Document:

Employment Agreement

 EXHIBIT 10.257 
 Portions of the exhibit marked [*] are requested to be treated confidentially. 
 EMPLOYMENT AGREEMENT 

 THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into on this 1st day of April, 2008 (the “Effective
Date”), by and between PPD Development, LP, a Texas limited partnership (the “Company”), with a mailing address for notice purposes of 929 North Front Street, Wilmington, North Carolina 28401, Attention: William J. Sharbaugh, and
Michael O. Wilkinson (“Employee”), an individual whose mailing address for notice purposes is 929 North Front Street, Wilmington, North Carolina 28401. 
 RECITALS 
 A. The Company is a clinical research organization engaged in the business of providing
drug discovery and development services to pharmaceutical, biotechnology, medical device, government and academic organizations throughout the world (the “Business”). 
 B. The Company desires to employ Employee and Employee desires to be employed by the Company, all upon the terms and conditions set forth herein.

 NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants of the parties hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 ARTICLE
1 
 EMPLOYMENT AND DUTIES 
 1.1 Employment of Employee. On the Effective Date, the Company agrees to employ Employee and Employee accepts such employment pursuant and subject to the terms and conditions of this Agreement. 
 1.2. Duties and Powers. During the Employment Period (as defined herein), Employee shall serve as Executive Vice President of Global Clinical
Operations of the Company and will have such responsibilities, duties and authority, and will render such services for and in connection with the Company and its affiliates as are customary in such position and as the general partner of the Company
and the Chief Operating Officer of Pharmaceutical Product Development, Inc. (“PPD”) shall from time to time reasonably direct. Employee shall devote Employee’s full business time and attention exclusively to the Business of the
Company and shall use best efforts to faithfully carry out Employee’s duties and responsibilities hereunder. Employee shall comply with all personnel policies and procedures of the Company and PPD as the same now exist or may be hereafter
implemented from time to time, including those policies contained in 

 
PPD’s employee manual or handbook which sets forth policies and procedures generally for employees of PPD and its subsidiaries and affiliates (the
“Handbook”) to the extent not inconsistent with this Agreement. 
 ARTICLE 2 
 TERM OF EMPLOYMENT 
 Unless sooner terminated as provided elsewhere in this
Agreement, Employee’s employment under this Agreement shall begin the Effective Date and end at 11:59 p.m. Eastern Time on March 31, 2009 (“Initial Employment Period”). This Agreement shall automatically renew for successive
one-year periods, unless either the Company or Employee provides written notice to the other at least sixty (60) days prior to the termination of the Initial Employment Period or any renewal period stating said party’s desire to terminate
this Agreement. The Initial Employment Period and any extension or renewal thereof shall be referred to herein together as the “Employment Period”. Notwithstanding anything to the contrary contained herein, the Employment Period is subject
to termination pursuant to Article 4 hereof. 
 ARTICLE 3 
 COMPENSATION AND BENEFITS 
 3.1 Base Salary. The Company will pay Employee an annual base
salary at a rate of $275,000 per annum (the “Base Salary”), payable in accordance with the Company’s regular payroll policy for salaried employees. The Base Salary of Employee may be subject to increase annually during the Employment
Period by the Company. If the Employment Period is terminated pursuant to Article 4 hereof or is otherwise shorter than a full contract year, then the Base Salary for any partial year will be prorated based on the number of days elapsed in such year
during which services were actually performed by Employee. 
 3.2 Benefits. 
 a. During the Employment Period, Employee shall be eligible to participate in and/or receive benefits under the health insurance, group term
life/AD&D, short and long-term disability, retirement, paid-time off and other plans maintained from time to time by the Company, subject in each instance to Employee meeting all eligibility and qualification requirements of such plans. During
the Employment Period, Employee shall be entitled to twenty-seven (27) days of paid-time-off, subject to the provisions of the Handbook. 
 b. In addition to the benefits provided in (a) above, during the Employment Period, Employee shall be entitled to participate in (i) the employee incentive compensation plan maintained for employees of the Company, as the same may
be amended from time to time (the “Incentive Compensation Plan”), and (ii) the 1995 Equity Compensation Plan maintained by PPD, as the same has been and may be amended from time to time, or any successor plan (the “ECP”),
subject in each instance to Employee meeting all eligibility and qualification requirements of such plans. 

 3.3 Expenses. The Company will reimburse Employee, in accordance with and subject to
Employee’s compliance with the Company’s policy, for Employee’s necessary and reasonable out-of-pocket expenses incurred in the course of performance of Employee’s duties hereunder. All reimbursement of expenses to Employee
hereunder shall be conditioned upon presentation of sufficient documentation evidencing such expenses. 
 3.4 Working Facilities.
Employee shall work out of the Company’s principal offices in Wilmington, North Carolina. The Company shall furnish Employee with such office space, equipment, technical, secretarial and clerical assistance and such other facilities, services
and supplies as shall be reasonably necessary to enable Employee to perform the duties required of Employee hereunder in an efficient and professional manner. 
 3.5 Bonus. Within thirty (30) days of the execution of this Agreement and subject to Employee executing the Company’s standard two-year bonus payback agreement, the Company will pay Employee a cash
bonus in an amount equal to $50,000, less all withholdings required by applicable federal, state and local laws, rules and regulations. 
 ARTICLE 4 
 TERMINATION OF EMPLOYMENT 
 4.1 Basis for Termination. Notwithstanding any other provision in this Agreement to the contrary, the Employment Period and Employee’s employment hereunder shall terminate effective on the date indicated
upon the happening of any of the following events: 
 a. Upon the death of Employee, effective immediately on the date of death without any
notice; 
 b. Upon a determination by the Chief Operating Officer of PPD, acting in good faith and not in an arbitrary or capricious manner,
but made in his sole discretion, that Employee has become physically or mentally incapacitated, as determined under PPD’s short-term disability policy, and is unable to perform his duties under this Agreement as a result of such disability,
which inability continues for a period of sixty (60) days during any twelve-month period hereunder, effective upon the date said determination is communicated to Employee or such later date as specified by the Chief Operating Officer of PPD; or

 c. Upon a determination by the Chief Operating Officer of PPD, acting in good faith but made in his sole discretion, that Employee:
(i) has failed to substantially perform his duties under or otherwise breached any of the material terms of 

 
this Agreement; (ii) has demonstrated negligence or willful misconduct in the execution of his duties; or (iii) has been convicted of a felony; in
each case effective upon the date said determination is communicated to Employee or such later date as specified by the Chief Operating Officer of PPD. 
 4.2 Compensation After Termination During Employment Period. If the Company terminates Employee’s employment during the Employment Period pursuant to Section 4.1 hereof or if either party terminates
this Agreement pursuant to Article 2 hereof, then the Company shall have no further obligations hereunder or otherwise with respect to Employee’s employment from and after the termination or expiration date, except that the Company shall pay
Employee’s Base Salary accrued through the date of termination or expiration, as the case may be, and shall provide such benefits as are required by applicable law. From and after such termination or expiration date, the Company shall continue
to have all other rights available hereunder, including without limitation all rights under Article 5 hereof, the Proprietary Agreement, and at law or in equity. 
 ARTICLE 5 
 PROPRIETARY INFORMATION 
 Prior to or coincident with the commencement date of this Agreement, Employee shall execute and deliver to the Company its standard Proprietary
Information and Inventions Agreement (the “Proprietary Agreement”), a copy of which is attached hereto as Annex A. 
 ARTICLE
6 
 NON-COMPETITION COVENANT 
 6.1 Non-Competition Covenant. Beginning on the Effective Date and continuing for a period of [*] following the effective date of the termination (the “Termination Date”) of Employee’s employment with the Company for
any reason, including, without limitation, termination pursuant to Article 2 hereof (the “Non-Competition Period”), Employee will not (other than for the direct and sole benefit of the Company pursuant to this Agreement), directly or
indirectly, either as an individual or as a director, executive officer, senior management officer, consultant, partner, joint venturer, or equity owner of any person, firm, corporation, partnership, limited liability company, trust or other
business entity, engage in an activity that is in substantial competition with the Business of the Company in any location in the world. Notwithstanding the foregoing, the Company agrees that (i) this Section 6.1 shall not prohibit
Employee from working for a pharmaceutical, biotechnology or medical device organization that is not a clinical research organization or otherwise competing with the Business by providing drug discovery or development services to third parties on a
fee for service basis, (ii) this Section 6.1 shall not prohibit Employee from working for a clinical research organization in a position that is (A) below the level of vice president (or other comparable position or title) and
(B) and not responsible for the performance of executive or senior management responsibilities, and (iii) that Employee may own up to 
  
  

	[*]	Confidential treatment requested; certain information omitted and filed separately with the SEC. 

 
two percent (2%) of the outstanding voting securities of any publicly-traded company that is engaged in a business activity prohibited by this
Section 6.1 so long as the Employee does not otherwise participate in such business in any way prohibited by this Section 6.1. 
 6.2 Reasonableness of Restrictions; Reformation. Employee acknowledges and agrees that the Company conducts the Business and services clients of the Business throughout the world, and that its ability to do so is not based on its
geographic location. In addition, Employee acknowledges and agrees that the geographic scope of the non-competition covenants in Section 6.1 above are reasonable and no broader than necessary to protect the legitimate business interests of the
Company and its affiliates, as applicable. Employee further acknowledges and agrees that the scope of the prohibited activities and time duration in this Article 6 are reasonable in nature, are no broader than necessary to protect the legitimate
business interests of the Company and its affiliates, and that irreparable injury will result to the Company or its affiliates if the Employee breaches the provisions of this Article 6. Therefore, if Employee breaches any of the provisions of this
Article 6, notwithstanding any other provision of this Agreement to the contrary, the Company shall be entitled to immediate temporary injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages,
subject to hearing as soon thereafter as possible. Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach by Employee, including the recovery of any damages which it is
able to prove. If a court of competent jurisdiction determines that any portion of this Article 6 is invalid or unenforceable, the remainder of this Article 6 shall not thereby be affected and shall be given full effect without regard to the invalid
provisions. If any court of competent jurisdiction construes any of the provisions of this Article 6, or any part thereof, to be unreasonable because of the duration or scope of such provision, such court shall have the power to reduce the duration
or scope of such provision and to enforce such provision as so reduced. 
 6.3 Jurisdiction and Venue. The parties agree that the
United States District Court for the Eastern District of North Carolina (sitting in Wilmington, North Carolina) shall have exclusive jurisdiction to enforce the covenants under this Article 6 and to otherwise resolve any disputes or controversies
under this Article 6. If such court lacks jurisdiction over any such proceeding, the parties agree that the North Carolina Superior Court in New Hanover County, North Carolina shall have exclusive jurisdiction to enforce the covenants under this
Article 6 and to otherwise resolve any disputes or controversies under this Article 6. The parties agree that venue in either of such courts is proper and waive any claims and/or defenses based on improper venue. 
 ARTICLE 7 
 MISCELLANEOUS 
 7.1 Withholding Taxes. All amounts payable under this Agreement, whether such payment is to be made in cash or other property, shall be subject to
applicable withholding requirements for Federal, state and local income taxes, 

 
employment and payroll taxes, and other legally required withholding taxes and contributions to the extent appropriate in the determination of the Company,
and Employee shall report all such amounts as ordinary income on Employee’s personal income returns and for all other purposes. 
 7.2
Assignment. No party hereto may assign or delegate any of its rights or obligations hereunder without the prior written consent of the other party hereto; provided, however, that the Company shall have the right to assign all or any part of
its rights and obligations under this Agreement (i) to any limited or general partner, subsidiary or affiliate of the Company or any surviving entity following any merger or consolidation of any of those entities with any entity other than the
Company, or (ii) in connection with the sale of the Business by the Company. 
 7.3 Binding Effect. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall be binding upon and inure to the benefit of the respective legal representatives, heirs, successors and permitted assigns of the parties hereto. 
 7.4 Entire Agreement. This Agreement sets forth the entire understanding of the parties and supersedes and preempts all prior oral or written
understandings and agreements with respect to the subject matter hereof. The Employment Agreement dated September 27, 2007 by and between the Company and Employee is terminated in its entirety as of the Effective Date and neither party thereto
shall have any rights, liabilities or obligations thereunder from and after the Effective Date. 
 7.5 Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 
 7.6
Amendment; Modification. No amendment or modification of this Agreement and no waiver by any party of the breach of any covenant contained herein shall be binding unless executed in writing by the party against whom enforcement of such
amendment, modification or waiver is sought. No waiver shall be deemed a continuing waiver or a waiver in respect of any subsequent breach or default, either of a similar or different nature, unless expressly so stated in writing. 
 7.7 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina,
without giving effect to provisions thereof regarding conflict of laws. 
 7.8 Arbitration. Except for disputes, controversies or
claims under Article 6 and the Proprietary Agreement, any dispute, controversy or claim arising out of or relating to this Agreement, including but not limited to its existence, validity, 

 
interpretation, performance or non-performance or breach, shall be decided by a single neutral arbitrator agreed upon by the parties hereto in Wilmington,
North Carolina in binding arbitration pursuant to the commercial arbitration rules of the American Arbitration Association then in effect. The parties to any such arbitration shall be limited to the parties to this Agreement or any successor
thereof. The written decision of the arbitrator shall be final and binding and may be entered and enforced in any court of competent jurisdiction. Each party waives any right to a jury trial in any such forum. Each party to the arbitration shall pay
its fees and expenses, unless otherwise determined by the arbitrator. 
 7.9 Notices. All notices, demands or other communications to
be given or delivered hereunder or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been properly served if (a) delivered personally, (b) delivered by a recognized overnight courier service,
(c) sent by certified mail, return receipt requested and first class postage prepaid, or (d) sent by facsimile transmission followed by a confirmation copy delivered by a recognized overnight courier service the next day. Such notices,
demands and other communications shall be sent to the address first set forth above, or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Date of service
of such notice shall be (i) the date such notice is personally delivered or sent by facsimile transmission (with issuance by the transmitting machine of a confirmation of successful transmission), (ii) the date of receipt if sent by
certified mail, or (iii) the date of receipt if sent by overnight courier. 
 7.10 Counterparts. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement. 
 7.11 Descriptive Heading; Interpretation. The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 
  

					
	COMPANY:	 	PPD Development, LP
			
		 	By:	 	PPD GP, LLC
		 	Its:	 	General Partner
			
		 	By:	 	 /s/ William Sharbaugh

		 	Name:	 	William Sharbaugh
		 	Title:	 	Chief Operating Officer
		
	EMPLOYEE:	 	 /s/ Michael O. Wilkinson

		 	Michael O. Wilkinson

 ANNEX A 
 PROPRIETARY INFORMATION 
 AND INVENTIONS AGREEMENT 
 In consideration and as a condition of my employment by PPD Development, LP, a Texas limited partnership, or any parent, affiliate, subsidiary, successor
or assigns, as the case may be (collectively referred to herein as the “Company”), I hereby agree as follows: 
 1.
“Proprietary Information” is information that was or is developed by, became or becomes known by, or was or is assigned or otherwise conveyed to the Company, and which has commercial value in the Company’s business. Proprietary
Information includes, without limitation, trade secrets, financial information, product plans, customer lists, marketing plans and strategies, systems, manuals, forecasts and other business information, improvements, inventions, business strategies,
business methods and practices, formulas, product ideas, biological material and techniques for their handling and use, chemical and/or information analysis and related products and data, computer programs and software, software designs and
documentation, source codes, algorithms, techniques, schematics, know-how and data, and any other confidential or proprietary information of the Company or its customers or clients which I have been, or may be exposed to, or have learned or may
learn of from time to time in connection with or as a result of my capacity as an employee of or consultant to the Company, including during the term of this Agreement. Proprietary Information shall not include information that is, through no
improper action or inaction by me, generally available to the public. I understand that my employment creates a relationship of confidence and trust between me and the Company with respect to Proprietary Information of the Company or its customers
which may be learned by me during the period of my employment. 
 2. In consideration of my employment by the Company and the compensation
received by me from the Company from time to time, I hereby agree as follows: 
 (a) All Proprietary Information and all patents, copyrights,
trade secret rights and other rights (including throughout, without limitation, any extensions, renewals, continuations or divisions of any of the foregoing) in connection therewith shall be the sole property of the Company. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information. At all times, both during my employment by the Company and after its termination, I will keep in confidence and trust and will not use or disclose any Proprietary Information
or anything relating to it without the written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company. 
 (b) In the event of the termination of my employment by me or by the Company for any reason, I shall return all documents, records, apparatus, equipment and 

 
other physical property, or any reproduction of such property, whether or not pertaining to Proprietary Information, furnished to me by the Company or
produced by myself or others in connection with my employment, to the Company immediately as and when requested by the Company. 
 (c) I will
promptly disclose to the Company, or any persons designated by it, all “Inventions”, which includes all improvements, inventions, formulas, ideas, works of authorship, processes, computer programs and software, software designs and
documentation, algorithms, techniques, schematics, know-how data, whether or not patentable, made or conceived or reduced to practice or developed by me, either alone or jointly with others, during the term of my employment and for six
(6) months thereafter. To the extent the Company does not have rights therein hereunder, such disclosure shall be received by the Company in confidence and does not extend the assignment made in Section (e) below. 
 (d) During the term of my employment and for [*] thereafter, I will not encourage or solicit any employee of the Company to leave the Company for any
reason or to devote less than all of any such employee’s efforts to the affairs of the Company, provided that the foregoing shall not affect any responsibility I may have as an employee of the Company with respect to the bona fide hiring and
firing of Company personnel. 
 (e) During the term of my employment and for a period of [*] thereafter, I will not directly or indirectly
solicit the business of any client or customer of the Company which I have solicited, negotiated, contracted, serviced or had contact with on the Company’s behalf for [*] period prior to the termination of my employment, whether voluntary or
involuntary and with or without cause. 
 (f) I agree that all Inventions which I make, conceive, reduce to practice or develop (in whole or
in part, either alone or jointly with others) during my employment shall be the sole property of the Company to the maximum extent permitted by law, and, to the extent permitted by law, shall be “works made for hire”. The Company shall be
the sole owner of all patents, copyrights, trade secret rights, and other intellectual property or other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I agree to perform, during
and after my employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company’s expense, in obtaining and enforcing patents, copyrights, trade secret rights or other rights on such Inventions and/or any
other Inventions I have or may at any time assign to the Company in any and all countries. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. With respect to any and all matters
arising out of or relating to my employment or consultancy with the Company, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents, as my agents and attorneys-in-fact to act for and in my behalf and
instead of me, to execute and file any applications or related filings and do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, trade secret rights or other rights thereon with the same legal force and
effect as if executed by me. 
  
  

	[*]	Confidential treatment requested; certain information omitted and filed separately with the SEC. 

 (g) I attach hereto a complete list of all Inventions or improvements to which I claim ownership and/or
that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is attached to this Agreement I represent that I have no such Inventions and improvements at the time of signing this Agreement.
I understand that any such list shall not contain information that breaches an obligation of confidentiality with a former employer. 
 (h) I
represent that my performance of all the terms of this Agreement will not breach any agreement or obligation to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith or in conflict with my employment with the Company. 
 3. The Company agrees that it will not request as part of my employment that I divulge or make use of proprietary information of any of my former employers that has commercial value to the former employer who
developed such information. 
 4. I acknowledge that in the event of my breach or threatened breach of the terms of this Agreement, the
Company shall not have an adequate remedy at law and shall, in addition to any other available rights and remedies, have the right to obtain injunctive relief, including without limitation specific performance. 
 5. This Agreement shall be effective as of the first day of my employment by the Company, and shall be binding upon me, my heirs, executors, assigns, and
administrators, and shall inure to the benefit of the Company and any current and future affiliates, subsidiaries, successors and assigns. This Agreement supersedes any agreement which may have been previously made or executed by me relating to this
matter. This Agreement shall be governed by the laws of the State of North Carolina (exclusive of conflicts of law provisions), which shall be the venue for resolution of any dispute related to this Agreement. This Agreement or any part thereof
shall not be modified, amended, or waived except by the written consent of a duly authorized officer or agent of the Company. 
 Dated:
March 31, 2008 
  

					
		 	 /s/ Michael O. Wilkinson

		 	Name:	 	Michael O. Wilkinson

 Accepted and Agreed to: 
 Company 
  

					
		 	By:	 	 /s/ William Sharbaugh

		 	Name:	 	William Sharbaugh
		 	Title:	 	Chief Operating OfficerJoint Venture Contract between Shijiazhuang Pharmacital Group Company, Ltd

 EXHIBIT 10.1 
 JOINT VENTURE CONTRACT 
 on the establishment of 
 “SHIJIAZHUANG – UNIGENE PHARMACEUTICAL CORPORATION LIMITED” 
 between 
 Shijiazhuang Pharmaceutical Group Company, Ltd. 
 And 
 Unigene Laboratories, Inc. 

June 15, 2000 

 TABLE OF CONTENTS 
  

			
	 Chapter I GENERAL PROVISIONS
	  	2
	 Chapter II CONTRACTING PARTIES
	  	2
	 Chapter III ESTABLISHMENT OF THE JOINT VENTURE
	  	2
	 Chapter IV PURPOSE, SCOPE AND SCALE OF OPERATION
	  	3
	 Chapter V TOTAL INVESTMENT AND REGISTERED CAPITAL
	  	4
	 Chapter VI RESPONSIBILITIES OF CONTRACT PARTIES
	  	6
	 Chapter VII TECHNOLOGY CONTRIBUTION
	  	7
	 Chapter VIII SALES OF PRODUCTS
	  	9
	 Chapter IX BOARD OF DIRECTORS
	  	10
	 Chapter X MANAGEMENT ORGANIZATION
	  	12
	 Chapter XI PURCHASE OF EQUIPMENT
	  	12
	 Chapter XII MANAGEMENT OF LABOR
	  	12
	 Chapter XIII TRANSFER OF JV RIGHTS
	  	13
	 Chapter XIV TAXATION, ACCOUNTING AND AUDITING
	  	14
	 Chapter XV PROFITS AND LOSSES
	  	15
	 Chapter XVI REPRESENTATIONS, WARRANTIES AND COVENANTS
	  	15
	 Chapter XVII TERM OF JOINT VENTURE CONTRACT
	  	16
	 Chapter XVIII EFFECT OF CONTRACT EXPIRATION OR TERMINATION
	  	16
	 Chapter XIX INSURANCE
	  	17
	 Chapter XX CONTRACT AMENDMENT, ALTERATION AND TERMINATION
	  	17
	 Chapter XXI RESPONSIBILITIES OF CONTRACT BREACH
	  	18
	 Chapter XXII FORCE MAJEURE
	  	19
	 Chapter XXIII APPLICABLE LAWS
	  	19
	 Chapter XXIV RESOLUTION OF DISPUTES
	  	19
	 Chapter XXV LANGUAGES
	  	19
	 Chapter XXVI MISCELLANEOUS
	  	19

  

 Chapter I GENERAL PROVISIONS 
 This contract for the establishment of an equity joint venture in Shijiazhuang, Hebei Province, People’s Republic of China (the “PRC”), is entered into on June 15, 2000, through friendly
negotiation based on principles of equality and mutual benefits, by and between Shijiazhuang Pharmaceutical Group Company, Ltd.(“Party A”) and Unigene Laboratories, Inc.(“Party B”) pursuant to the Law of the PRC on Joint Ventures
Using Chinese and Foreign Investment (the “Law”) and other relevant laws and regulations. 
 Chapter II CONTRACTING PARTIES 

 ARTICLE 1. Parties to the Contract 
 1.1. Party A is
Shijiazhuang Pharmaceutical Group Company, Ltd., a legal person established under the laws of the PRC, registered with the Administrative Bureau for Industry and Commerce of Shijiazhuang, Hebei Province, PRC. 
 Legal Address: 276 Zhongshan West Road Shijiazhuang, Hebei Province, PRC 
 Legal Representative: Mr. Cai Dong Chen 
 Position: Chairman and President 
 Nationality: Chinese 
 1.2. Party B is Unigene Laboratories, Inc., established and registered under the laws of the
State of Delaware, United States of America (USA). 
 Legal Address: 110 Little Falls Road, Fairfield, New Jersey, 07004, USA, 
 Legal Representative: Dr. Warren P. Levy 
 Position: President

 Nationality: American 
 1.3. Party A and Party B are each
referred to as a “JV Party” and collectively referred to as the “JV Parties”. 
 Chapter III ESTABLISHMENT OF THE JOINT
VENTURE 
 ARTICLE 2. Establishment of JV 
 Party A and Party
B hereby establish “Shijiazhuang—Unigene Pharmaceutical Corporation Limited” (hereafter referred to as the “JV”) in the PRC pursuant to this Contract, the Law and other relevant PRC laws and regulations. 
 ARTICLE 3. Name and Address of the JV 
 3.1 The name of the JV in Chinese is
“                                       
 ”; and the name of the JV in English is “Shijiazhuang—Unigene Pharmaceutical Corporation Limited.” 
  

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 3.2 The JV’s legal address is High and New Technology Industrial Development Zone, Shijiazhuang, Hebei Province.

 ARTICLE 4. The JV is established under the Law of the PRC and all activities of the JV shall conform to the pertinent laws, decrees, rules and regulations
of the PRC. 
 ARTICLE 5. The JV takes the form of a limited liability company. Party A and Party B are liable up to amount of their respective capital
contribution subscribed. Each party is entitled to the profits and liable to the risks and losses equivalent to such party’s Distribution Ratio (as defined below), as set forth in Article 56. 
 ARTICLE 6. The JV shall be deemed to have been established as of the date its business license is issued pursuant to the Law (the “Establishment Date”). This
Contract shall be effective as of the date it is approved by the National Administration of High and New Technology Industrial Development Zone, Shijiazhuang, Hebei Province (the “Effective Date”). 
 ARTICLE 7. Promptly following the Establishment Date, the parties hereto shall cause the JV to ratify this Contract, whereby the JV shall agree to be bound by the
provisions of this Contract as if it were a party hereto in its own right. An instrument evidencing such ratification shall be furnished to each of the parties. 
 ARTICLE 8. The JV Parties hereby adopt and shall execute the Articles of Association for the JV. 
 ARTICLE 9. Promptly after the first capital
contributions required by Article 15.1(a) and 15.2(a) have been made by each party, the JV and Party B shall execute a Technology Transfer Agreement (the “Technology Transfer Agreement”) pursuant to which Party B will (a) license the
Technology to the JV (as defined in the Technology Transfer Agreement); (b) agree to sell to the JV its requirements of AE (as defined below); and (c) agree to sell to the JV its requirements of JV Products and bulk Calcitonin until such
time as the JV can manufacture such JV Products and Calcitonin at the JV Facility, all in accordance with the terms and conditions of the Technology Transfer Agreement. 
 Chapter IV PURPOSE, SCOPE AND SCALE OF OPERATION 
 ARTICLE 10. In the spirit of strengthening economic cooperation
and technological exchanges, the purpose of the JV is to use advanced technology and scientific operational management expertise to carry out the manufacture of pharmaceutical-grade recombinant salmon calcitonin (the “Calcitonin”) in
injectable and nasal formulations (the “JV Products”), using the processes of Party B that include the use of an amidating enzyme that the JV will purchase from Party B (the “AE”) in accordance with the Technology Transfer
Agreement, and the distribution and sale of JV Products in the PRC and such other regions as decided by the Board of Directors of the JV (the “Territory”) in order to obtain a satisfactory return on investment for all parties and to build
up competitiveness in both domestic and international markets (collectively, the “JV Business”). 
 ARTICLE 11. The business scope of the JV is
(a) to construct, equip, own, manage, and operate a manufacturing facility in the PRC that complies with all regulations and guidelines applicable 

  

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to such a manufacturing facility (“Applicable Regulations”) and that has the capacity to manufacture Calcitonin in accordance with the terms and
conditions of the Contract (the “JV Facility”) and prepare, fill, label and package injectable and nasal formulations thereof; and (b) to market, distribute and sell the JV Products in the Territory. 
 ARTICLE 12. In order to fully utilize the time necessary for construction of the JV Facility and nurture the market for the JV Products, the production and operation of
the JV shall be carried out in two (2) phases, which are as follows: 
 Phase I: The JV shall import finished JV Products from Party B and package and
distribute, market and sell such JV Products in the PRC and shall import bulk Calcitonin from Party B, formulate JV Products therefrom, and distribute, market and sell such JV Products in the Territory. 
 Phase II: The JV shall import AE from Party B and manufacture bulk Calcitonin therefrom, formulate JV Products therefrom, and distribute, market and sell such JV
Products in the Territory. 
 The JV shall actively explore market opportunities outside the PRC as provided in Article 31 to accumulate foreign exchange.

 ARTICLE 13. Once the JV has begun Phase II, the intended scale of production for the JV Facility shall be as follows: 
 13.1 An annual output of four and half (4.5) kilograms of bulk Calcitonin, as well as JV Products in the following approximate quantities: 
  

	 	•	 	 Forty million (40,000,000) ampoules for the 50 I.U. injectable product. 

  

	 	•	 	 Twenty-six million (26,000,000) ampoules for the 100 I.U. injectable product. 

  

	 	•	 	 Four million (4,000,000) vials (14 doses) for the 200 I.U. nasal spray product. 

 13.2 Both parties agree that full consideration shall be given to the possibility for future expansion during planning, designing and construction. Proper adjustment
will be made to reflect the development of operations and market changes. 
 Chapter V TOTAL INVESTMENT AND REGISTERED CAPITAL

 ARTICLE 14. The total investment of the JV will be Fifteen Million U.S. Dollars (US$15,000,000.00). 
 ARTICLE 15. The registered capital of the JV will be Six Million U.S. Dollars ($6,000,000.00). 
 Party A shall contribute Three Million and Three Hundred Thousand US Dollars (US$3,300,000.00) in cash for an equity share of 55%; 
  

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 Party B shall contribute cash and technology valued, in the aggregate, at Two Million and Seven Hundred Thousand
US Dollars (US$2,700,000.00) for an equity share of 45%. 
 Party A and Party B shall make their respective capital contributions in the following manner.

 15.1 Party A shall contribute the Renminbi equivalent of Three Million Three Hundred Thousand US Dollars (US$3,300,000.00), in cash. Such
contribution shall be made as follows: 
 (a) No later than ninety (90) days after the Establishment Date, Party A shall deposit the
Renminbi equivalent of Four Hundred Ninety Five Thousand US Dollars (US$495,000.00) in cash into a bank account designated by the JV in the name of the JV; and 
 (b) No later than two (2) years after the Establishment Date, Party A shall deposit the Renminbi equivalent of Two Million Eight Hundred Five Thousand US Dollars (US$2,805,000.00) in cash into a bank account
designated by the JV in the name of the JV. 
 15.2 Party B shall contribute cash and technology valued, in the aggregate, at Two Million Seven
Hundred Thousand US Dollars (US$2,700,000.00). Such contribution shall be made as follows: 
 (a) No later than ninety (90) days after
the Establishment Date, Party B shall deposit Four Hundred Five Thousand US Dollars (US$405,000.00) in cash into a bank account designated by the JV in the name of the JV; 
 (b) No later than two (2) years after the Establishment Date, Party B shall deposit Four Hundred Ninety Five Thousand US Dollars ($495,000.00) in
cash into a bank account designated by the JV in the name of the JV; 
 (c) Pursuant to the Technology Transfer Agreement, Party A shall
transfer the Technology to the JV, which shall be deemed a contribution valued at One Million Eight Hundred Thousand US Dollars (US$1,800,000.00) made upon execution of the Technology Transfer Agreement. All data, documentation and
information required for the Technology transfer must be provided by Party B according to the terms of the Technology Transfer Agreement and within two (2) years of the Establishment Date. 
 15.3 All cash capital contributions shall be denominated in US Dollars. Cash contribution of Renminbi shall be valued in terms of US Dollars at the official exchange
rate published by the PRC Administration of Foreign Exchange Control for the purchase of US Dollars with Renminbi on the day payment is made. 
 ARTICLE 16.
Party A shall arrange, on behalf of the JV, such third-party financing as the JV may reasonably require in connection with the establishment and operation of the JV , in an amount not to exceed Nine Million US Dollars (US$9,000,000.00). Party
A shall provide any guarantees required by the lenders. 
 ARTICLE 17. In the event that the Board of Directors of the JV unanimously determines that the JV
requires capital in addition to the contributions and financing provided for in Articles 15 and 16, the Board shall solicit additional capital contributions from the JV Parties in proportion to the Distribution Ratios (as defined below) in effect at
the time. No JV Party shall have any obligation to make any such capital contributions. In the event that the additional capital 

  

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contributions made in response to such solicitation shall fall short of the amount of additional capital required by the JV, Party A shall arrange for
third-party financing of the shortfall, provided, however, that such financing shall be sought only in extraordinary circumstances and only with the prior unanimous written approval of the Board of Directors. No capital increase after
the establishment of the JV shall impact the Distribution Ratio of any JV Party. All financial loans by the JV shall be guaranteed by Party A, as set forth in Article 16. 
 Chapter VI RESPONSIBILITIES OF CONTRACT PARTIES 
 ARTICLE 18. In addition to any other express obligations of either
JV Party under this Contract, the Articles of Association or the Technology Transfer Agreement, the responsibilities of Party A and Party B shall include the following: 
 18.1 Party A shall, at its sole cost and expense: 
  

	(a)	Offer support to the JV not inferior to other substantially similar joint ventures in which Party A is currently engaged or will be engaged in the future; 

 

	(b)	Prepare the feasibility study concerning the JV Business, providing Party B with an English translation thereof, and submitting the feasibility study to the appropriate PRC
government authorities after Party A and Party B have jointly agreed on the text thereof; 

  

	(c)	Obtain all licenses and approvals necessary, and render all necessary assistance, (i) for the establishment of the JV as a legal person with limited liability; (ii) for
the establishment of the JV Facility; (iii) for the manufacture and marketing of the JV Products in the PRC; (iv) for the purchase of AE by the JV from Party B; and (v) to enable the JV to secure sufficient foreign exchange for the
payments to be made to Party B by the JV and to enable Party B to repatriate such amounts; 

  

	(d)	Endeavor to entitle the JV to all the preferences granted under Chinese laws including but not limited to taxation and market promotion preferences, and ensure to the greatest
extent possible that the JV qualifies for (i) such “tax holidays” and other most favorable tax treatment as may be available to foreign investment enterprises from time to time, and (ii) a tax rate (without regard to the tax
holiday) that is not greater than the most preferential income tax treatment available to foreign investment enterprises in the region; 

  

	(e)	Transfer to the JV, and arrange any other formalities with the Land Department related to, the land use right for the JV Facility, contract for the design and construction of the JV
Facility and purchase all equipment and other materials needed for the production of the JV Products; 

  

	(f)	Assist the JV Facility in building, validating and operating the JV Facility in full compliance with all Applicable Regulations and in causing the JV Facility to be fully
operational under such Applicable Regulations; 

  

	(g)	Assist the JV in arranging adequate supply of water, electricity and transportation and other infrastructure facilities; 

  

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	(h)	Facilitate the acquisition and staffing of the JV with local Chinese managers, technicians, workers and other types of workforce; 

  

	(i)	Facilitate entry visas, work permits and other travel formalities for foreign staff of the JV and Party B; 

  

	(j)	Assist the JV in developing a national network for the distribution of JV Products in the PRC, including, without limitation, developing effective marketing plans and strategies for
each of the JV Products, securing suitable advertising for the JV Products, and generally promoting the market for the JV Products; and 

  

	(k)	Perform other matters entrusted to Party A by the JV. 

 18.2 Party B
shall, at its sole cost and expense, except as otherwise expressly provided: 
  

	(a)	Offer support to the JV not inferior to other substantially similar joint ventures in which Party B is currently engaged or will be engaged in the future; 

 

	(b)	Provide the JV with bulk Calcitonin and AE necessary for the production of Calcitonin at the cost defined in the Technology Transfer Agreement; 

  

	(c)	Provide technical guidance and assistance with respect to the Technology and with respect to equipment installation, testing and validation for Phase II production, as set forth in
the Technology Transfer Agreement; 

  

	(d)	Facilitate entry visas to the United States for employees of Party A and the JV; 

  

	(e)	Provide training to the technicians and workers of the JV with respect to the Technology, as set forth in the Technology Transfer Agreement; 

  

	(f)	Transfer the Technology, which shall meet the designed capacity and quality requirements defined by the Technology Transfer Agreement; 

  

	(g)	Assist the JV in developing an international network for the distribution of JV Products in areas in the Territory but outside the PRC, including, without limitation, developing
effective marketing plans and strategies for each of the JV Products, securing suitable advertising for the JV Products, and generally promoting the market for the JV Products; and 

  

	(h)	Perform such other matters entrusted to Party B by the JV and accepted by Party B. 

 Chapter VII TECHNOLOGY CONTRIBUTION 
 ARTICLE 19. For the purposes of the JV Business, Party A and Party B agree that
Party B will provide advanced technology including product designs, manufacturing processes, testing methods, material recipe, quality standard and training as set forth in the Technology Transfer Agreement. 
  

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 ARTICLE 20. Party B agrees to provide certain guarantees regarding the Technology. 
  

	1.	Provided that the JV constructs and operates the JV Facility, and manufactures the Calcitonin and the JV Products, all in strict conformance with the requirements, specifications,
Technology and training provided by Party B from time to time and as set forth in the Technology Transfer Agreement, Party B will guarantee, as set forth in the Technology Transfer Agreement: (A) that the Technology is identical to that in use
by Party B in manufacturing the JV Products on a commercial basis at the time when the Technology Transfer Agreement enters into force; (B) that the Technology is suitable for the achievement of the JV’s business purpose; (C) that the
Technology is suitable for the achievement of the product quality and production capacity required by this Contract. 

  

	2.	Party B will provide the JV with the Technology. 

  

	3.	Party B will provide the JV with a list of the Technology and technical assistance calculated as capital contribution. 

  

	4.	Party B will promptly deliver the designs, technical know-how and other detailed materials as part of the Technology, as required by the Technology Transfer Agreement.

  

	5.	Party B will contribute its proprietary Technology for the production of Calcitonin. 

  

	6.	Party B will guarantee that it is not aware of any current legal disputes in any format affecting its use of the Technology in the PRC, or of any infringement by its proposed use of
the Technology in the PRC on any third party patent or intellectual property rights. If Party B fraudulently concealed such legal disputes or infringement, Party B shall be liable for damages thus caused to Party A or the JV.

 ARTICLE 21. In the event that the JV constructs and operates the JV Facility, and manufactures the Calcitonin and the JV Products, all in
strict conformance with the requirements, specifications, Technology and training provided by Party B from time to time and as set forth in the Technology Transfer Agreement, but, as a result of fraudulent concealment on the part of Party B in not
providing the Technology in accordance with the Technology Transfer Agreement, the Technology fails to reach the originally designed capacity set forth in the Technology Transfer Agreement, Party B shall be liable for the damages to the JV as set
forth in the Technology Transfer Agreement. 
 ARTICLE 22. Party B is free from responsibility for damages to the JV that result, in whole or in part, from
non-compliance with the requirements, specifications, Technology, training, guidelines and standards provided to the JV by Party B with regard to the construction and operation of the JV Facility and the manufacture of Calcitonin and the JV
Products. 
 ARTICLE 23. The Technology is regarded as conforming to the contract specifications if it can meet the technical indexes listed by Party B for
three (3) consecutive batches after the Technology is officially put into trial operation, which will be jointly confirmed by representatives from Party A, Party B and the JV. 
 ARTICLE 24. Both Party A and Party B are under the obligation to keep the Technology confidential in accordance with the Confidentiality Agreement between the parties dated October 29, 1998. 
  

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 ARTICLE 25. Party A and the JV shall not provide in any format to any third party the Technology after Party B has
provided the Technology to the JV unless unanimously agreed by the JV Board. Party B shall not transfer the Technology to any third party in the Territory after the Establishment Date. 
 ARTICLE 26. The JV will have access to improvements to the Technology developed by Party B after Party B has provided the Technology to the JV to the extent permitted by, and on the terms and conditions provided in,
the Technology Transfer Agreement. 
 ARTICLE 27. The JV shall be entitled to any new improvements developed through its own efforts on basis of the
Technology. No party shall use or transfer or release any such new technology to any third party without the permission of the JV. Party B shall have a right to use such improvements outside the Territory in accordance with the Technology Transfer
Agreement. 
 ARTICLE 28. The JV has right of first refusal to other products independently developed by Party B for use in the PRC. New products developed
by the JV shall belong to the JV, shall be considered JV Products, and Party B shall have a right of first refusal to such products outside the Territory. If the new products developed by the JV entail the use of AE, Party B or its successor shall
provide the JV’s AE requirements for such new products under the terms of the Technology Transfer Agreement provided there is no conflict with any obligation of Party B. 
 ARTICLE 29. Without the written permission from the other party after the establishment of the JV, neither Party A nor Party B as well as their subsidiaries and assignees shall independently or jointly with any third
party manufacture, distribute JV Products in the Territory. 
 ARTICLE 30. Party B shall be the exclusive source of AE for the JV and the JV shall purchase
all of its requirements of AE from the JV. The JV shall not sell AE. 
 Chapter VIII SALES OF PRODUCTS 
 ARTICLE 31. The goal of the JV is to optimize return on investment for all parties. The JV Products shall be sold inside the PRC and may be sold in countries outside the
PRC in the best interest of the JV, to the extent expressly authorized by the unanimous approval of the Board of Directors. If the Board authorizes the JV to sell the JV Products outside the PRC, the JV shall ensure that the ratio of export sales v.
domestic sales shall be approximately forty percent (40%). Adjustment will be made to such ratio according to market conditions by the unanimous approval of the Board of Directors. 
 ARTICLE 32. The JV shall have the right to use for free in the marketing of JV Products in the Territory the trademarks of Party A (the “Party A Marks”). Party
A and the JV shall have the right to use certain trademarks of Party B in accordance with the following: 
  

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	1.	Subject to the terms and conditions hereof, Party B hereby grants to Party A a non-exclusive, royalty-free license (without right to sublicense) to use the trade name
“Unigene” as part of the name of the JV, in connection with the preparation of the feasibility study and related documents, applications for all licenses and approvals required from PRC governmental authorities, and ancillary documents in
connection with the establishment of the JV pursuant to this Contract. Such license shall expire automatically on the Establishment Date. 

  

	2.	Subject to the terms and conditions hereof, Party B hereby grants to the JV, effective as of the Establishment Date, (i) a non-exclusive, royalty-free license (without right to
sublicense) to use the trade name “Unigene” as part of the name of the JV, and (ii) a non-exclusive, royalty-free license (without right to sublicense) to use the trademarks “Unigene” and “Fortical” (collectively,
the “Party B Marks” and with the Party A Marks, the “Marks”), solely for the purpose of marketing and promoting the JV Products in the Territory. Such license shall expire automatically upon the expiration or termination of the
Contract. 

  

	3.	Party A agrees not to use the trade name “Unigene” for any purpose not specified in Paragraph 1 hereof, including without limitation, in connection with its own business.
Further, Party A agrees not to use any trademark, trade name, service name, service mark or business symbol that is substantially similar to the Marks or so nearly resembles it as to be likely to cause deception or confusion.

 By its ratification of this Contract, the JV agrees (a) not to make use of the Marks in contravention hereof; and (b) to comply,
in its use of the Marks, with such rules and conditions pertaining to the use thereof as the relevant JV Party may establish from time to time at its sole discretion. The JV shall report forthwith to the relevant JV Party any infringement or
suspected infringement of such party’s Marks in the Territory which may come to the notice of the JV and, at the request of such party and to the extent such infringement is related to the JV’s use of the Marks, institute legal action with
respect to such infringement. Upon such JV Party’s reasonable request and at the cost and expense of the JV, the JV shall use its best efforts to prevent or enjoin any such infringement (to the extent related to the JV’s use of the Marks)
and to prosecute any proceedings that may be necessary for such purposes, including granting permission to such JV Party to institute any such proceedings in the name of the JV or in the names of such JV Party and the JV. Any damages recovered in
any such proceedings shall be for the account of the JV. The JV shall use its best efforts to preserve the value and validity of the Marks in the Territory. 
 Chapter IX BOARD OF DIRECTORS 
 ARTICLE 33. The Establishment Date is the establishment date of the Board of
Directors. 
 ARTICLE 34. The Board of Directors is composed of five (5) directors. The Board shall have one (1) director who shall serve as
Chairman and one (1) director who shall serve as Vice-Chairman. The Chairman shall be selected by Party A and the Vice-Chairman shall be selected 

  

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by Party B. Three (3) directors will be selected by Party A and two (2) will be selected by Party B. Each director shall be appointed for a term of
four (4) years, subject to renewal, but may be replaced at any time during his term by the party that appointed him, upon prior written notice to the other party. 
 ARTICLE 35. The Board of Directors shall be the highest body of authority over the JV. It shall decide all major issues concerning the JV, in accordance with the Articles of Association. The vote of four of the five
members of the Board of Directors (or their duly appointed proxies) shall be sufficient to constitute action of the Board on all matters except the matters set forth below, as to which the Board may take action only by unanimous decision of the five
(5) members (or their duly appointed proxies): 
 1. Approving on an annual basis the operating plan for the JV; 
 2. Investigating and approving any expenditures by the JV in excess of Three Hundred Thousand U.S. Dollars (US$300,000); 
 3. Investigating and approving the obtainment by the JV of all third party financing; 
 4. Selecting and approving any foreign country market regions for sale of the JV Products and determining the ratio of export sales to domestic sales;

 5. Examining and approving the fiscal budget, financial statements and balance sheets of the JV; 
 6. Determining and approving the profit allocation and distribution and the loss offset plan for the JV; 
 7. Approving any change in the registered capital for the JV; 
 8. Approving the transfer of the registered capital of the JV to a third party; 
 9. Approving any merger,
separation, acquisition, dissolution, liquidation or alteration of the JV; 
 10. Amending the Articles of Association; 
 11. Approving the marketing and/or development of products by the JV other than the JV Products; 
 12. Approving the transfer, sale or licensing to a third party of any improvements in technology that belong to the JV or contractually may be
transferred, sold or licensed by the JV; and 
 13. Other issues of importance so deemed by the Board of Directors. 
 ARTICLE 36. The Chairman of the Board of Directors is the legal representative of the JV. When the Chairman is unable to perform his responsibilities, the Vice-Chairman
shall be authorized to represent the JV. 
  

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 ARTICLE 37. A Board of Directors’ meeting is to be convened at least once per year. The Chairman of the Board shall
convene interim board meetings upon proposal by two or more directors. 
 ARTICLE 38. Board meetings shall be conducted both in Chinese and English. All
topics for Board Meetings and all minutes and resolutions from the Board Meetings shall be written in both Chinese and English language versions, which shall have equal force. All records of meetings, including without limitation minutes and
resolutions, shall be filed by the JV. 
 Chapter X MANAGEMENT ORGANIZATION 
 ARTICLE 39. The Board of Directors of the JV shall establish management organs for the JV, to be responsible for daily operational and managerial work. The JV shall have
one (1) general manager, selected by Party B, and one (1) deputy general manager, selected by Party A. The term of service for each of the general manager and the deputy general manager shall be four (4) years, which term may be
renewed through re-appointment by the Board of Directors. The general manager and the deputy general manager may be removed for cause by the vote of the Board of Directors and otherwise by the selecting party. Upon removal of the general manager or
the deputy general manager or expiration of their respective terms without renewal, the party that selected the general manager or deputy general manager, as the case may be, shall have the right to select the replacement general manager or deputy
general manager, as the case may be. 
 ARTICLE 40. The general manager shall carry out various resolutions of the Board of Directors and organize and lead
the daily operation and management of the JV. The deputy general manager shall assist the general manager in his work. 
 ARTICLE 41. In the case of
engagement in malpractice for private gain or serious dereliction of duty on the part of the general manager, deputy general managers or other corporate executives, or for any other reason, they may be dismissed at any time by resolution of the
Board of Directors. 
 Chapter XI PURCHASE OF EQUIPMENT 
 ARTICLE 42. In the purchases of such items as required machinery, equipment, raw materials, fuel, parts, means of transport and articles for office use, priority shall be given to sources located in the PRC, provided
that such sources are capable of providing such supply on terms and conditions, which conditions shall include without limitation quality considerations, substantially as favorable as those offered by sources not located in the PRC. 
 ARTICLE 43. The participation of Party A should not be prevented when Party B is entrusted by the JV for the purchase of equipment from overseas markets. 
 Chapter XII MANAGEMENT OF LABOR 
 ARTICLE 44. Matters
relating to the staff and workers of the JV such as recruitment, employment, dismissal, resignation, wages, labor insurance, welfare benefits, incentive and penalty systems, are to be settled through collective or individual contracts by the JV and
Trade 

  

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Union following the programs mapped out by the Board of Directors, in accordance with “The PRC Labor Law” and other relevant regulations. Labor
Contracts shall be filed with the local Labor Department. 
 ARTICLE 45. Matters relating to the recruitment, wage treatment, social insurance, welfare
benefits and standard of travel expenses of high level managerial personnel are subject to the approval of the Board of Directors. 
 Chapter XIII TRANSFER OF JV RIGHTS 
 ARTICLE 46. For a period of three (3) years following the Effective Date, no JV Party shall sell,
assign, transfer, convey, pledge, encumber or liquidate (“Transfer”) or otherwise cease to be the beneficial owner of any or all of its rights under this Contract or in its capital contribution in the JV. 
 ARTICLE 47. Right of First Refusal. 
 (a) No JV Party shall
effect a Transfer of any or all of its rights under this Contract or in its capital contribution in the JV (collectively, its “Rights”), after the third anniversary following the Effective Date, except in accordance with this Article 46.
Any JV Party (the “Offeror”) that proposes to Transfer its Rights shall first offer to Transfer such Rights (the “Offer”) to the other JV Party (the “Offeree”), and the Offeree shall have the option to purchase such
Rights, on such terms and conditions as it and the Offeror shall mutually agree. In the absence of an agreement, the offer price shall be determined by a valuation expert chosen by lot from a list of the three (3) largest valuation firms
licensed to do business in the PRC within a period of thirty (30) days beginning with the receipt of the Offeror’s written offer to Transfer its Rights; provided, however, that the Offeree shall have no obligation to purchase
the Rights at such price. The costs associated with retaining the valuation expert shall be borne by the Offeror. 
 (b) If the Offeree does
not agree to purchase the Rights within thirty (30) days from the date of receipt of the Offer, the Offeror may offer its Rights to a third party on the terms and conditions offered to the Offeree. If the Offeror receives a bona fide offer from
a third party (a “Third Party Offer”), the Offeror shall obtain the from the third party and deliver to the Offeree a notice in writing, signed by the Offeror and the third party, of the terms thereof. The Offeree shall then have ten
(10) days from the date of receipt of such notice to accept the Third Party Offer by delivering written notice of acceptance to the Offeror. Further, the Offeree shall have the right to purchase such Rights on the terms and conditions set forth
in the notice delivered to the Offeree, except that any Offeree accepting the Offer shall have the right to substitute equivalent cash for any non-cash consideration included in the Third Party Offer. A valuation expert chosen by lot from a list of
the three (3) largest valuation firms licensed to do business in the PRC shall determine the cash value of any non-cash consideration. The costs associated with retaining the valuation expert shall be borne by the Offeror. If the Offeree does
not accept the Third Party Offer within such ten–day period, the Offeror shall be free, for a succeeding sixty-day period, to accept the Third Party Offer and Transfer the relevant Rights accordingly 
  

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 Chapter XIV TAXATION, ACCOUNTING AND AUDITING 
 ARTICLE 48. The JV shall pay various taxes in accordance with stipulations of the relevant laws and regulations of the PRC. 
 ARTICLE 49. Staff and workers of the JV shall pay individual income tax and income adjustment tax according to the “Individual Income Tax Law of the People’s
Republic of China.” 
 ARTICLE 50. The Board of Directors of the JV shall determine the amounts to be allocated to the reserve fund, the enterprise
expansion fund, and the staff and workers welfare and incentive fund (collectively, the “Three Funds”) before any distribution of profits is made to Party A and Party B. The JV may not make allocations to such funds (or similar funds) if
such allocations exceed, in the aggregate, fifteen percent (15%) of the after-tax profits of the JV, without the unanimous prior consent of the Board of Directors. 
 ARTICLE 51. The profits distributed by the JV to Party B may be repatriated from the PRC according to Chinese law. 
 ARTICLE
52. The fiscal year of the JV shall be 1st January through 31 December each year (the Gregorian calendar year). 
 ARTICLE 53. The financial and
accounting system of the JV shall be formulated according to, and consistent with, the relevant laws and regulations of the PRC. All vouchers, accounts, books, statements shall be written in Chinese. All monthly and annual statements and quarterly
reports shall be prepared both in Chinese and English, with both versions having equal force and effect. The JV shall render assistance to each party for review of such documents by such party. 
 ARTICLE 54. The JV shall keep full and accurate books of account showing all revenues and disbursements and all assets and liabilities of the JV. Without limiting the
generality of the foregoing, such books of account shall include the following items: 
 1. All cash receipts and expenses of the JV; 
 2. All records of sales, losses and purchases by the JV; 
 3. The registered
capital and liability of the JV; and 
 4. The timing of registered capital contributions, distributions, changes and assignment. 
 ARTICLE 55. The JV shall provide accounting reports in both English and Chinese to the Board of Directors, each of Party A and Party B, the local tax authorities and
other relevant government agencies on a quarterly and annual basis, and shall include such information in the reports to each of Party A and Party B. The JV’s management shall provide the annual report of the JV to the Board of Directors for
approval within two (2) months following the end of each fiscal year. 
  

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 ARTICLE 56. An annual audit of the JV’s accounts shall be carried out by an internationally known and recognized
accounting firm (registered in the PRC) appointed by the Board of Directors. The auditor shall submit reports to the Board of Directors and to the general manager. All costs and expenses incurred in connection with such annual audit shall be borne
by the JV. Party A and Party B shall each have the right to procure a special audit of the JV’s books and records, provided that the external auditor is from an internationally known and recognized accounting firm, whose reports shall likewise
be submitted to the Board of Directors and the general manager. The costs and expenses incurred in connection with such additional audit shall be borne by the requesting party, unless such audit shall disclose one or more errors in the regular audit
totaling at least one percent (1%) of the aggregate expenses of the JV for such year, in which case the JV shall bear such costs and expenses. Party A and Party B may designate duly authorized personnel to inspect, at reasonable business hours,
the books and records of the JV at the expense of such party. 
 Chapter XV PROFITS AND LOSSES 
 ARTICLE 57. The equity of the JV shall be held by, and the distributions of profits of the JV shall be made to, the JV Parties in the following proportions: fifty-five
percent (55%) to Party B and forty-five percent (45%) to Party A (the “Distribution Ratios”). 
 ARTICLE 58. Profit of the JV (calculated
after (a) repayment of any loans to third parties (other than the JV Parties); (b) payment of any and all taxes due and owing by the JV; (c) satisfaction of losses for any previous years; and (d) allocations to the Three Funds in
accordance with Article 49) (the “JV Profit”) shall be distributed to Party B and Party A annually in accordance with the Distribution Ratios then in effect, unless the Board of Directors unanimously determines that no such distribution
should be made. Such distribution of JV Profit shall be made within three (3) months of the end of each fiscal year of the JV. Distributions to Party A shall be made in Renminbi and distributions to Party B shall be made in US Dollars.

 ARTICLE 59. As set forth in Article 17, the Distribution Ratios shall not be altered, notwithstanding any capital contributions by any third party or
either JV Party. 
 ARTICLE 60. Neither JV Party shall be jointly or severally liable for the debts or obligations of the JV, or for any claim for losses or
damages caused by the JV, except to the extent of its contributions to the JV as provided for in Article 15 and except to the extent of any third-party financing it guarantees pursuant to Article 16. 
 ARTICLE 61. Any payments made by the JV in US Dollars pursuant to this Contract shall be calculated on the basis of the official exchange rate published by the PRC
Administration of Foreign Exchange Control for the purchase of US Dollars with Renminbi on the day the payment is due. 
 Chapter XVI
REPRESENTATIONS, WARRANTIES AND COVENANTS 
 ARTICLE 62. General Representations and Warranties. 
  

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 62.1 Party A represents and warrants to Party B that it has the authorization required under the laws of the PRC to
execute and deliver this Contract and to carry out and perform its obligations under the terms of this Contract. Party A further represents and warrants to Party B that it is a legal person established and in good standing under the laws of the PRC
and registered in Shijiazhuang, Hebei Province, PRC. 
 62.2 Party B represents and warrants to Party A that it has all the requisite legal and corporate
power to execute and deliver this Contract and to carry out and perform its obligations under the terms of this Contract. Party B further represents and warrants to Party A that it is a corporation established and in good standing under the laws of
the State of Delaware, USA. 
 ARTICLE 63. Covenants. 
 63.1
Neither the JV nor Party A shall, directly or indirectly, (a) purchase, manufacture, distribute or sell bulk (unformulated) calcitonin or products containing calcitonin other than the JV Products; or (b) use AE for any purpose other than
the manufacture of the JV Products, including, without limitation, for resale. 
 63.2 The parties agree that any transaction between the JV and either of
the JV Parties, including any entity directly or indirectly related to either of the JV Parties, other than transactions expressly contemplated by this Contract or the Technology Transfer Agreement, shall be at prices, and on other terms and
conditions, that are no less favorable to the JV than those that could be reasonably obtained by the JV from unrelated third parties on an arms-length-basis in similar transactions. 
 Chapter XVII TERM OF JOINT VENTURE CONTRACT 
 ARTICLE 64. The term of this Contract shall be
thirty (30) years from the Establishment Date and for such period thereafter as is agreed by the parties, unless earlier terminated pursuant to Chapter XX. 
 ARTICLE 65. Upon the proposal from one party and unanimous approval from the Board of Directors, the JV may extend the term of the JV by filing an application for extension of the JV term with the original examination and approval organ six
(6) months before the date of expiration of the JV Term. 
 Chapter XVIII EFFECT OF CONTRACT EXPIRATION OR TERMINATION 

ARTICLE 66. Upon the expiration of or termination of this Contract, (a) the JV shall immediately cease using the Technology and shall return to Party B the
Technology and all other Confidential Information provided by Party B to the JV; (b) the Technology Transfer Agreement shall terminate; (c) any remaining inventory of JV Products shall be sold in the Territory; (d) the JV shall cease
using the Marks, and (e) the JV shall be liquidated according to the Law. The property of the JV remaining after liquidation shall be distributed to the JV Parties in accordance 

  

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with the Distribution Ratios. Notwithstanding the foregoing, Party B or its successor shall continue to supply the JV or its successor with AE,
provided, however, that Party B and the JV can agree to commercially reasonable terms with respect thereto and there is no conflict with any other obligation of Party B and provided further that Party B shall in no event be
obligated to supply AE to the JV if the Contract was terminated as a result of the JV’s breach of the Technology Transfer Agreement or Party A’s breach of this Contract. 
 Chapter XIX INSURANCE 
 ARTICLE 67. All insurance coverage for the JV shall be arranged with
insurance carrier(s) that operate in the PRC, provided that such insurance carrier(s) are capable of providing coverage on terms and conditions substantially as favorable as those offered by sources not located in the PRC. The selection of insurance
company is subject to Board of Directors approval. 
 Chapter XX CONTRACT AMENDMENT, ALTERATION AND TERMINATION 
 ARTICLE 68. No amendments to the Contract and its appendixes shall be effective without the prior written agreement of Party A and Party B and the approval from the
original PRC Government examination and approval organization. 
 ARTICLE 69. In the event that either JV Party is unable to perform the Contract due to
force majeure or inability to continue operation due to continuous severe losses, the Contract may be terminated by unanimous approval of the Board of Directors of the JV and approval from the original examination and approval PRC Government
organization. 
 ARTICLE 70. In the event that any JV Party or the JV fails to perform its obligations stipulated in this Contract, the Articles of
Association or the Technology Transfer Agreement or repudiates this Contract, the Articles of Association or the Technology Transfer Agreement, such JV Party or the JV, as applicable, shall be regarded as unilaterally in breach of this Contract. In
addition to the right to claims for damages, the non-breaching JV Party shall have the right to terminate this Contract and to file with the original examination and approval organization for such termination if the breaching entity does not cure
its breach within thirty (30) days of written notice thereof. 
 ARTICLE 71. Party B may terminate this Contract, by written notice to Party A
(a) at any time after the first anniversary of the Effective Date, in the event that no sales of any JV Product have been made, (b) if the Establishment Date has not occurred within sixty (60) days of the Effective Date, or
(c) in the event that any profits distributed by the JV to Party B may not be repatriated from the PRC according to Chinese law. 
 ARTICLE 72. The
parties agree that if there is any subsequent enactment of law or regulation or any subsequent act of governmental authority in the PRC, including, without limitation, any condition to the approval of this Contract, that, in the reasonable opinion
of Party B, (a) makes performance of this Contract or a material provision of this Contract impossible for Party B, (b) materially adversely alters Party B’s rights and obligations from those agreed and contemplated by this Contract,
including, without limitation, materially adversely alters Party B’s 

  

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responsibilities or required actions with respect to the JV, or (c) materially adversely interferes with the benefits contemplated herein to be received
by Party B, including, without limitation, materially adversely alters the compensation that Party B is due hereunder or under the Technology Transfer Agreement, Party B’s ownership interest in the JV or Party B’s participation in
decision-making that affects the JV, the parties shall use their best efforts to amend this Contract to restore the equitable arrangement intended by the parties as reflected in this Contract or, if Party B deems in its sole discretion that there is
no mutually acceptable means of accomplishing the parties’ original intent, Party B shall have the right to unilaterally terminate this Contract. 
 ARTICLE 73. Either JV Party may terminate this Contract by written notice to the other JV Party in the event that (a) the equipment necessary for fulfillment of the JV’s obligations is not fully operational in accordance with the
Applicable Regulations, including without limitation, not capable of producing Calcitonin in conformity with the specifications provided by Party B or not capable of producing the JV Product within a reasonable time period, or (b) the JV has
not received all necessary government approvals to distribute the JV Products in the PRC within one (1) year of the certification by the relevant PRC authorities that the facility is operating under Good Manufacturing Practice. 
 ARTICLE 74. Party A and the JV shall take all measures necessary, which in any event shall not be less than all reasonable measures, to maintain the confidentiality of
the Technology and other trade secrets or proprietary information (whether or not reduced to writing) (the “Confidential Information”) provided by Party B to the JV, which obligation shall continue for a period of five (5) years after
the expiration or termination of this Contract. Party A and the JV shall not disclose such Confidential Information to any third person, except to their respective designated officers and employees on a need to know basis, and who prior to such
disclosure have been notified of the confidential nature of the disclosure and have executed a confidentiality agreement having obligations of confidentiality at least as strict as those set forth in this Article 73 and a copy of which is promptly
provided to Party B. In the event of any unauthorized disclosure of the Confidential Information by Party A or the JV or their respective officers, employees, staff or workers, Party B shall have the right to terminate this Contract by written
notice to Party A. 
 ARTICLE 75. The following provisions of this Contract shall survive the termination or expiration thereof: Articles 22, 24, 81, 84 and
85, Chapters XIII, XIV, XV, XXI, XXIII, XXIV and this Chapter XX. 
 Chapter XXI RESPONSIBILITIES OF CONTRACT BREACH 
 ARTICLE 76. Any party who fails to make timely and adequate capital contributions pursuant to Chapter V, shall pay the other JV Party an amount equal to five percent
(5%) of such shortfall amount of delay of payment thereof. The non-breaching party shall also have the right to terminate the Contract according to Article 69 and shall have a claim for damages from the breaching party. 
  

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 ARTICLE 77. Partial or complete non-performance of the contract and its appendixes caused by any single party shall be
the responsibility of this defaulting party. In case of shared fault, each party shall be liable to its own share of responsibility. 
 Chapter XXII FORCE MAJEURE 
 ARTICLE 78. In the event of such incidents of force majeure as earthquake, hurricane, flood, war and other
unpredictable incidents whose inception and consequence are unpreventable, which result in the difficulty or inability to perform the Contract under the agreed conditions, the party who is affected by the force majeure incidents shall promptly fax
notice to the other party of the situation and provide valid documents with regard to the details of the incident and causes for the nonperformance or partial nonperformance or prolonged performance of the Contract. In consideration of the extent of
impact on the Contract performance, both parties will discuss and decide on whether to dissolve the Contract or partially alleviate the responsibility for nonperformance, or prolong the Contract performance. 
 Chapter XXIII APPLICABLE LAWS 
 ARTICLE 79. The
establishment, validity, interpretation, performance and dispute resolution of the Contract is subject to the jurisdiction of the laws of the PRC and the international rules and treaties that are recognized by China shall be duly followed.

 Chapter XXIV RESOLUTION OF DISPUTES 
 ARTICLE 80. All disputes that arise over the performance or in connection with the Contract, shall be referred to resolution through friendly discussions by both parties. If friendly discussions are ineffective, disputes shall be submitted
to arbitration before the Stockholm Chamber of Commerce applying the rules and procedures of International Chamber of Commerce. The arbitration awards shall be final and binding on both parties. The fees and expenses involved in the arbitration
shall be borne by the losing party. 
 ARTICLE 81. In the course of arbitration, with the exception of matters in dispute, both parties shall continue to
perform the Contract. 
 Chapter XXV LANGUAGES 
 ARTICLE 82. The Contract is written with 8 copies both in Chinese language and English language. Both versions shall have equal validity. 
 Chapter XXVI MISCELLANEOUS 
 ARTICLE 83. The contract, addenda and appendices including the Articles of Association, import list, sales
agreement and the Technology Transfer Agreement, all constitute an inseparable part of this Contract. 
  

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 ARTICLE 84. This Contract and its addenda and appendixes shall enter into force upon the approval by National
Administration of High and New Technology Industrial Development Zone, Shijiazhuang, Hebei Province. 
 ARTICLE 85. All notices or other communications that
are required or permitted hereunder shall be in writing and delivered personally, sent by telecopier (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by internationally-recognized courier or sent
by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 
 If to Party A, to: 
 Shijiazhuang Pharmaceutical Group Company, Ltd. 
 276 Zhongshan West Road 
 Shijiazhuang, Hebei Province, PRC 
 Attention: Mr. Cai Dong Chen 
 Telecopier: 0086-311-703-9608 
 with a copy to: 
  

							
	  
	  		  	
	  
	  		  	
	  
	  		  	
	Attention:	 	  
	  		  	
	Telecopier:	 	  
	  		  	

 If to Party B, to: 
 Unigene Laboratories, Inc. 
 110 Little Falls Road 
 Fairfield, New Jersey 07004, USA 
 Attention: Dr. Warren Levy, President 
 Facsimile: 001-973-227-6088 
 with a copy to: 
 Covington &
Burling 
 601 California Street, Suite 1900 
 San Francisco, CA 94108, USA 
 Attention: James C. Snipes, Esq. 
 Facsimile: 001-415-591-6091 
 or to such other address as
the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered on a business day,
(b) on the business day 

  

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after dispatch, if sent by facsimile (with confirming copy sent by international express courier), (c) on the third business day after dispatch, if sent
by internationally recognized courier, and (d) upon receipt, if dispatched by mail. It is understood and agreed that this Article 84 is not intended to govern the day-to-day business communications necessary between the parties in performing
their duties, in due course, under the terms of this Contract. 
 ARTICLE 86. Neither the JV nor Party B shall be responsible for compensating any brokers or
intermediaries involved in helping to establish the JV. 
 ARTICLE 87. This Contract is signed by representatives of Party A and Party B on June 15,
2000. 
 Party A: 
  

	
	 /s/ Cai Dong Chen

	 Cai Dong Chen
 Legal Representative

	SHIJIAZHUANG PHARMACEUTICAL GROUP COMPANY, LTD

 Party B: 
  

	
	 /s/ Dr. Warren P. Levy

	Dr. Warren P. Levy
	Legal Representative
	UNIGENE LABORATORIES, INC.

  

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