perform the Services and complete the
Program.

     

    H.           It
shall not be considered a breach of this Agreement by either party if either
party is unable to fulfill its obligation to the other due to action or inaction
by the other party.  PCT will use commercially reasonable efforts to
perform and cause to be performed the Services as set forth in this Agreement,
in all Program Amendment Orders, Change Orders relating to the Program and other
written agreements between PCT and the applicable Client.

     

    Section
3.  Payment For Services.

     

    A.           Notwithstanding
any cost estimates attached to the Report to the contrary, Client shall pay to
PCT the amounts set forth below, plus all out of pocket and pass through costs
and expenses incurred by PCT and set forth in Section 3(C) below).  In
order for PCT to perform the Services, a critical component will be the payment
by Client of the amounts in this Agreement, including those set forth below in
Section A(1) below on the dates provided.  The below payment schedule
for the Services, excluding the Support Services and excluding changes resulting
from Program Amendment Orders and/or Change Orders, NeoStem China approved
change orders and/or other Client approved written documents) and Section 3(C)
costs and expenses, is based upon the Total Estimated Phase 1 Project Costs in
the amount of $2,614,100.00 as set forth in Attachment F.

    
      
         

      

      
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                              “Total Phase 1 Design and
      Construction Cost”, in the amount of [*], as set forth in
      Attachment F.

                            	 	 	 
	 	 	 	 
	
                              “Total Laboratory & CER
      Equipment”, in the amount of [*], as set forth in
      Attachment F.

                            	 	 	 
	 	 	 	 
	
                              “Total Project Management and
      cGMP Quality Systems”, in the amount of [*], as set forth in
      Attachment F.

                            	 	 	 
	 	 	 	 
	
                              Total
      of Section 3(A) payments

                            	 	$	2,614,100	 

                    

                  

                

              

            

          

        

      

    

     

    A1.         Attachment
I which attachment is an integral part of this Agreement and which is attached
hereto and incorporated herein by reference represents milestones towards
completion of the “Total Phase 1 Design and Construction Cost” component of the
Program.

     

    (i)           With
respect to “Total Phase 1 Design and Construction Costs” component, Client shall
pay:

     

    
      	
               
      

            	
              (x)

            	
              on
      the Effective Date, $250,000.00 to be used by PCT only for documented
      “Total Phase 1 Design and Construction Costs” as set forth in Attachment
      F, provided, however, that Client, at its option, in lieu of making the
      payment of $250,000.00 on the Effective Date, may pay PCT, $250,000.00 on
      the Start Date;

            

    

     

    
      	
               
      

            	
              (y)

            	
              the
      balance of the “Total Phase 1 Design and Construction Costs” component
      payments in the amounts and at the times provided in Attachment I as the
      applicable milestone set forth in Attachment I is satisfied as certified
      by PCT to the Client that such applicable milestone is complete;
      and

            

    

     

    
      	
               
      

            	
              (z)

            	
              Upon
      its receipt of funds, PCT shall thereafter, on at least a weekly basis,
      provide NeoStem with the documentation to support the “Total Phase 1
      Design and Construction Costs” paid by PCT pursuant to Section
      3(A)(1)(i)(x) and (y).

            

    

     

    (ii)           With
respect to “Total Laboratory & CER Equipment” component, prior to the Start
Date, PCT and Client will develop and approve a list of items with associated
acquisition costs which are the subject of the “Total Laboratory & CER
Equipment” component set forth in Attachment F (refining the list in Attachment
D).  From time to time, in addition to the listed equipment described
in the preceding sentence, Client may request that additional items of equipment
be acquired, which acquisition will be effected by purchase orders or other
agreements for the acquisition of such item.  Prior to arranging for
the purchase and delivery of such item, PCT will provide NeoStem China with a
purchase order for such item detailing the payment schedule for such item and
obtain its consent.  Client shall pay to PCT no later than the Start
Date $100,000 (which PCT shall use to make deposits payments on the approved
items). Thereafter, as required by the applicable purchase order, Client shall
pay, to PCT such amount as shall be necessary, in accordance with the approved
purchase order(s), to meet the scheduled payment set forth in such purchase
orders, provided that PCT shall insure that each purchase order for an item
contains a hold back of at least ten percent (10%) of the purchase price of each
item, with such hold back amount to be paid, unless otherwise provided in the
applicable purchase order approved by the Client, to the seller of such item by
PCT only when the equipment is delivered and installed to the Phase 1 Premises
and, if applicable, is operational. Upon its receipt of funds, PCT shall
thereafter, on at least a weekly basis, provide NeoStem with the documentation
to support the “Total Laboratory & CER Equipment” costs paid by PCT pursuant
to Section 3(A)(1)(ii).

    
      
         

      

      
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    (iii)         With
respect to “Total Project Management and cGMP Quality Systems” component, the
Client shall pay:

     

    
      	
               
      

            	
              (x)

            	
              on
      the Effective Date, [*], provided, however,
      that Client, at its option, in lieu of making the full payment of [*] on the Effective
      Date, may pay PCT, [*]
      on the Start Date and, commencing on the first day of the month
      that is more than thirty (30) days after the Start Date (the “Initial Fee
      Month”), two (2) monthly payments of [*] each, for an
      aggregate of three (3) payments aggregating [*];

            

    

     

    
      	
               
      

            	
              (y)

            	
              commencing
      on the first day of the second month following the Initial Fee Month, two
      (2) monthly payment of [*] each, for an
      aggregate of two (2) payments aggregating [*];
  and

            

    

     

    
      
        	
              	
                (z)

              	
                upon
      the delivery by PCT of all items required to be delivered to the Client
      pursuant to the second sentence of Section 11(C) of the Agreement upon the
      Program being completed, and the completion of all Services (excluding
      Support Services) as set forth in Attachment B, [*].

              

      

    

     

    B.           Client
shall make payments as defined in the payment schedule set forth in Section 3(A)
and Attachment I.  Client and PCT agree that, in connection with
purchase orders and/or contracts/agreements relating to those items covered by
“Total Phase 1 Design and Construction Costs” and/or “Total Laboratory & CER
Equipment” costs, PCT will determine the timing and sequence for the performance
and delivery of the related items, provided, however, PCT will have no
obligation, pursuant to the power of attorney provided herein, to execute any
such documents unless, Client has made the payments then due to PCT as provided
above.

     

    C.           Client
will also reimburse PCT, and PCT will separately invoice Client, for PCT’s out
of pocket and pass through costs and expenses associated with the Program as
follow:

     

    (i)  Program
related travel, accommodation and meal costs incurred by PCT and its agents and
contractors and other Persons retained by PCT to provide Services as reasonably
determined by PCT, with such travel related costs and expenses to be at the
business class level.  Excluding travel, accommodations and meal costs
incurred by PCT in connection with its obligations associated with Support
Services, all other travel related costs and expenses incurred by PCT under this
subparagraph (i) will be reimbursed by Client in an amount not to exceed, in the
aggregate, $100,000.

     

    (ii)  To
the extent the list of equipment and machinery developed and approved by the
parties pursuant to Section 3(A)(ii) expressly excludes in the cost for such
item, insurance and/or shipping costs or to the extent an item not included in
such approved list is the subject of a purchase order which does not include
insurance and/or shipping, the costs and expenses associated with insuring
and/or shipping such item.

    
      
         

      

      
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    (iii)  With
regard to equipment and furnishings included under the “Total Laboratory &
CER Equipment” cost component of Attachment F, import taxes, sales taxes or
value added taxes associated with any equipment, furnishings and other items
shipped to the Phase 1 Premises used or incorporated at the Premises or
otherwise applicable to the Program and the Services.  Except as set
forth in this subparagraph (iii), each party is responsible for all taxes
imposed on it, including income taxes and service taxes.

     

    D.           In
connection with the Program related travel, accommodation and meal costs
described in Section 3(C)(i) above, excluding the Project Director Trips
(defined below), prior to such trips and related costs and expenses being
incurred, PCT will contact NeoStem (either verbally or in writing) and obtain
NeoStem’s consent, in writing, to the proposed trip(s) to be made by PCT or any
of PCT’s agents and contractors and other Persons retained by PCT to provide
Services (including, but not limited to, architects, Project Director,
consultants, engineers and technicians) which consent will not be unreasonably
withheld or delayed.  Notwithstanding the preceding sentence to the
contrary, the Client agrees that PCT contemplates a minimum of six (6) visits
during the term of this Agreement by the Project Director which trips (the
“Project Director Trips”) and related reasonable costs and expenses NeoStem
provides its consent.

     

    E.           Client
agrees that all payments owed to PCT under Section 3(A) above are due on the
dates provided in Section 3(A)(1) (as modified by Attachment I), but in no event
shall any payment be due prior to the Start Date.  Client agrees that
all other payments owed to PCT, including Section 3(C) costs and expenses, owed
to PCT pursuant to this Agreement are due no later than thirty (30) days after
the later of the invoice date or the Start Date.  Subject to Section
13 of this Agreement, payments which remain unpaid thirty (30) calendar
days after the date when due shall accrue
interest at the rate of twelve percent (12.0%) per annum (the “Default Rate”)
commencing from the date 15 days after such payment was originally due or 30
days after the Start Date, whichever is later, and payable until such payment is
paid in full.

    
      
         

      

      
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      F.           Client
understands and agrees that, with reference to the estimated costs set forth in
Attachment F, as to “Total Phase 1 Design and Construction Costs”, in the amount
of [*], and “Total
Laboratory & CER Equipment” costs, in the amount of [*], that such estimates are
based on good faith estimates received from Third Parties based solely on the
specifications and equipment lists provided to PCT.  Such Third
Parties did not provide pricing based upon on a Guaranteed Maximum
Price.  Client understands that the actual costs for the components
set forth in this Section 3(F) may exceed the estimated budget amounts for such
components.  In connection with the costs associated with the “Total
Phase 1 Design and Construction Costs” component, in the event that the
aggregate of all actual costs in such component exceeds [*], Client shall pay an
amount not to exceed the first [*] of such excess actual
costs as invoiced by PCT.  In the event that the aggregate of all
actual costs in such component is greater than [*] but less than [*], PCT shall be responsible
for and pay such excess actual costs.  In the event that the aggregate
of all costs associated with the “Total Phase 1 Design and Construction Costs”
component exceeds [*]
but less than [*], PCT and Client will share
equally and each will pay [*] of such excess actual
costs.  In the event the aggregate of all costs associated with the
“Total Phase 1 Design and Construction Costs” component exceeds [*], or in the case of the
“Total Laboratory & CER Equipment” costs component, the actual individual
line item costs in such component exceeds [*] of the estimated cost for
such item, in each case, PCT will first obtain the written approval of NeoStem
China pursuant to either a Program Amendment Order or Change Order to incur such
additional cost prior to PCT arranging to procure/purchase such line item
service or equipment.  PCT will provide Written Notice of such costs
and NeoStem China will have ten (10) calendar days after its receipt of Written
Notice from PCT or the Project Director to approve or disapprove of such
additional cost.  Failure to deliver Written Notice to PCT of NeoStem
China’s disapproval of the additional cost within such ten (10) day period will
be deemed disapproval of the cost by NeoStem China.  In the event
NeoStem China disapproves of such additional cost, PCT will have no obligation
to procure costs or provide the service or acquisition which was the subject of
such cost disapproval and such failure to provide the same will not be a breach
of PCT’s obligations under this Agreement.  In the event the service
or acquisition which was the subject of a cost disapproval by NeoStem is a
pre-condition to a service and/or acquisition to be provided in this Agreement,
unless NeoStem and PCT mutually agree to an alternative method of providing such
subsequent service and/or acquisition pursuant to a Program Amendment Order or
Change Order, PCT will have no obligation to provide such subsequent services
and/or acquisition and such failure will not be a breach under this Agreement,
and, if additional construction costs are disapproved, this Agreement may
thereafter be terminated by either party without further
liability.

    

     

    G.           Any
change in the Program is subject to agreement in advance through a Program
Amendment Order or Change Order.

     

    H.           PCT
shall endeavor to provide invoices to each Client Point of Contact for Section
3(A)(1) scheduled payments prior to such scheduled payment.  Failure
to provide Section 3(A)(1) payment invoice(s) to each Client Point of Contact or
Client’s failure to receive such Section 3(A)(1) invoice(s) will not relieve
Client of its obligation(s) to make Section 3(A)(1) payments on the scheduled
due date except that no interest shall be charged unless at least one Client
Point of Contact received an invoice at least thirty (30) days in advance of the
payment due date.  PCT shall provide monthly invoices for other
payments owed to PCT, including Section 3(C) costs and
expenses.  Invoices will be in paper form and be sent NeoStem’s
address set forth at the beginning of this Agreement.

     

    I.     
      Client expressly agrees and understands that
the costs and time frames for performing the Services set forth in the Report,
Attachment F and Attachment G and are estimates prepared, in good faith, by PCT
in its commercially reasonable opinion and that no guaranty or warranty is made
by PCT that such costs and/or time periods can, in fact, be adhered to,
provided, that PCT further agrees to use commercially reasonable efforts to
perform the Services within the budget and time period estimates provided in
this Report, Attachment F and Attachment G.

    
      
         

      

      
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    J.
           Client
acknowledges that the Services to be provided by PCT and PCT’s Third Party
contractors and suppliers, including the specifics of the laboratory equipment
to be installed at the Phase 1 Premises, were based upon Client’s specifications
for the construction and installation of, and the procurement of equipment at,
the Phase 1 Premises, all of which Services and specifications have been
approved by Client.  Client also acknowledges and agrees that PCT will
perform the Services at the request of the Client.  Client agrees that
if any furniture, furnishings machinery, equipment or other property which is
subject to the budget for “Total Laboratory & CER Equipment” component of
Attachment F (or if a purchase order relates to equipment which would have been
included in such budgeted item) fails to operate as intended by the Client or as
represented or warranted by the manufacturer, vendor or supplier thereof, or in
any way fails to function or perform as represented, Client shall make claim and
any complaint thereto solely and directly against the manufacturer, vendor or
supplier of such item (other than PCT).  Notwithstanding the
preceding, during the period which ends forty five days following the expiration
of the Support Services Period, should any machinery or equipment which is
required for the operation of the facility which is the result of the Program in
accordance with the Standards or any portion of the facility which results from
the Program have been installed improperly or fails to operate as intended or as
represented or warranted by the manufacturer, vendor or supplier thereof, PCT
will assist the Client in fixing, repairing and resolving such defective
item.

     

    K.           Any
references in the Report to PCT joint venture contributions and/or offsets to be
provided by PCT (which reduced the total cost of Services to be paid by Client)
are excluded from this Agreement, are inapplicable and of no force and effect in
connection with any aspect of this Agreement.

     

    Section
4.  Confidential Information.

     

    A.           The
parties have entered into the Confidentiality Agreement which governs the
handling of confidential information between the parties.

     

    B.           Notwithstanding
the terms of the Confidentiality Agreement, neither party will disclose
confidential information pertaining to the Program unless such disclosure: (a)
is to an Affiliate of such party who is under a similar obligation to keep such
confidential information confidential; or (b) is or becomes publicly available
through no fault of such disclosing party; or (c) is required by law, rule,
regulation, order, decision, decree, subpoena or other legal process to be
disclosed.

     

    C.           If,
due to the request of Client and for the sole benefit of Client, PCT becomes
obligated to provide testimony or records regarding any aspects of the Program
in any legal or administrative proceeding arising other than from (x) PCT’s
negligence or willful misconduct or material breach of this Agreement or (y)
from PCT’s provision of records to relevant People’s Republic of
China  authorities to allow PCT to provide services under this
Agreement, then Client shall reimburse PCT all of PCT’s out of pocket costs and
expenses related thereto plus an hourly fee for PCT’s employees or
representatives equal to the then internal fully burdened costs to PCT of such
employee or representative.

     

    D.           Except
as expressly provided in Sections 4(B) and 4(C) above, notwithstanding anything
contained in the Confidentiality Agreement, nothing shall prohibit either party
from summarizing the terms of this Agreement, or from filing this Agreement as
an exhibit, in documents such party is required to file with any government
agency, including, but not limited to, the Securities and Exchange Commission;
provided that such disclosure shall be only to the extent required to comply
with Applicable Laws, and provided further that the party proposing to make such
disclosure shall provide a copy of the proposed disclosure to the other party at
least five (5) days in advance of such disclosure.  It is understood
and agreed that NeoStem will file this Agreement with the United States
Securities and Exchange Commission, provided, further, that NeoStem will use
good faith efforts to exclude from such disclosure the amount of fees received
by PCT for Services under such Agreement.

    
      
         

      

      
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    E.           Except
as otherwise set forth in this Section 4, to the extent that there is any
discrepancy between this Agreement and the Confidentiality Agreement, the
parties agree that the provisions contained in the Confidentiality Agreement
shall prevail.

     

    Section
5.  Relationship of Parties.

     

    A.         This
Agreement does not create an employer-employee relationship between Client and
PCT.  PCT shall not hold itself out as an agent or representative of
Client except as provided in Section 5(B) below.  PCT shall perform
the Program as an independent contractor of Client and shall have complete and
exclusive control over its equipment, employees and agents.  Nothing
in this Agreement shall constitute PCT, or anyone furnished or used by PCT in
the performance of the Services, as employee, joint venturer, partner, or
servant of the Client.

     

    B.           The
Client hereby authorizes PCT to execute as NeoStem China’s attorney-in-fact,
only the following documents: (i) purchase orders and agreements for items set
forth in Attachment F consistent with the terms of this Agreement and (ii)
permit applications and contracts with Third Parties to provide or perform
Services relating to the Program.  If PCT executes an agreement as
attorney-in-fact as provided herein: (a) PCT shall be fully responsible for
assuring that the provider of such goods or services complies with such
agreement at the Phase 1 Premises and PCT will be fully liable for work
performed, (b) PCT, provided, it has received the necessary payments from Client
in immediately available funds, shall make all payments to the Third Party
contemplated by any such contract and (c) provided, Client has performed its
obligations under this Agreement, including making payments as required by this
Agreement, PCT shall fully indemnify, defend and hold Client harmless for a
period not to exceed forty five (45) days following the expiration of the
Support Services Period from and against any obligations to such Third Party
excluding any that arise out of Clients negligence or misconduct.  The
providers of all services and goods in connection with the Program will be
instructed to bill PCT, on behalf of the Client, for the payment of services and
goods and not the Client and will agree to look only to PCT for
payment.

     

    Section
6.  Representations, Warranties and Covenants.

     

    A.           General
Representations, Warranties and Covenants.  Each party represents
warrants and covenants to the other that it has the necessary right and
authority to enter into this Agreement and all Program Amendment Orders and
Change Orders, subject to NeoStem obtaining board of director approval prior to
the Start Date.  Neither party makes any representation or warranty to
the other except as specified in this Agreement.

     

    B.           Representations,
Warranties and Covenants of PCT.

     

    i)   PCT
and its employees, agents, sub-contractors and representatives providing the
Services hereunder shall have the expertise in the relevant subject matter to
perform the Services, and shall perform their obligations under this Agreement
in a professional and workmanlike manner with due care.

    
      
         

      

      
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    ii)  PCT shall, on behalf of NeoStem China
as required, and at Client’s cost obtain and maintain all necessary permits and authorizations as required under this
Agreement and Applicable Laws with respect to the
Services.

     

    iii)  PCT’s
execution and performance of this Agreement (including, but not limited to, the
provision of the Services), comply with all Applicable Laws, and PCT is not
required to obtain any authorizations, permits, or licenses (if the effect of
such failure actually impairs its ability to perform under this
Agreement).Attachments F and G represent cost estimates and estimated time
durations for the completion of the Program which PCT has determined are
commercially reasonable for the Program.

     

    iv) PCT will cause all Services to be
performed by Third Party providers in accordance with commercial standards
applicable at the time the work is performed.  PCT shall provide for
the supervision of the Services using its best skill, judgment and
attention.  PCT shall be solely responsible for all construction
means, methods, techniques, sequences and procedures within the scope
Services.

     

    v)  PCT
agrees that it shall cause to be performed the following services in connection
with the construction and installation of the Phase 1 Premises in accordance
with this Agreement:

     

    
      	
               
      

            	
              (1)

            	
              establish
      procedures for the orderly and expeditious performance of the Services in
      accordance with the terms of this Agreement and establish procedures for
      administration of trade contracts; and maintain coordination among trade
      contractors;

            

    

     

    
      	
               
      

            	
              (2)

            	
              prepare
      Phase 1 Premises site organization and lines of authority in order to
      carry out the Services on a coordinated
basis;

            

    

     

    
      	
               
      

            	
              (3)

            	
              organize
      staff and assign personnel to various areas to provide a positive an
      efficient means by which the Services may be controlled, coordinated and
      expedited;

            

    

     

    
      	
               
      

            	
              (4)

            	
              conduct
      necessary job and coordination meetings, which coordination meetings shall
      be held as reasonably required by the
Client;

            

    

     

    
      	
               
      

            	
              (5)

            	
              submit
      to Client as requested by the Client (but not more than one (1) time each
      month), a “Job Progress Report” which shall describe the following:
      (i) the financial condition of the Services, material Program
      modifications, anticipated cost and change order summary;
      (ii) construction status with projected critical dates compared with
      original milestone dates, status of job progress to date, current work
      activity, and projected work activity for the following
    month;

            

    

     

    
      	
               
      

            	
              (6)

            	
              provide
      to Client, as reasonably requested by Client, oral updates as to the
      status of the Program to date and other matters similar to those set forth
      in Section 6(B)(vi)(5) above;

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (7)

            	
              establish
      and coordinate with Client a system for processing, expediting and
      administering contracts and agreements for the purchase of materials,
      supplies and equipment as required by the Agreement.  Manage the
      procurement and delivery of critical materials to the Phase 1 Premises and
      coordinate the deliveries with the progress of the
  work;

            

    

     

    
      	
               
      

            	
              (8)

            	
              inspect,
      manage and coordinate the work of all Third Party contractors, enforce the
      terms of their respective contracts and agreements and enforce discipline
      and good order among all Third Party contractors in an effort to see that
      the Services are performed in accordance with the terms of such contracts
      and agreements, recognized trade standards, the Standards and Applicable
      Laws and endeavor to guard Client against any delays, increased costs and
      defects and deficiencies in the work
provided;

            

    

     

    
      	
               
      

            	
              (9)

            	
              use
      reasonable efforts to resolve disputes between Third Party contractors
      relative to the performance of their work or the furnishing of materials,
      supplies or equipment in connection with the
  Services;

            

    

     

    
      	
               
      

            	
              (10)

            	
              maintain
      the Phase 1 Premises in a safe and orderly
  fashion;

            

    

     

    
      	
               
      

            	
              (11)

            	
              enforce
      the implementation of necessary safety, health and environmental
      protection measures during the performance of the Services at the Phase 1
      Premises;

            

    

     

    
      	
               
      

            	
              (12)

            	
              provide
      the Client with the Program
      consistent with the Standards on a “turn key”
  basis;

            

    

     

    
      	
               
      

            	
              (13)

            	
              provide
      the Support Services during the Support Services
  Period;

            

    

     

    
      	
               
      

            	
              (14)

            	
              provide
      during the Support Services Period, updated operating procedure and
      additional training (beyond that contemplated in Attachment B) for
      Client’s personnel, repairs and maintenance;
and

            

    

     

    
      	
               
      

            	
              (15)

            	
              take
      such other actions as PCT determines in its sole discretion in order to
      provide and perform the Services
hereunder.

            

    

     

    vi)  The
Program will meet the specifications set out in this Agreement and the
attachments, Program Amendment Orders and Change Orders, if any.

     

    vii)  In
performing any of its work or carrying out its obligations under this Agreement,
PCT (1) shall not knowingly infringe upon
any United States or foreign copyright, patent, trademark, trade secret or other
proprietary right, or misappropriate any trade secret of any Third Party and (2)
has neither assigned nor otherwise entered into any agreement by which it
purports to assign or transfer any right, title or interest to any technology or
intellectual property right that would conflict with its obligations under this
Agreement.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    C.           Representations and Warranties of
Client.

     

    i)      Client
will fully cooperate with PCT in connection with PCT’s performance of the
Services provided in this Agreement, including, but not limited to, assuring PCT
and its agents, with commercially reasonable access to the Site, the Premises
and the Phase 1 Premises at all commercially reasonable time
periods.

     

    ii)     Client shall
fully cooperate with PCT (but at PCT’s cost) and assist PCT in obtaining and
maintaining all necessary permits and
authorizations (including, but not limited
to, building, construction, development, regulatory, environmental and waste
control permits and licenses) as PCT determines is reasonably required, either by the Tenant,
Landlord and/or all Applicable Laws with respect to the construction and
installation at the Phase 1 Premises in accordance with this
Agreement.

     

    iii)    The
Leases are or will be in full force and effect and Tenant’s and Landlord’s
consent and approval for the Services to be performed by PCT will have been
obtained prior to the Start Date.

     

    iv)    Client
agrees that it will not, and will not permit the Tenant, to amend, modify or
terminate (a “Lease Modification”) any one or more of the documents consisting
of the Leases in any way which would impair or affect PCT’s performance of the
Services, without providing at least ten (10) days Written Notice of such
proposed Lease Modification to PCT.

     

    v)     Client
understands and agrees that, PCT has been authorized by NeoStem China to execute
various contract(s) on behalf of NeoStem China with local Third Party providers
in order to perform Services at the Phase 1 Premises.  NeoStem China
represents and warrants that it is a registered company under the Applicable
Laws of the People’s Republic of China and has the power and authority to enter
into any such contracts which will enable PCT to perform and/or have performed
such Services.  In order to enable PCT to perform such construction
services at the Phase 1 Premises, NeoStem and NeoStem China will fully
cooperate, and will cause the Tenant to fully cooperate, with
PCT.  NeoStem China will execute any construction contract which is in
form and substance consistent with this Agreement and acceptable to both PCT and
the Client.  Failure to cooperate and execute such contract(s) as
presented by PCT to NeoStem China will not relieve Client from its Section
3(A)(1) payment obligations but will extend the estimated time frame for
performance of Services pursuant to the Agreement for the period of time that is
required for NeoStem China to be registered in order to comply with Applicable
Laws in the People’s Republic of China and/or the execution of such
agreements.  Client shall be given adequate time to review any
construction contract.

     

    D.           Disclaimer of
warranties.  As to those items which are provided pursuant to
the “Total Laboratory & CER Equipment” component set forth in Attachment F
and purchase orders relating to the equipment and furnishings at the Phase 1
Premises and which were selected solely by the Client, PCT does not make any
warranty with respect to such items and PCT specifically disclaims, as to such
items only, all express or implied representations or warranties, including any
warranty of merchantability, fitness for any particular purpose or
non-infringement, or any implied warranty arising from course of performance,
course of dealing or usage of trade.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Section
7.  Duration, Default; Lease Modification; Termination;
Reconciliation.

     

    A.           Except for the obligations
described in Sections 4, 8, 14(H), 14(I) and 14(J), which shall survive
termination of this Agreement, this Agreement shall be in effect for the period
set forth in Attachment G commencing on the Effective Date, except that the
Services shall commence on the Start Date and the estimated term for Services,
including the Support Service during the initial Support Services Period is ten
(10) months.

     

    B.           Subject
to Section 13 of this Agreement, if PCT is in default of a material obligation
under this Agreement and PCT fails to cure such default within thirty (30) days
of PCT’s receipt of Written Notice of such default, then this Agreement shall,
at Client's option, terminate upon delivery to PCT of a Written Notice of
termination of this Agreement.  PCT shall comply with such Written
Notice of Termination and use commercially reasonable efforts to turn over to
Client the benefits of all purchases made on Client’s behalf and work performed
for Client, turn over to Client all files, work papers, diagrams, purchase
orders and other materials related to the Program and otherwise act to reduce
completion cost to the Client and cause there to be a smooth transition to any
successor contractor.

     

    C.           Subject
to Section 13 of this Agreement, if Client is in default of a material
obligation under this Agreement and Client fails to cure such default within
thirty (30) days of Client’s receipt of Written Notice of such default, then
this Agreement shall, at PCT’s option, terminate upon delivery to the Client of
a Written Notice of Termination of this Agreement.

     

    D.           (i)
Client, at its option, may terminate this Agreement without cause upon providing
no less than sixty (60) days Written Notice to PCT of Client’s intent to
terminate the Agreement with the Termination to occur on the last day of the
month following the expiration of the sixty (60) day period.(ii) Client, at its
option, and in its sole unfettered discretion, at any time prior to the Start
Date, for any or no reason, may terminate this Agreement upon Written Notice to
PCT of Client’s intent to terminate the Agreement, without any liability
whatsoever, whereupon this Agreement shall be void ab initio.  A
termination of this Agreement pursuant to this Section 7(D)(ii) shall be
effective on the date of PCT’s receipt of such Written Notice.  PCT
agrees that no payments payable to PCT will be due until a Start
Date.  Notwithstanding this paragraph, PCT shall remain bound under
this Agreement as of the Effective Date.

     

    E.           In
the event PCT receives a Written Notice from the Client regarding a proposed
Lease Modification and then determines that such Lease Modification will have an
effect on PCT’s Services, PCT shall provide Client with Written Notice of such
affect and any costs/ time period effects and other concerns and issues within
fifteen (15) days of PCT’s receipt of the Written Notice regarding the proposed
Lease Modification.  The parties will thereafter, in good faith,
negotiate and execute a Program Amendment Order reflecting the concerns/issues
and other matters raised by PCT regarding the proposed Lease
Modification.  In the event, a Program Amendment Order cannot be
negotiated and executed by the parties and the Client executes a Lease
Modification which PCT reasonably determines impairs or affects PCT’s
performance of the Services then PCT shall have the right to terminate this
Agreement upon Written Notice to the Client, which termination shall be deemed
to be a termination by the Client, without cause pursuant to Section 7(D) of
this Agreement and the balance of the terms and provisions of this Section 7
shall be applicable.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    F.           Upon
termination of this Agreement after the Start Date, Client shall pay for the
Services performed and any Section 3(C) costs and expenses incurred by PCT for
which PCT is obligated to pay provided any such PCT obligation to pay arose
prior to the PCT’s receipt of Written Notice of
Termination.  Additionally, unless PCT has materially breached this
Agreement, Client shall pay for any costs, expenses and pass through costs and
expenses, subject to the terms of this Agreement, which PCT is obligated to pay
after the termination of this Agreement.

     

    G.           With
reference to Attachment F, provided Client (1) has paid PCT all amounts due PCT
pursuant to this Agreement and (2) is not in breach of this Agreement, in the
event Client, as required by the Section 3(A) or 3(A1) payment
schedule,  has paid for “Total Phase 1 Design and Construction Costs”
and/or “Total Laboratory & CER Equipment” costs in excess of the amounts PCT
has an obligation to pay, then on the date of Termination of the Agreement, PCT
will reimburse to Client such excess amount (the “Uncommitted
Amount”).  PCT may offset its payment of the Uncommitted Amount
against the balance of any amounts due and owing to PCT.

     

    H.           This
Agreement may be automatically and immediately terminated by either party, upon
providing Written Notice to the other party of the termination of this
Agreement, if the other party has a liquidator, receiver, manager, receiver or
administrator appointed or is unable to pay debts.

     

    I. 
          Notwithstanding
anything herein to the contrary, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
ENTITLED TO INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING IN
CONNECTION WITH THE DEFAULT OR BREACH OF ANY OBLIGATION OF THE OTHER PARTY UNDER
THIS AGREEMENT, THE SERVICES OR ANY DOCUMENTS OR ATTACHMENTS RELATED
THERETO.

     

    Section
8.  Indemnification and Limitation of Liability.

     

    A.           Client
shall indemnity, defend, and hold harmless PCT and PCT’s agents, servants,
directors, officers, managers, members and employees (collectively, “PCT’s
Agents”) from and against any and all claims, damages, losses, expenses, and
liabilities of any nature whatsoever, including reasonable attorney’s fees and
disbursements (collectively, “Claims”) incurred, caused, based upon, arising out
of or resulting from any negligent acts or willful omissions of Client and/or
Client’s agents, servants, directors, officers and employees (collectively,
“Client’s Agents”), including, but not limited to, Client’s or Client’s Agents’
violation or failure to perform, or misrepresentation with respect to, any of
the terms, covenants or conditions of this Agreement, except, in each instance,
to the extent incurred, caused or occasioned by, in connection with or arising
out of the acts or omissions of PCT and/or PCT’s Agents including, but not
limited to, PCT’s violation or failure to perform, or misrepresentation with
respect to, any of the terms, covenants or conditions of this
Agreement.  In the event that a Claim arises in whole or in part from
PCT’s and/or PCT’s Agents’ negligence, gross negligence or intentional
misconduct or inaction, then the amount of the Claim that Client shall indemnify
PCT or, if applicable, PCT’s Agents pursuant to this Section 8(A) shall be
reduced by an amount in proportion to the percentage of PCT’s and/or PCT’s
Agents’ responsibilities for such Claim as determined by a court of competent
jurisdiction in a final and non-appealable decision or in a binding settlement
between the parties.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    B.           PCT
shall indemnify and hold harmless Client and Client’s Agents from and against
all Claims, arising out of or in connection with any personal injury, sickness
or death or damage or injury to, loss of or destruction of property (including
tools, equipment, plant and the buildings at the Phase 1 Premises and excluding
costs to the extent such costs are covered by Client’s insurance), to the extent
such Claim is caused in whole or in part by any negligent act or willful
omission of PCT, the Third Party contractors retained directly or indirectly by
PCT, or anyone for whose acts PCT or its Third Party contractors may be liable,
except, in each instance, to the extent incurred, caused or occasioned by, in
connection with or arising out of the acts or omissions of Client and/or
Client’s Agents including, but not limited to, Client’s violation or failure to
perform, or misrepresentation with respect to, any of the terms, covenants or
conditions of this Agreement.  In the event that a Claim arises in
whole or in part from Client’s and/or Client’s Agents’ negligence, gross
negligence or intentional misconduct or inaction, then the amount of the Claim
that PCT shall indemnify Client or, if applicable, Client’s Agents pursuant to
this Section 8(B) shall be reduced by an amount in proportion to the percentage
of Client’s and/or Client’s Agents’ responsibilities for such Claim as
determined by a court of competent jurisdiction in a final and non-appealable
decision or in a binding settlement between the parties.

     

    C.           Upon
receipt of Written Notice of any Claim which may give rise to a right of
indemnity, the party seeking indemnification (the “Indemnified Party”) shall
give Written Notice thereof to the other party, (the “Indemnifying Party”) with
a Claim for indemnity.  Such Claim for indemnity shall indicate the
nature of the Claim and the basis therefore.  Promptly after a claim
is made for which the Indemnified Party seeks indemnity, the Indemnified Party
shall permit the Indemnifying Party, at its option and expense, to assume the
complete defense of such Claim, provided that; (i) the Indemnified Party will
have the right to participate in the defense of any such Claim at its own cost
and expense; (ii) the Indemnifying Party will conduct the defense of any such
Claim with due regard for the business interests and potential related
liabilities of the Indemnified Party; and (iii) the Indemnifying Party will,
prior to making any settlement, notify the Indemnified Party, in writing, of
such settlement offer and subsequently consult with the Indemnified Party as to
the terms of such settlement.  The Indemnified Party shall have the
right, at its election, to release and hold harmless the Indemnifying Party from
its obligations hereunder with respect to such Claim and assume the complete
defense of the same in return for payment by the Indemnifying Party to the
Indemnified Party of the amount of the Indemnifying Party's settlement
offer.  The Indemnifying Party will not, in defense of any such Claim,
except with the consent of the Indemnified Party, consent to the entry of any
judgment or enter into any settlement which does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect
thereof.  After notice to the Indemnified Party of the Indemnifying
Party's election to assume the defense of such Claim, the Indemnifying Party
shall only be liable to the Indemnified Party for such legal or other reasonable
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof at the request of the Indemnifying Party.  As to those
Claims with respect to which the Indemnifying Party does not elect to assume
control of the defense, the Indemnified Party will have the sole and exclusive
right to settle or otherwise dispose of any of the same without the consent of
the Indemnifying Party.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    D.           The
obligations set forth in this Section 8 shall survive for a period ending forty
five (45) days following the expiration of the Support Services
Period.

     

    Section
9.  Prospective Events.

     

    A.           For
purposes of this Section 9, the following terms shall have the meanings given to
them as set forth below:

     

    “Prospective Illegality” means any foreign, state
or federal statute or common law, or foreign, state or federal administrative
agency rule, guidance or directive now existing or enacted or promulgated or
re-interpreted after the Effective Date of this Agreement that is interpreted by
judicial decision, a Regulatory Agency or legal counsel (in the case of legal
counsel pursuant to a legal opinion reasonably acceptable to the receiving party
from legal counsel reasonably acceptable to the receiving party and addressed to
such receiving party) in such manner as to result in the conclusion that any act
or service required of PCT or Client under this Agreement is in violation of
such law, rule, guidance or directive.

     

    “Prospective Cost Increase”
means either the (a) occurrence of an event outside the control of PCT,
including, without limitation, any Force Majeure event or (b) the enactment of a
foreign, state or federal statute, common law, foreign, state or federal
administrative agency rule, guidance or directive or amendment thereof, in any
case, after the Effective Date of this Agreement and not contemplated before the
Effective Date as to which compliance by PCT with the terms and provisions of
this Agreement imposes an unanticipated financial burden upon PCT.

     

    B.           Effect
of a Prospective Illegality.  In the event of a Prospective
Illegality, Client and PCT shall promptly negotiate in good faith a Program
Amendment Order to this Agreement as necessary to address such Prospective
Illegality.  Pending agreement on the appropriate amendment, either
Client or PCT, on fourteen (14) days Written Notice to the other’s Point of
Contact, may cease to perform a questioned act; provided, however, that this
Agreement will nevertheless be performed by both Client and PCT to the extent
possible.

     

    C.           Effect
of a Prospective Cost Increase.  In the event of a Prospective Cost
Increase, Client and PCT shall negotiate in good faith a Program Amendment Order
to the payment terms of this Agreement to address such cost
increase.  To the maximum extent possible, any such Program Amendment
Order agreed to pursuant to this Section 9 shall preserve the primary benefits
sought to be achieved by this Agreement and the underlying economic and
financial arrangements between the parties.  If Client and PCT agree
that the primary benefits sought to be achieved by this Agreement cannot be
achieved through an appropriate Program Amendment Order, then this Agreement,
unless an earlier date is agreed to by both parties, will be automatically
terminated thirty (30) days after Written Notice by either party to the Point of
Contract of the other party referring to this Section 9 as the basis of the
Termination of this Agreement.  A termination of this Agreement
pursuant to this Section 9(C) shall be deemed a termination by the Client
without cause pursuant to Section 7(D) of this Agreement and the balance of the
terms and provisions of Section 7 shall be applicable.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    Section
10.  Materials and Equipment; Change Orders.

     

    A.           As
the work at the Phase 1 Premises progresses, title to each item of material or
equipment shall vest in NeoStem China upon the incorporation of such item into
the Phase 1 Premises.  Each such item shall then become the sole
property of NeoStem China.

     

    B.           After
the Start Date, PCT shall, on behalf of the Client, be entitled to arrange
for the pre-purchase of certain Services relating to materials and equipment to
be incorporated and/or installed at the Phase 1 Premises in order to perform the
Services herein without the prior written approval of the Client provided that
such items satisfy the specifications provided to PCT by the
Client.  All materials and equipment pre-purchased as aforesaid shall
be stored at the Phase 1 Premises or at such off- storage locations as shall
have been approved in writing in each instance by Client or the Project
Director.  Insurance premiums, storage costs and other reasonable
expenses incurred by reason of such offsite storage shall be included in Section
3(C) costs.

     

    C.           A
written change order (“Change Order”) or Program Amendment Order shall be the
instrument required to authorize any change in the Services which would result
in (i) a change in the basic character, design intent or scope of the
Program, which PCT represents as having served as the basis of the Section 3(A)
payments, (ii) a deviation from design standards established for the Program or
any part thereof, which PCT represents as having served as the basis of the
Section 3(A) payments, (iii) an extension of the estimated completion dates as
provided in Attachment B and Attachment G for which PCT is entitled to an
extension of time under this Agreement or (iv) other circumstances for which the
Section 3(A) payments need to be increased or decreased to the extent expressly
provided for in this Agreement.

     

    D.           Client,
without invalidating or abandoning this Agreement, may at any time require
changes in the Services consisting of additions, deletions or other
revisions.  All such required changes in the Services shall be
requested in writing by Client (a “Request for Proposal”); shall be submitted to
the Project Director and PCT; and, in order to be deemed part of, or deleted
from, the Services and authorized by Client, shall be executed in the manner set
forth below.

     

    i)      Within
seven (7) days or if not practicable within a reasonable amount of time from
Project Director’s and PCT receipt of a Request for Proposal, Project Director
shall prepare and furnish to Client and PCT a signed statement (“Change
Proposal”), in a form satisfactory to Client and PCT, setting forth in detail,
with suitable breakdowns by trades and work classifications, and using the “unit
price” and/or other costing method acceptable to Client, Project Supervisors’
estimate of (x) the cost, or savings, of the change reflected in the Request for
Proposal, which cost shall be at the best price obtainable for, shall reflect
the most economical manner of affecting, such change and include a mark-up
charged by the Project Director in connection with the services to be provided
in the Change Proposal, (y) the resulting increase or decrease in the cost of
the Services, and (z) the changes in the Services or the schedule for completion
of Services set forth in Attachment B and Attachment G which would result from
implementation of the Request for Proposal.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    ii)     If
Client approves the Change Proposal, Client shall issue to PCT a written Change
Order signed by Client and the various dates of completion of the Services, any
changes to Section 3(A) payments and other applicable changes, as the case may
be, shall be adjusted if required in accordance with the terms of such Change
Order.  All other terms and conditions of this Agreement shall remain
in full force and effect.

     

    E.           The Client, at its option, and notwithstanding
Attachment F, Attachment G and the payment
terms set forth in Section 3(A) and 3(A)(1) may request that the parties execute
a Program Amendment Order providing for additional freezer storage capacity and
a liquid nitrogen system at the Premises, which Program Amendment would
provide for the terms, costs and time frame for such
additional services.

     

    Section
11.  Management of Services; Completion of Services; On Site Meetings;
Support Services.

     

    A.           The
Project Director will oversee the successful and timely completion of the
Services and be in direct charge of the administration of the Services,
including all matters concerning the schedule of Services, budget and timelines
associated with the Program as well as the procurement of equipment to be
installed at the Phase 1 Premises in accordance with the Report, Attachment B,
Attachment F and Attachment G.  Project Director will supervise
performance of the Services; and arrange for the supervision of the construction
and installation activities at the Phase 1 Premises.

     

    B.           Whenever
this Agreement requires or permits the approval or consent of either Client,
such approval or consent shall be deemed given only if furnished by the Client
Point of Contract, in writing with the consent of one Client being automatically
deemed to be the consent of the other Client.  Any such approval or
consent given by such person shall be binding on NeoStem China and NeoStem, as
applicable, unless and until PCT has received Written Notice from NeoStem China
or NeoStem, as applicable, of the designation or appointment of a successor to
the foregoing.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    C.           The
Services (excluding the Support Services) shall be performed within the
estimated time frame provided in Attachment G.  Within such time frame
Client shall receive satisfactory evidence, that: (i) all Services (excluding
the Support Services), including all items set forth on any punch lists, have
been fully and satisfactorily completed in a good and workmanlike manner, in
conformance with this Agreement and in compliance with Applicable Laws having
jurisdiction over the Phase 1 Premises; (ii) all final certificates of
occupancy, certificates of approval and certificates of inspection and other
applicable regulatory approvals, as applicable, relating to the construction,
installation and contemplated uses at the Phase 1 Premises; (iii) PCT has
certified that subject to Client’s hiring sufficient numbers of qualified and
experienced staff, including Key Personnel to operate and maintain the facility
which is the result of the Program, the facility and if the Client operates the
facility in accordance with the Standards and the various standard operating
procedures and protocols provided by PCT in connection with the Services, the
facility is a fully functioning and operational GMP compliant facility; .and
(iv) all required receipts, releases of liens, warranties and any other
documents required under this Agreement or the Third Party
contracts.  PCT shall notify Client promptly if the Services
(excluding the Support Services), or any portion thereof, will not be completed
within the estimated time provided in Attachment G, provided however that rather
than the estimated time of October through April as set forth therein, the
estimated time period shall be a period of seven (7) months commencing on the
Start Date and ending on the last day of the seventh month.  If PCT so
notifies Client, PCT shall take appropriate action to improve the progress of
the Services at the Phase 1 Premises and shall, if requested by Client, submit
operational plans to demonstrate the manner in which the lost time may be
regained if possible.  Such actions shall not result in an increase in
the Section 3(A) payments unless otherwise reflected in a Program Amendment
Order or Change Order.  On or before the completion of the Services
(excluding the Support Services), PCT shall cause the Phase 1 Premises to be
cleared of all debris, construction materials, rubbish, rubble, discarded
equipment and spillage of solid or liquid waste at the Phase 1 Premises and
shall remove all tools, construction equipment, machinery and surplus materials
therefrom.  Prior to completion of the Services (excluding the Support
Services) at the Phase 1 Premises, Client shall not have the right to use or
occupy all or any portion of the Phase 1 Premises.  Upon Client’s use
or occupancy of the Phase 1 Premises after its receipt of the items set forth in
the second sentence of this Section 11(C), such use or occupancy shall
constitute acceptance by Client of the Services (excluding the Support Services)
performed and of the space, systems, materials and equipment incorporated in the
Phase 1 Premises.  Notwithstanding the preceding sentence, for during
the period ending forty five day following the expiration of the Support
Services Period, PCT shall remedy any items that fail to operate and/or perform
as intended or in accordance with the Standards in good working
order.  Meetings, at Client’s additional cost and expense, may be held
on site at the Phase 1 Premises or elsewhere as required by the Program and/or
as requested by any party and the mutual agreement of the
parties.  Such meetings will review the progress of the Program,
including issues arising out of, and the follow-up with regard to, actions,
investigations and deviations.

     

    D.           On
the date PCT delivers to the Client all of the items described in the second
sentence of Section 11(C) the Support Services Period shall
commence.  PCT shall notify the Client of its reasonable determination
that the items described in second sentence of Section 11(C) have been
satisfactorily delivered to the Client and the date that the Support Services
Period commences.

     

    
      	
               
      

            	
              (i)

            	
              In
      consideration of PCT providing the Support Services during the Support
      Services Period, Client shall pay, [*] for each thirty (30) day period
      during the Support Services Period, in advance, for Support
      Services.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              In
      connection with any Support Services, Client will reimburse PCT, and PCT
      will separately invoice Client, for PCT’s out of pocket and pass through
      costs and expenses associated with such Support Services, including but
      not limited to Program related travel, accommodation and meal costs
      incurred by PCT and its agents and contractors and other Persons retained
      by PCT to provide Support Services as reasonably determined by PCT, with
      such travel related costs and expenses to be at the business class
      level.

            

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              Reimbursable
      costs relating to Support Services are not subject to the $100,000 cap set
      forth in Section 3(C) of the Agreement, provided, further, that the costs
      and expenses referred to in subclause (ii) immediately above will be
      reimbursed in an amount not to exceed
$50,000.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              In
      connection with the Program related travel, accommodation and meal costs
      described in this Section 11(D), prior to such trips and related costs and
      expenses being incurred, PCT will contact NeoStem (either verbally or in
      writing) and obtain NeoStem’s consent, in writing, to the proposed trip(s)
      to be made by PCT or any of PCT’s agents and contractors and other Persons
      retained by PCT to provide the Support Services which consent will not be
      unreasonably withheld or delayed.

            

    

     

    
      	
               
      

            	
              (v)

            	
              PCT
      shall invoice the Client for the Support Services which invoice shall be
      paid as provided in Section 3 of this
Agreement.

            

    

     

    
      	
               
      

            	
              (vi)

            	
              At
      NeoStem’s option, on no less than thirty (30) days prior to the expiration
      of the initial Support Services Period, NeoStem may provide the PCT
      Contact Person with Written Notice that the Support Services Period is to
      be extended for an additional ninety (90) day period following the date
      the initial Support Services Period was to expire.  Such Written
      Notice of the election to extend the Support Services Period shall be
      accompanied by an amount equal to [*] which will be applied to Client’s
      payment of the first thirty (30) day period of the extended Support
      Services Agreement.

            

    

     

    Section
12.  Insurance.

     

    A.           At
all times during the period of this Agreement, Client shall purchase and
maintain property insurance for all Services performed at the Phase 1 Premises
to the full insurable value thereof with limits no less than Three Million
Dollars ($3,000,000).  This insurance shall include the interest of
Client, PCT and Third Party contractors performing Services and shall insure
against fire and other perils and shall include “all risks” insurance for
physical loss or damage including, without duplication of coverage, theft,
vandalism, and malicious mischief.

     

    B.           PCT
shall maintain and cause Third Party contractors performing Services at the
Phase 1 Premises to purchase and maintain a commercial general liability
insurance policy.  All such policies of PCT and any general contractor
shall be with insurers approved by Client, which approval shall not be
unreasonably withheld.  The policy shall be written on an occurrence
basis (as distinguished from a “claims made” basis and without so called
“sunset” clauses or similar claims reporting restrictions) for a combined single
limit for bodily injury and property damage of not less than $1,000,000 per
occurrence and $2,000,000 in the annual aggregate.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    C.           Each
party (and each general contractor hired by PCT) shall furnish to the other a
certificate of such insurance evidencing the required policies of insurance set
forth above, which certificate shall provide that no such policy shall be
materially altered, amended or cancelled without providing the other party with
at least thirty (30) calendar days prior Written Notice of such change and be in
form and substance (including deductible amounts) reasonably satisfactory to
such other party.  Each such policy shall also name the other party as
an additional insured.  Upon request of Client, PCT shall certify to
Client that it has reviewed the adequacy of the insurance of each contractor or
person providing services at the Premises and found such insurance to be
satisfactory both as to carrier and amount.  Each policy obtained by
PCT and any general contractor at the Premises shall also name Client as
additional insured on a primary and non-contributory basis.

     

    D.           Each
party hereby waives any and all rights it may have against the other and its
respective subcontractors, agents, officers, directors, members and employees
for damages caused by fire or other causes of loss to the extent covered by
insurance required to be provided under this Agreement (the “Amount of
Coverage”) except such rights it may have to proceeds of such insurance held by
it as a fiduciary.  Each party shall require of its
sub-subcontractors, agents, directors, officers, members and employees, by
appropriate agreements, written where legally required for validity, similar
waivers in favor of the other party and its respective subcontractors, agents,
directors, officers and employees.  The insurance policies shall
provide such waivers of subrogation by endorsement or otherwise.  A
waiver of subrogation shall be effective up to the Amount of Coverage as to a
person or entity even though that person or entity would otherwise have a duty
of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.

     

    E.           If
the Premises or any equipment, furniture or other furnishings at the Premises
during the term of this Agreement is lost, stolen, damaged or destroyed, in
whole or in part, by fire, casualty or other malicious occurrence, PCT shall
give prompt notice thereof to Client.  Client shall file any claims
required in connection with any theft, fire or other casualty and shall keep PCT
informed as to the status thereof.  Sums paid to Client by any
insurer, at Client’s option, may be retained by Client, or applied to payments
due PCT pursuant to the Agreement or applied to restoration of the Program (or
any part thereof, as determined by Client). The parties will act so as not to
permit any condition to exist on the Premises that would wholly or partially
invalidate any insurance policy.

     

    Section 13.  Force
Majeure.

     

    Either
party shall be excused from performing its respective obligations under this
Agreement if its performance is delayed or prevented by Force Majeure, provided
that such performance shall be excused only to the extent of and during such
disability. Any time specified for completion of performance in the Services
falling due during or subsequent to the occurrence of any Force Majeure event
shall be automatically extended for a period of time to recover from such
disability.  PCT will promptly notify Client if, by reason of any
Force Majeure event PCT is unable to meet any such time for performance
specified in the Services.  If PCT is likely to be unable to perform
for a period in excess of ninety (90) days, then the parties agree to negotiate
in good faith a mutually satisfactory approach to resolve the delay resulting
from this Force Majeure.  If the parties cannot reach a mutually
satisfactory approach within such ninety (90) day period, then Client shall be
entitled to terminate this Agreement pursuant to Section 7 of this
Agreement.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Section
14.  Miscellaneous.

     

    A.           Notice.  Any
written notice required or permitted by this Agreement shall be deemed to have
been validly given if the same shall be a Written Notice addressed to the proper
party at the address provided at the outset of this
Agreement.  Written Notice shall be effective upon the date
received.

     

    B.           Assignments.  This
Agreement may not be assigned in whole or in part by PCT or either Client
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed, except any party may assign this Agreement
without the other parties’ written consent in the event of a merger with,
acquisition of or by, or the transfer of all of its assets to, in each instance,
a Third Party that is not an Affiliate of the assigning party, provided,
further, that such Third Party, in the reasonable opinion of non-assigning
parties, has the financial resources and financial condition comparable to the
assigning party’s as of the Start Date.  Any attempt to assign this
Agreement without such consent, where required, shall be void and of no effect
subject to the limitations on assignment herein.

     

    C.           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of Client and PCT, including, but not
limited to, any successor by merger and any purchaser of all or substantially
all of the assets of such party.

     

    D.           Entire Agreement;
Modifications; No Contributions Towards a Joint Venture; Third Party
Beneficiary.  This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior or contemporaneous negotiations, promises, covenants,
agreements or representations of every nature with respect thereto, all of which
have become merged and integrated into this Agreement.  No
modification of this Agreement shall be effective unless it is in writing and is
signed by each party.  For the avoidance of doubt, the Client and PCT
acknowledge and agree that all verbal and written agreements relating to fees
paid by the Client and any possible application of Client paid fees towards
satisfaction of any NeoStem funding or contribution to in any other arrangement
or contract, including, but not limited to the Agreement between NeoStem and PCT
dated March 6, 2009 have no further force and effect.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    E.           Governing Law;
Jurisdiction.  This Agreement shall be governed by the laws of
the State of New York, without reference to choice or conflict of law
principles, otherwise applicable.  The parties consent and agree that
any legal action or proceeding against another party or any of their property
with respect to any matter arising under or relating to this Agreement may be
brought in any state or federal court located in the City and State of New
York.  By execution and delivery of this Agreement, PCT, NeoStem and
NeoStem China each submits to and accepts with regard to any such action or
proceeding, for itself and its property, the jurisdiction of the aforesaid
courts.  The Client further irrevocably consents to the service of
process in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Client at its address set
forth at the beginning of this Agreement.  NeoStem China further
hereby irrevocably appoints and designates NeoStem as its duly authorized agent
for service of legal process and NeoStem China agrees that service of such
process upon NeoStem shall constitute personal service of such process upon
NeoStem China (regardless of whether NeoStem provides notice of such service of
process to NeoStem China) and that service of any summons and complaint and/or
other process in any action may be made by registered or certified mail directed
to NeoStem, Client hereby waiving personal service thereof.  Service
of legal process will be complete on the date such process is delivered to
applicable party (or in the case of NeoStem China, to NeoStem).  The
foregoing, however, shall not limit any party’s rights to serve process in any
other manner permitted by law or to bring any legal action or proceeding or to
obtain execution of judgment in any other jurisdiction.  The parties
hereto expressly waive any rights either may have to contest the jurisdiction,
venue or authority of such court.  In the event the bringing of any
action, proceeding or suit by a party hereto against the other party hereto,
arising out of or relating to this Agreement, the party in whose favor the final
non-appealable judgment or award shall be entered shall be entitled to have and
recover from the other party the reasonable costs and expenses incurred in
connection therewith, including its reasonable attorney’s fees.

     

    F.           Facsimile
Signatures.  This Agreement may be executed by facsimile
signature and/or in counterparts, with each such facsimile signature being
deemed an original and both counterparts, when taken together, constituting one
instrument.

     

    G.           WAIVER OF
JURY TRIAL.  PCT AND CLIENT WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO THIS AGREEMENT.  PCT AND CLIENT AND AGREE THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

     

    H.           No
Circumvention.  Client expressly acknowledges and agrees that
in connection with previous agreements entered into with PCT relating in any
manner to the Premises and the Phase 1 Premises, the Report or other activities
and discussions relating to the Services and pursuant to this Agreement and the
Program, that PCT has or may disclose or introduce the Client to Third Party
providers of various services and supplies.  Such providers include
but are not limited to architects, engineers, environmental experts, etc., each
such provider being referred to in this Agreement as a “Covered Third
Party”.  Unless PCT materially breaches this Agreement, each Client
agrees that for a period ending three (3) years following the Effective Date it
shall not directly or indirectly contact, approach, engage in discussions,
negotiate, contract or enter into agreement or arrangement with any Covered
Third Party or any of Covered Third Party’s employees, officers, agents,
suppliers, directors or owners for the purpose of providing services or supplies
of any kind to the Client at the Site or for the benefit of the Premises without
first obtaining the prior written consent of PCT which consent shall not be
unreasonably withheld or delayed (the payment of a reasonable fee will not be
considered unreasonable).

     

    I. 
          [*]  [Note:  Approximately
one and one-half pages of text is omitted.]

     

    J.  
         Future
Negotiations.  PCT and Client agree, while there is no binding
agreement to do so, that any Phase 2 Program may be effected as a Change Order
to this Agreement.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    NO
FURTHER TEXT ON THIS PAGE – SIGNATURE PAGE FOLLOWS

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    This
Agreement has been executed, under seal, as of the Effective Date.

     

    
      
        	
                PROGENITOR
      CELL THERAPY, LLC

              	 	
                NEOSTEM,
      INC.

              
	 
      	 	 
      
	
                By: 

              	
                /s/ George S. Goldberger

              	 	
                By: 

              	
                 /s/ Robin L. Smith

              
	
                Name:
      George S. Goldberger

              	 	
                Name:  Robin
      L. Smith

              
	
                Title:
      Chief Business Officer

              	 	
                Title:
      Chief Executive Officer

              
	 
      	 	 
      
	 
      	 	
                NEOSTEM
      (CHINA), INC.

              
	 
      	 	 
      
	 
      	 	
                By: 

              	
                /s/ Peter Sun

              
	 
      	 	
                Name:  Peter
      Sun

              
	 
      	 	
                Title:

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
       

      ATTACHMENT A

      TERMS

      

      
        	
                 
      

              	
                The
      following terms shall have the following
  meanings:

              

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    AABB

                                  	 
      	
                                    The
      American Association of Blood Banks and any successor
    thereto.

                                  
	 	 	 
	
                                    Affiliate

                                  	 
      	
                                    With
      respect to any Person, another Person that directly, or indirectly through
      one or more intermediaries, Controls or is Controlled by or is under
      common Control with the Person specified.

                                  
	 	 	 
	
                                    Agreement

                                  	 
      	
                                    The
      Agreement dated the Effective Date between PCT and the Client including
      all attachments thereto, as the Agreement and its attachments may be
      amended and modified from time to time.

                                  
	 	 	 
	
                                    Applicable
      Laws

                                  	 
      	
                                    All
      laws, ordinances, rules, orders and regulations of any foreign, United
      States, state, federal or local governmental or regulatory authority that
      governs the Services or Program including, without limitation, the United
      States  and the People’s Republic of China.

                                  
	 	 	 
	
                                    Change
      Order

                                  	 
      	
                                    Has
      the meaning set forth in Section 10(D) of the
Agreement.

                                  
	 	 	 
	
                                    Claims

                                  	 
      	
                                    Has
      the meaning set forth in Section 8(A) of this
Agreement.

                                  
	 	 	 
	
                                    Client

                                  	 
      	
                                    NeoStem
      and NeoStem China

                                  
	 	 	 
	
                                    Confidentiality
      Agreement

                                  	 
      	
                                    The
      Mutual Nondisclosure Agreement dated October ___, 2008 between NeoStem and
      PCT attached hereto as Attachment E.

                                  
	 	 	 
	
                                    Control

                                  	 
      	
                                    The
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the
      ability to exercise voting power, by contract or
      otherwise.  “Controlled” has the meaning correlative
      thereto.

                                  
	 	 	 
	
                                    Controlled
      Affiliates

                                  	 
      	
                                    A
      person or entity controlled by or under common control with PCT (including
      the individual officers of PCT).  If another person or entity
      acquires control of PCT after the Effective Date, so that more than 50% of
      the voting or equity interests of PCT are no longer owned by the owners of
      PCT immediately prior to that transaction or the board of directors of PCT
      is no longer controlled by the same individuals who controlled the board
      prior to the transaction, then it is understood that the obligations above
      shall only apply to PCT and its Controlled Affiliates and not to the
      acquiring person or
entity.

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Covered
      Third Party

                	 
      	
                  Has
      the meaning set forth in Section 14(H) of this Agreement.  

                
	 
      	 
      	 
      
	
                  Default
      Rate

                	 
      	
                  Has
      the meaning set forth in Section 3(E) of the Agreement.

                
	 
      	 
      	 
      
	
                  Effective
      Date

                	 
      	
                  The
      date set forth at the beginning of the Agreement and defined therein as
      the Effective Date.

                
	 
      	 
      	 
      
	
                  FACT

                	 
      	
                  The
      Foundation for the Accreditation of Cellular Therapy and any successor
      thereto.

                
	 
      	 
      	 
      
	
                  FDA

                	 
      	
                  The
      United States Food and Drug Administration, or any successor agency
      thereto.

                
	 
      	 
      	 
      
	
                  Force
      Majeure

                	 
      	
                  Any
      cause beyond the reasonable control of the party in question which for the
      avoidance of doubt and without prejudice to the generality of the
      foregoing includes governmental actions, wars, riots, terrorism, civil
      commotions, fires, floods, earthquakes, epidemics, pandemics, labor
      disputes (excluding labor disputes involving the work force or any part
      thereof of the party in question), embargoes, trade restrictions,
      restraints or delays affecting shipping or carriers acts of God or nature,
      access restrictions or access refusals of PCT or PCT’s Agents, to the
      People’s Republic of China not caused by any action or omission of PCT or
      PCT’s Agents (whether or resulting from Project Director’s or other PCT
      Agent’s revocation or refusal to have renewed such person’s visa or other
      entry permit to the Republic of China), the Site, the Premises or the
      Phase 1 Premises, the Landlord imposing restrictions restricting or
      refusing access to the Site, Premises and/or Phase 1 Premises, stoppages
      for any reason of the Services by any Regulatory Authority or Third Party
      not in privity, directly or indirectly, with PCT, and prolonged losses of
      one or more utilities to the Premises (with any period of two (2) or more
      days being deemed a prolonged loss).

                
	 
      	 
      	 
      
	
                  GMP

                	 
      	
                  Current
      Good Manufacturing Practice regulations, as set forth in the United States
      Code of Federal Regulations Title 21 (21 C.F.R. §§ 210 and 211) in effect
      on the date of Termination of this Agreement.

                
	 
      	 
      	 
      
	
                  GTP

                	 
      	
                  Current
      Good Tissue Practice regulations, as set forth in the United States Code
      of Federal Regulations Title 21 (21 C.F.R. § 1271 subpart 2) in effect on
      the date of Termination of this
Agreement.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          	
                  Guaranteed
      Maximum Price

                	 
      	
                  A
      compensation structure for the design, construction, installation and/or
      equipment costs provided by a Third Party pursuant to which services,
      equipment and/or materials based upon actual costs incurred in connection
      with such activity and/or procurement process, plus a fee-all component,
      subject to a ceiling, above which a customer is not obligated to
      pay.

                
	 
      	 
      	 
      
	
                  Initial
      Fee Month

                	 
      	
                  Has
      the meaning set forth in Section 3(A)(1)(iii)(x) of this
      Agreement.

                
	 
      	 
      	 
      
	
                  Key
      Personnel

                	 
      	
                  Has
      the meaning set forth in Paragraph (H) of Attachment B of this
      Agreement.

                
	 
      	 
      	 
      
	
                  Landlord

                	 
      	
                  Has
      the meaning set forth in the WHEREAS clauses of this
      Agreement.

                
	 
      	 
      	 
      
	
                  Lease
      Modification

                	 
      	
                  Has
      the meaning set forth in Section 6(C) of this
Agreement.

                
	 
      	 
      	 
      
	
                  Leases

                	 
      	
                  Collectively,
      the various leases and property management contracts entered into or to be
      entered into by NeoStem China with the Tenant and by the Tenant with the
      Landlord for the lease and operation of the Premises.

                
	 
      	 
      	 
      
	
                  NeoStem

                	 
      	
                  NeoStem,
      Inc.

                
	 
      	 
      	 
      
	
                  NeoStem
      China

                	 
      	
                  NeoStem
      (China), Inc.

                
	 
      	 
      	 
      
	
                  PCT

                	 
      	
                  Progenitor
      Cell Therapy, LLC.

                
	 
      	 
      	 
      
	
                  PCT’s
      Agents

                	 
      	
                  Has
      the meaning set forth in Section 8(A) of this
Agreement.

                
	 
      	 
      	 
      
	
                  Person

                	 
      	
                  Any
      natural person, corporation, limited liability company, trust, joint
      venture, association, company, partnership, governmental entity or
      Regulatory  Authority or other entity.

                
	 
      	 
      	 
      
	
                  Phase
      1 Premises

                	 
      	
                  Has
      the meaning set forth in the WHEREAS clauses of this
      Agreement.

                
	 
      	 
      	 
      
	
                  Point of Contact

                	 
      	
                  An
      individual who serves as a party’s point of contact for the other party,
      as further detailed in Section 2 of the Agreement.

                
	 
      	 
      	 
      
	
                  Premises

                	 
      	
                  Has
      the meaning set forth in the WHEREAS clauses of this
      Agreement.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          	
                  Program

                	 
      	
                  (1)
      The phase 1 development of the Phase 1 Premises which includes a clean
      room for adult stem cell clinical trial processing and other stem cell
      collections and which will have the processing capacity (but not the
      storage capacity) on an annual basis, sufficient for at least 10,000
      samples, research and development laboratory space, collection and stem
      cell storage areas, and offices, together with the furnishings and
      equipment selected by Client and PCT for the developed areas (as described
      in the Report) and (2) the installation in the Phase 1 Premises of quality
      control systems consisting of materials management, equipment maintenance
      and calibration, environmental monitoring and compliance and adult stem
      cell processing and preservation, which comply with the Standards in order
      to enable NeoStem China to perform the elements of the Program described
      in (i) above, in each instance, as more particularly provided in the Scope
      of Work/Services set forth in Attachment B of this
    Agreement.

                
	 
      	 
      	 
      
	
                  Program
      Amendment Order

                	 
      	
                  A
      document detailing changes to the Program, which has been agreed to and
      signed by the parties to this Agreement and is in the form attached to and
      made a part of the Agreement as Attachment C to this
      Agreement.

                
	 
      	 
      	 
      
	
                  Project
      Director

                	 
      	
                  George
      S. Goldberger or such other Person that PCT designates, in writing, to the
      Client is acting as the Project Director.

                
	 
      	 
      	 
      
	
                  Project
      Director Trips

                	 
      	
                  Has
      the meaning set forth in Section 3(D) of this
Agreement.

                
	 
      	 
      	 
      
	
                  Regulatory
      Agency

                	 
      	
                  Any
      relevant state, federal or local governmental regulatory authority, within
      or outside of the United States, involved in regulating any aspect of the
      Services.

                
	 
      	 
      	 
      
	
                  Report

                	 
      	
                  The
      report in the form of Attachment D.

                
	 
      	 
      	 
      
	
                  Services

                	 
      	
                  The
      services set forth and more particularly described in Attachment B to the
      Agreement and the Supporting Services.

                
	 
      	 
      	 
      
	
                  Site

                	 
      	
                  Has
      the meaning set forth in the WHEREAS clauses of the
    Agreement.

                
	 
      	 
      	 
      
	
                  Standards

                	 
      	
                  Collectively,
      GMP standards, all regulatory standards that would be applicable in the
      United States for clinical or laboratory services (including GTP, AABB,
      FACT and FDA standards) and all regulatory requirements applicable to the
      Program promulgated by the People’s Republic of China as of the date of
      Termination of this Agreement.

                
	 
      	 
      	 
      
	
                  Start
      Date

                	 
      	
                  April
      1, 2010 or such earlier date as Client, pursuant to a Written Notice to
      PCT, designates is the Start Date, provided, further, that such Written
      Notice shall provide PCT with no less than five (5) business days notice
      of the Start Date.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          	
                  Support
      Services

                	 	
                  The
      delivery by PCT and/or its agents during the initial Support Services
      Period of up to 360 hours of support to the Client as to various aspects
      of the Program in existence and in effect immediately prior to the
      commencement of the Support Services Period.  Such services will
      include updated operating procedures and additional training for Client’s
      personnel beyond that described in Attachment B, repairs and
      maintenance.  Such 360 hours shall be provided by PCT and/or its
      agents and shall include all reasonable maintenance and advisory support
      regarding the Standards, the Services and the Program.  Such 360
      hours shall not include any travel time in connection with traveling to
      and/or from the Premises.  In the event pursuant to Section
      11(D), Client elects to extend the Support Services Period, an additional
      360 hours of support commencing with the extended Support Services Period
      will be provided to the Client.  To the extent that during the
      initial Support Services Period, the Client did not utilize the full 360
      support hours, such remaining and unused hours will not be carried over
      into the extended Support Services Period.  For the purposes of
      clarity, the maximum number of hours in any ninety day Support Services
      Period will not exceed 360 hours.

                
	 
      	 	 
      
	
                  Support
      Services Period

                	 	
                  Ninety
      (90) days, provided, however, in the event, pursuant to Section 11(D), the
      Client extends the initial Support Services Period, the Support Services
      Period shall include an additional ninety (90) day period commencing on
      the date the expiration of the initial Support Services Period
      occurs.

                
	 
      	 	 
      
	
                  Tenant

                	 	
                  Has
      the meaning set forth in the WHEREAS clauses of this
      Agreement.

                
	 
      	 	 
      
	
                  Termination

                	 	
                  Termination
      of the Agreement: (1) upon completion of the Program by satisfactory
      performance of the Services or (2) pursuant to Section 7 of the
      Agreement.

                
	 
      	 	 
      
	
                  Third
      Party

                	 	
                  Any
      Person other than PCT and the Client or their respective
      Affiliates.

                
	 
      	 	 
      
	
                  Uncommitted
      Amount

                	 	
                  Has
      the meaning set forth in Section 7(G) of this
Agreement.

                
	 
      	 	 
      
	
                  Written
      Notice

                	 	
                  A
      written communication or notice sent by a reputable nationally recognized
      overnight courier service.

                

        

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      ATTACHMENT
B

       

      SUMMARY
OF THE CONSTRUCTION AND INSTALLATION AT THE PHASE 1

      PREMISES
(THE “PROGRAM”)

       

      SCOPE
OF WORK/SERVICES

       

      INCLUSIONS

       

      The
following services will be provided by PCT for the construction and installation
of the Program at the Phase 1 Premises and the development of various protocols
to satisfy compliance with various Standards:

       

      
        	
                A.

              	
                Contract
      with architects, engineers, consultants and other professionals, as
      determined by PCT to develop the Program as set forth in the Report (the
      “Facility”) at the Phase 1 Premises substantially in accordance with the
      building layout plan (the “Plan”) attached to the Report which Plan has
      been approved by NeoStem.

              

      

       

      
        	
                B.

              	
                Using
      readily available building materials, arrange for the demolition, as
      required, and construction of the Facility at the Phase 1 Premises
      substantially in accordance with the Plan and the Report and (1) within
      the estimated budget (the “Budget”) as set forth in Attachment F as the
      Budget may be adjusted as provided in the Agreement and (2) the estimated
      timelines set forth in Attachment G, as such timelines may be adjusted as
      provided in the Agreement.  The applicable timeline(s) commence
      on the Effective Date.

              

      

       

      
        	
                C.

              	
                Assist
      and arrange for the procurement and purchase of Laboratory and Equipment
      as provided in the Budget and in accordance with the
      Agreement.  Assist and arrange for such production, quality
      control testing, materials control and storage operations at the Facility
      in compliance with the Plan and the Budget. PCT will arrange for the
      procurement, purchase, shipping, installation, permitting and other
      approval requirements for utilization of such equipment, machinery,
      systems and utilities as required by the Program at the
      Facility.

              

      

       

      
        	
                D.

              	
                In
      connection with the construction and installation of the Facility at the
      Phase 1 Premises, determine and timely satisfy all appropriate
      construction, installation and permit requirements necessary for the
      completion and operation of the Facility, which services will include, but
      not be limited to, contracting with local experts to arrange for necessary
      permits relating to operations at and construction of the Facility and the
      installation and construction of the Program and will include satisfying
      local Applicable Laws such as obtaining Local Design Institute oversight
      and approval, if any, and an Environment Impact Assessment, if any, prior
      to obtaining construction permit
approvals.

              

      

       

      
        	
                E.

              	
                Provide
      necessary documentation and filing relating to the Facility and Program to
      satisfy, as determined by PCT, the Standards and analogous Standards in
      the People’s Republic of China relating to such Facility’s operations as
      of the Termination of this Agreement.  Appropriate local
      regulatory experts will be employed to assess the required permits and
      documentation and to assist with appropriate application
      processes.

              

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        	
                F.

              	
                Complete
      and provide requisite validation/qualification protocols for the systems,
      utilities and equipment at the Facility, including the one clean room, as
      shown in the Plan, and the analytical instrumentation in the laboratory as
      outlined in the Budget, which protocols will commence to be developed upon
      completion of the construction of Facility and installation of all
      equipment, systems, utilities and machinery and which will encompass
      installation qualification (“IQ”), operational qualification (“OQ”) and,
      as necessary, performance qualification (“PQ”) of the Facility, equipment,
      systems and utilities.

              

      

       

      
        	
                G.

              	
                Develop
      and deliver IQ, OQ and PQ protocols for the systems, utility services and
      equipment and machinery at the
Facility.

              

      

       

      
        	
                H.

              	
                Provided
      Key Personnel (as defined below) are, at the time of PCT’s proposed
      training, which shall occur no earlier than the month prior to the
      commencement of the initial Support Services Period, PCT will provide
      sufficient training (as reasonably determined by PCT) to a competent and
      experience Quality Control Manager, Plant Manager and a
      Manufacturing/Facility Manager (or similarly titled individuals)
      (collectively, “Key Personnel”) (with such competency and experience to be
      subject to the reasonable determination of all parties) as to the various
      standard operating procedures necessary to operate the facility which is
      the result of the Program in accordance with and in compliance with the
      Standards.  In the event all Key Personnel are not reasonably
      available for training at the Phase 1 Premises, as mutually agreed by the
      parties, PCT will not have any additional obligation to provide additional
      training for such missing Key Personnel.  Such training will be
      in English and require such Key Personnel to be fully conversant and able
      to read and write in the English
language.

              

      

       

      
        	
                I.

              	
                Develop
      and deliver final reports for executed validation/qualification protocols
      for systems, utility services and equipment and machinery at the
      Facility.

              

      

       

      EXCLUSIONS:

       

      The
Services do not include
the following:

       

      
        	
                 
      

              	
                1.

              	
                The
      cost and expenses described in Section 3(C) of the Agreement or the
      reimbursable expenses in connection with the Support
      Services.  These costs will be invoiced separately by PCT to
      Client as provided in this
Agreement.

              

      

       

      
        	
                 
      

              	
                2.

              	
                Provision
      of test methods and procedures beyond those detailed above or necessary to
      be compliant with the Standards.

              

      

       

      
        	
                 
      

              	
                3.

              	
                Regulatory
      services beyond those necessary to provide the Services in connection with
      the Program and the Standards.

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Attachment
C

      

      Program
Amendment Order

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  (1)           Program
      Title & Number:

                                                	
                                                  (2)           Date
      Program Started:

                                                	
                                                  (3)           P.A.O.
      Number:

                                                   

                                                
	
                                                  (4)           Reason
      for P.A.O.

                                                   

                                                   

                                                   

                                                
	
                                                  (5)           Amendment
      required and new milestones

                                                   

                                                   

                                                   

                                                   

                                                
	
                                                  (6)           Impact
      on price, time frame, resources:

                                                   

                                                   

                                                   

                                                   

                                                
	
                                                  (7)           Amended payment schedule (if
      required):

                                                   

                                                   

                                                   

                                                   

                                                
	 Authorization	 
      	 
      	 
      
	 
      	
                                                      

                                                	 
      	 
      	
                                                      

                                                
	
                                                   Date:

                                                	
                                                  ____________________     

                                                	 
      	
                                                  Date:

                                                	
                                                  ____________________    

                                                
	
                                                   for
      PCT

                                                	 
      	
                                                  for
      Client

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

      

       

      Attachment
D – Report

      

      See
Attached.

      

      [*]
[Note:  Nine pages comprising the report have been
omitted.]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Attachment E - Confidentiality
Agreement

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      ]

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Attachment
F

       

      COST
ESTIMATES FOR DEVELOPMENT OF PHASE 1 PREMISES.

       

      SEE
ATTACHED

       

      [*]
[Note:  Two pages of text have been omitted.]

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Attachment
G

       

      ESTIMATED
TIMELINE FOR DEVELOPMENT OF PHASE 1 PREMISES.

       

      

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Attachment
H

       

      CLIENT
CONTACTS IN CHINA.

      

      [*]

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Attachment
I

       

      MILESTONES

       

      
        	
                A) 
      

              	
                Upon
      completion of the Design for construction documents, the Client will pay
      [*].

              

      

      
        	
                B) 
      

              	
                Upon
      the completion of fifty percent (50%) of the major construction at the
      Phase 1 Premises in accordance with the Program and this Agreement,
      including the full completion of the clean room, offices, and laboratory,
      the Client will pay [*].

              

      

      
        	
                C) 
      

              	
                Upon
      completion of ninety nine (99%) of the major construction and the delivery
      to the Client of a certificate of occupancy (or similar certificate)
      allowing the Client to use and occupy the Phase 1 Premises, the Client
      will pay [*].

              

      

      
        	
                D) 
      

              	
                Upon
      the completion of the installation, commissioning and validation of all
      equipment, including Laboratory equipment, the Client will pay [*].

              

      

      
        	
                E) 
      

              	
                Upon
      the delivery by PCT of the remaining items required to be delivered to the
      Client pursuant to the second sentence of Section 11(C) of the Agreement
      upon the Program being completed, and the completion of all Services
      (excluding Support Services) as set forth in Attachment B, the Client will
      pay [*].EXHIBIT
10.1

     

    Summary
of Outside Directors’ Compensation

     

     

    Our
non-employee directors are entitled to receive the following
compensation:

     

    
      	
               
      

            	
              ·

            	
              an
      annual retainer of $42,000 per director for service on our
      Board;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      fee for attendance at Board meetings of $2,000 per
  meeting;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      fee for attendance at Board Committee meetings of $1,700 per
      meeting;

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      annual retainer of $10,000 for the Chairman of the Audit Committee and an
      annual retainer of $5,000 for the Chairman of each of the Compensation
      Committee and the  Nominating and Corporate Governance
      Committee; and

            

    

     

    
      	
               
      

            	
              ·

            	
              upon
      each director's election or re-election to our Board at the annual
      shareholders meeting, a restricted stock award per director consisting of
      such number of shares having an aggregate fair market value of $80,000 on
      the date of grant; 50% of these shares vest on the first anniversary of
      the date of grant and 50% vest on the second anniversary of the date of
      grant.

            

    

     

    Directors’
cash compensation is paid quarterly in arrears.  The cash compensation
of directors who serve less than a full quarter is pro-rated for the number of
days actually served.  Directors who are appointed between annual
shareholders meetings receive a pro-rated equity award upon appointment to our
Board.  In addition, we reimburse our non-employee directors for
reasonable out-of-pocket expenses incurred in connection with attending
in-person board or committee meetings and for fees incurred in attending
continuing education courses for directors that are approved in advance by the
company.

     

    The
standing committees of the Board of Directors currently are the Audit,
Compensation, and Nominating and Corporate Governance Committees.

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