Document:

Unassociated Document

 

Exhibit 10.1

 

FOURTH AMENDMENT TO STANDSTILL AND OPTION AGREEMENT

This FOURTH AMENDMENT TO STANDSTILL AND OPTION AGREEMENT (this “Fourth Amendment”) effective this 6th day of June, 2011 (the “Effective Date”), is made and entered into by and among Baxter Healthcare Corporation, a Delaware Corporation with a place of business at One Baxter Parkway, Deerfield, IL 60015 (“BHC”), Baxter Healthcare S.A., a corporation organized under the laws of Switzerland with a place of business at Thurgauerstrasse 130, 8152 Glattpark (Opfikon) Switzerland (“BHSA”), Baxter Innovations GmbH, a corporation organized under the laws of Austria with a place of business at Industriestrasse 67, 1221 Vienna, Austria (“Innovations” and, together with BHC and BHSA, “Baxter”) and Medgenics, Inc., a Delaware corporation with a place of business at Teradion Business Park, P.O. Box 14, Misgav 20179 Israel (“Medgenics”). Baxter and Medgenics are each sometimes referred to herein as a “Party” and, collectively, as the “Parties”.

BACKGROUND

WHEREAS, Baxter and Medgenics entered into that certain Standstill and Option Agreement dated October 22, 2009 (the “Original Agreement”), as amended by that certain First Amendment to Standstill and Option Agreement dated October 22, 2009, and further amended by that certain Second Amendment to Standstill and Option Agreement dated December 29, 2009, and further amended by that certain Third Amendment to Standstill and Option Agreement dated October 20, 2010 (the “Third Amendment”) (as amended, the “Agreement”) pursuant to which inter alia Baxter agreed to fund certain research and development activities to be conducted by Medgenics relating to the application of Medgenics’ Biopump Technology to produce human Factor VIII (hFVIII) protein;

 

WHEREAS, the Agreement expired pursuant to its terms as of April 21, 2011 (the “Expiration Date”); and

WHEREAS, the Parties desire to reinstate the Agreement and further amend the Agreement to provide for the continued development of Medgenics’ Biopump Technology to produce human Factor VIII (hFVIII) on the terms set forth in this Fourth Amendment.

NOW, THEREFORE, in consideration of the foregoing and such other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

AGREEMENT

1.      Reinstatement and Incorporation of the Agreement. The Agreement and all of its terms and conditions are hereby reinstated and confirmed in full as of the date first above written, except as specifically set forth herein. All capitalized terms which are not defined herein shall have the same meanings as set forth in the Agreement, and the Agreement, to the extent not inconsistent with this Fourth Amendment, is incorporated herein by this reference as though the same was set forth in its entirety. To the extent any terms and provisions of the Agreement are inconsistent with the amendments set forth in Paragraph 2 below, such terms and provisions shall be deemed superseded hereby. Except as specifically set forth herein, the Agreement shall remain in full force and effect and its provisions shall be binding on the Parties hereto.

 

  

  

  

 

	
  

	
2.

	
Amendment of the Agreement. The Agreement is hereby amended as follows:

	
  

	
a.

	
From and after the date of this Fourth Amendment, the provisions set forth in the entirety of Section 2.b. of the Third Amendment shall no longer be in force or effect. The Parties agree that Baxter will make the payment pursuant to the terms and conditions set forth in subsection (d) of this Fourth Amendment. Notwithstanding the foregoing, except as expressly set forth in subsection (d) or, if applicable, subsection (e) of this Fourth Amendment, Medgenics agrees that Baxter has no financial obligation to Medgenics.

 

	
  

	
b.

	
Promptly following the Effective Date of this Fourth Amendment, Baxter will return to Medgenics the two incubators previously used for shipment of hFVIII biopumps. Promptly after receipt of such incubators, Medgenics will use the incubators to ship to Baxter’s facilities in Vienna, Austria 20 biopumps developed by Medgenics (consisting of 17 hFVIII biopumps and 3 EPO biopumps) (the “June Biopumps”). Medgenics shall use its reasonable good faith efforts to ship the June Biopumps to Baxter within three weeks of the date that Medgenics receives the incubators from Baxter. In the event that any of the June Biopumps shall arrive damaged, Baxter shall immediately notify Medgenics and the parties will in good faith determine whether new biopumps are required and also determine whether the proposed experiments and related timing should be altered in any way.

 

	
  

	
c.

	
Upon receipt of, the June Biopumps, Baxter shall perform certain experiments using the June Biopumps in SCID mice as outlined on Exhibit A attached hereto (the “Baxter SCID Experiments”). The JSC shall make such necessary adjustments in the proposed experimental plan set forth on Exhibit A as the parties determine is appropriate. Baxter shall use its good faith reasonable efforts to complete the Baxter SCID Experiments within eight (8) weeks following Baxter’s receipt of the June Biopumps (and the date on which the Baxter SCID Experiments are actually completed shall be referred to as the “Validation Completion Date”). The parties shall update each other on the progress of the work herunder on a monthly basis or as otherwise deemed appropriate by the parties. Promptly following the Validation Completion Date, Baxter shall provide to Medgenics a report, in reasonable detail, setting forth the results of the Baxter SCID Experiments and Medgenics will promptly provide to Baxter a report, in reasonable detail, setting forth the results of the SCID mouse experiments conducted by Medgenics.

 

	
  

	
d.

	
Baxter shall pay to Medgenics $75,000 for preparation of the June Biopumps within 60 (sixty) days upon receipt of an invoice. Medgencis shall issue the invoice within ten (10) days of delivery of the June Biopumps to Baxter pursuant to clause b above.

 

	
  

	
e.

	
The Agreement, as amended hereby, shall terminate five (5) days after the earlier of (i) Validation Completion Date and (ii) September 30, 2011, unless Baxter shall have delivered the Option Notice as provided in Section 4.b. of the Agreement on or prior to end of such 5-day period and within forty-five (45) days of the delivery of the Option Notice, Baxter shall make payment of the Option Payment. The Parties agree that Medgenics shall not be obligated to perform any obligations or refrain from taking any actions under Section 2.a. of the Agreement from and after the Expiration Date until and unless the Negotiation Period is commenced as provided in Section 4.c. of the Original Agreement. Notwithstanding the foregoing, nothing in this Fourth Amendment shall amend, modify or limit the Parties obligations under Section 3.f. or the MCDA.

 

	 	
f.

	
Section 6 is hereby amended by deleting the section in its entirety and replacing it with the following language:

 

  

  

  

 

	
  

	
g.

	
The Parties have entered into a Mutual Confidential Disclosure Agreement,dated March 17, 2009 (as the same may be amended, MCDA). Unless and until the Parties execute a definitive agreement relating to any Further Transaction, all information exchanged by the Parties meeting the definition of “Confidential Information” as set forth in Section 1(a) of the MCDA will be deemed to be “Confidential Information” covered by the terms of the MCDA.

 

	
  

	
3.

	
Effectuation.  The amendment to the Agreement contemplated by this Fourth Amendment shall be deemed effective as of the date first written above upon the full execution of this Fourth Amendment and without any further action required by the Parties hereto.  There are no conditions precedent or subsequent to the effectiveness of this Fourth Amendment.

	
  

	
4.

	
Counterparts.  This Fourth Amendment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.  One or more counterparts of this Fourth Amendment may be delivered by facsimile, with the intention that delivery by such means shall have the same effect as delivery of an original counterpart thereof.

[Signature Page Follows]

  

  

  

[Signature Page to Fourth Amendment]

           IN WITNESS WHEREOF, the Parties hereto have duly executed this Fourth Amendment as of the date first above written.

	
BAXTER HEALTHCARE CORPORATION

	  	
MEDGENICS, INC.

	  	  	  
	
By:

	/s/ Ludwig N. Hantson	  	
By:

	/s/ Andrew Pearlman
	
Name:

	Ludwig N. Hantson	  	
Name:

	Andrew Pearlman
	
Title:

	CVP / President BioScience	  	
Title:

	CEO

	
BAXTER HEALTHCARE S.A.

	  	  
	  	  	  
	
By:

	/s/ Ignacio Martinez de Lecea	  	  
	
Name:

	Ignacio Martinez de Lecea	  	  
	
Title:

	Sr. Counsel ECEMEA	  	  
	  	  	  
	
By:

	/s/ Yvo Aobli	  	  
	
Name:

	Yvo Aobli	  	  
	
Title:

	Director, Finance	  	  

	
BAXTER INNOVATIONS GmbH

	  
	  	  
	
By:

	/s/ Christian Hrobar	  
	
Name:

	Christian Hrobar	  
	
Title:

	Corporate Counsel	  

 

	
By:

	/s/ Mag. Ulrike Weiss	  
	
Name:

	Mag. Ulrike Weiss	  
	
Title:

	Human Resources

  

  

  

Exhibit A

 to

Fourth Amendment to Standstill and Option Agreement

Baxter - Evaluation Study Proposal for Medgenics FVIII biopumps

I.           Prior to the Effective Date, Baxter will have determined FVIII base activity in NOD SCID mice

 

Week 22 / 2011: Blood samples will be drawn from 4 male and 2 female NOD SCID mice (several times) and FVIII activity will be measured by chromogenic assay in week 23/2011.   Target date for confirmation of acceptable baseline activity:  June 8.

Test :        Determination of FVIII by chromogenic

Duration:          1 week

II.          Proposed Evaluation Plan and timelines will ensue:

Baxter to implant Medgenics biopumps  in NOD SCID mice (non-hemophilic mice) using the needle implantation technique which Baxter’s personnel learned at Medgenics and tested at Baxter, per the following overall plan:

	
  

	
a.

	
Experimental implantation design - mice aged about 8 weeks :

 

	
  

	
1)

	
4 mice – subcutaneous implantation of 2 Factor VIII Biopumps

 

	
  

	
2)

	
4 mice – IP implantation of 2 Factor VIII Biopumps

 

	
  

	
3)

	
3 mice – subcutaneous implantation of 1 EPO Biopump

 

	
  

	
b.

	
Timelines (starting from receipt of Biopumps at Baxter in Vienna):

 

	
  

	
1)

	
In-vitro testing - media change upon receipt, sampled within first 3 days thereafter

 

	
  

	
2)

	
Implantation and 4 weeks of follow-up – bleedings shall be taken for sampling serum FVIII once per week

 

	
  

	
3)

	
After 4 weeks sacrifice mice and examine and photograph implant sites

 

	
  

	
4)

	
1 week of analysis

 

	
  

	
5)

	
1 week to generate report

 

Overall, project to last up to 8 weeks after delivery of Biopumps, for experimental work, sample testing and final report by Baxter.  .

  

  

  

III.         Timeline estimates:

	
  

	
1)

	
Wk 24

 

	
  

	
a.

	
Baxter ships two Incubators to Medgenics –

 

	
  

	
2)

	
Wk 24-26:  Preparation of Biopumps at Medgenics – approx. 2-3 weeks for preparation.

 

	 	
3)

	
Wk 26:   a) Baxter receives NOD SCID mice (7 weeks old)

 

	 	
b)

	
Shipment of biopumps to Baxter (approximately 9-10 Days after harvest) -

 

	 	
4.)

	
Wk 26/27:

 

	
  

	
a.

	
Receipt of biopumps at Baxter, media exchange upon receipt - (24-48 hrs for shipment):

 

	
  

	
b.

	
second media exchange and in vitro FVIII measurement 3 days after first media exchange.

 

	 	
c. 

	
Sampling of blood for FVIII baseline measurement

 

5.)  Early week 28: Implantation of biopumps into NOD SCID mice –

 

6.)  Wks 28-32:  collection of blood samples and FVIII activity testing –Target date for sacrifice of mice: week 32

 

7.)  Wks 33-34:  analysis, report writing – extra week fallback - Target date for report completion:  week 36.Unassociated Document

Exhibit 10.1

FROM OF MAKE GOOD SECURITIES ESCROW SUPPLEMENT AGREEMENT

 

THIS MAKE GOOD SECURITIES ESCROW SUPPLEMENT AGREEMENT (the “Make Good Supplement Agreement”), dated as of  June 30, 2011, is entered into by and among Orient Paper, Inc., a Nevada corporation (the “Company”), the investors listed on the Schedule of Buyers in the Securities Purchase Agreement dated October 7, 2009 (the “Buyers”), Zhenyong Liu (the “Principal Shareholder”) and Sichenzia Ross Friedman Ference LLP with an address at 61 Broadway, 32nd Floor, New York, NY 10006 (the “Escrow Agent”).

Capitalized terms used but not defined herein shall have the meanings set forth in the Securities Purchase Agreement (as defined below).

WITNESSETH:

WHEREAS, the Buyers purchased from the Company an aggregate of 2,083,333 reverse-split adjusted shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), for a total aggregate purchase price of approximately $5,000,000 in a private placement financing transaction (the “Financing Transaction”) pursuant to a Securities Purchase Agreement dated October 7, 2009 (the “Closing Date”) by and among the Company and the Buyers (the “Securities Purchase Agreement”);

WHEREAS, as an inducement to the Buyers to enter into the Securities Purchase Agreement, the Principal Shareholder had agreed to place the Escrow Shares (as defined in the Make Good Agreement) into escrow for the benefit of the Buyers in the event the Company fails to achieve the following financial performance thresholds for the 12-month periods ended December 31, 2009 (“2009”) and December 31, 2010 (“2010”):

(a)           In 2009, Net Income, as defined in accordance with United States generally accepted accounting principles (“US GAAP”) and reported by the Company in its audited financial statements for 2009 (the “2009 financial statements”) equals or exceeds $10,000,000 (the “2009 Performance Threshold”);

(b)           In 2010, Net Income, as defined in accordance with US GAAP and reported by the Company in its audited financial statements for 2010 (the “2010 financial statements”) exceeds $18,000,000 (the “2010 Performance Threshold”); and

WHEREAS, the Company, the Buyers and the Principal Shareholder had requested that the Escrow Agent hold the Escrow Shares on the terms and conditions set forth in the Make Good Securities Escrow Agreement dated October 7, 2009 (the “Make Good Agreement”) and the Escrow Agent has agreed to act as escrow agent pursuant to the terms and conditions of that agreement.

WHEREAS, the Company had missed its 2010 Performance Threshold and after consultation with the Buyers, the Principal Shareholder and the Buyers have agreed that the former shall deliver or cause to be delivered to the Buyers 51,011 Escrow Shares as full and final settlement and restitution to the Buyers for failing to meet the 2010 Performance Threshold on the terms and conditions hereinafter appearing.

NOW, THEREFORE, in consideration of the mutual conditions and covenants contained in this Agreement, and for other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, it is hereby stipulated, consented to and agreed by and between the parties as follows:

	
1.  

	
The Principal Shareholder agrees to and shall forthwith deliver or cause to be delivered 51,011 Escrow Shares (the “Settlement Shares”) to the Buyers in full and final settlement and restitution to the Buyers for failing to meet its 2010 Performance Threshold.  In particular, the Principal Shareholder shall cause the Company to deliver to Escrow Agent detailed written instructions, substantially in the form attached hereto and marked “Annex A” on the delivery of the Settlement Shares to each Buyer and undertakes to take all actions necessary to effectuate the said transfer of Escrow Shares to each Buyer.

 

  

  

  

 

	
2.  

	
Upon receipt of the Settlement Shares, each of the Buyers fully releases and discharges Principal Shareholder and the Company (the “Releasees”), the Releasees’ heirs, executors, administrators, parent company, holding company, subsidiaries, successors, predecessors, officers, directors, principals, control persons, current and former registered representatives, past and present employees, attorneys, insurers, and assigns from all actions, cause of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, against the Releasees, that Buyers or their heirs, executors, administrators, successors and assigns ever had, now has or hereafter can, shall or may, have for, upon, or by reason of or in relation to the 2010 Performance Threshold, whether or not known or unknown, from the beginning of the world to the day of the date of this Make Good Supplement Agreement.

	
3.  

	
Buyers warrant and represent that no other person or entity has any interest in the matters released herein, and that they have not assigned or transferred, or purported to assign or transfer, to any person or entity all or any portion of the matters released herein.

	
4.  

	
Each party shall be responsible for their own attorneys’ fees and costs.

	
5.  

	
All parties acknowledge and represent that: (a) they have read this Make Good Supplement Agreement; (b) they clearly understand the Make Good Supplement Agreement and each of its terms; (c) they fully and unconditionally consent to the terms of this Make Good Supplement Agreement; (d) they have had the benefit and advice of counsel of their own selection; (e) they have executed this Make Good Supplement Agreement, freely, with knowledge, and without influence or duress; (f) they have not relied upon any other representations, either written or oral, express or implied, made to them by any person; and (g) the consideration received by them has been actual and adequate.

	
6.  

	
This Make Good Supplement Agreement contains the entire agreement and understanding concerning the subject matter hereof between the parties and supersedes and replaces all prior negotiations, proposed agreement and agreements, written or oral.  Each of the parties hereto acknowledges that neither any of the parties hereto, nor agents or counsel of any other party whomsoever, has made any promise, representation or warranty whatsoever, express or implied, not contained herein concerning the subject hereto, to induce it to execute this Make Good Supplement Agreement and acknowledges and warrants that it is not executing this Make Good Supplement Agreement in reliance on any promise, representation or warranty not contained herein.

	
7.  

	
This Make Good Supplement Agreement may not be modified or amended in any manner except by an instrument in writing specifically stating that it is a supplement, modification or amendment to the Make Good Supplement Agreement and signed by each of the parties hereto.

	
8.  

	
Should any provision of this Make Good Supplement Agreement be declared or be determined by any court or tribunal to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be severed and deemed not to be part of this Agreement.

	
9.  

	
The parties hereto expressly agree that this Make Good Supplement Agreement shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of New York, without regard to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. Any action to enforce, arising out of, or relating in any way to, any provisions of this Make Good Supplement Agreement shall only be brought in a state or Federal court sitting in New York City, Borough of Manhattan.

  

  

  

 

IN WITNESS WHEREOF, the parties have duly executed this Make Good Supplement Agreement as of the date first indicated above.

 

	 	

ORIENT PAPER, INC.

By: ______________________________

Name: Zhenyong Liu

Title: Chief Executive Officer

ESCROW AGENT:

SICHENZIA ROSS FRIEDMAN FERENCE LLP

By: ______________________________

Name: Gregory Sichenzia

Title: Partner

PRINCIPAL SHAREHOLDER:

By: ______________________________

Name: Zhenyong Liu

Title:

BUYER:

Name of Buyer

By: ______________________________

Name:

Title:

 

  

  

  

ANNEX A

 

Orient Paper, Inc.

NansanGongli, Nanhuan Rd, Xushui County

Baoding City, Hebei Province

The People’s Republic of China 072550

 

Date:

 

	
To: 

	
Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor,

New York, NY 10006

Attention: Mr. Benjamin Tan, Esq.

Re: Make Good Securities Escrow Agreement dated as of October 7, 2009, entered into by and among Orient Paper, Inc., the investors listed on the Schedule of Buyers in the Securities Purchase Agreement dated October 7, 2009, Zhenyong Liu and Sichenzia Ross Friedman Ference LLP (the “Agreement”).

Dear Sir:

Pursuant to the Agreement, you are hereby instructed, authorized and directed, as Escrow Agent for the Escrow Shares to instruct JPMorgan Chase Bank, N.A. as custodian for the Escrow Shares, to transfer or cause the transfer of the number of Escrow Shares to the names of the Buyers, in the denominations and to the addresses as set for in Schedule I attached hereto.

Thank you for your assistance with this matter.

 

	 	Very truly yours	 
	 	 	 
	 	

By: _________________________

Name: Zhenyong Liu

Title: Chief Executive Officer

	 

 

  

  

  

Schedule I

	
Name

	
Address

	
# of Escrow Shares

	
Social Security # /

I.R.S. #

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