LOCK UP AND VOTING AGREEMENT
EXHIBIT
10.3
LOCK UP
AND VOTING AGREEMENT dated November 2, 2008 (the “Voting Agreement”) is
by and between NEOSTEM, INC., a Delaware corporation (the “Parent”), The CHINA
BIOPHARMACEUTICALS HOLDINGS, INC., a Delaware corporation (the “Company”), and the
individuals or entities listed on Schedule A annexed
hereto (collectively, the “Stockholders” and
each individually is a “Stockholder”).
RECITALS
WHEREAS,
concurrent with the execution of this Voting Agreement, the Company, Parent and
CBH Acquisition LLC (“Subco”), a Delaware
limited liability company and a wholly owned subsidiary of Parent, have entered
into an Agreement and Plan of Merger dated of even date herewith (as amended
from time to time, the “merger agreement”)
pursuant to which the Company, which owns 51% of the equity of Suzhou Erye
Pharmaceuticals Co. Ltd (“Erye”), will be
merged with and into Subco with Subco continuing as the surviving company and as
a direct wholly owned subsidiary of Parent (the “merger”);
WHEREAS,
the Stockholders are the record and beneficial owners of certain shares of
common stock, par value $0.001 per share, of the Parent (the “Common Shares”) in
the amounts set forth opposite the Stockholder’s name on Schedule A hereto,
and/or may become, at any time after the date hereof, the record and beneficial
owners of shares of capital stock of Parent (the Common Shares and any shares of
capital stock of Parent that may be acquired after the date hereof are
collectively referred to herein as the “Shares”);
and
WHEREAS,
as an inducement and a condition to entering into the merger agreement, the
Company desires that each of the Stockholders agree, and each of the
Stockholders is willing to agree, to enter into this Voting
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parent, the Company and each of the Stockholders, intending to be legally bound,
hereby agree as follows:
1. Certain
Definitions. In addition to the terms defined elsewhere
herein, capitalized terms used and not defined herein have the respective
meanings ascribed to them in the merger agreement. For purposes of
this Voting Agreement:
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(a)
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“Beneficially Own” or
“Beneficial
Ownership” with respect to any securities means having “beneficial
ownership” of such securities as determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
including pursuant to any agreement, arrangement or understanding, whether
or not in writing. Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom
such Person would constitute a “group” within the meaning of Section
13(d)(3) of the Exchange Act.
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(b)
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“Person” means any
individual, corporation, partnership, limited liability company, joint
venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any
agency or political subdivision
thereof.
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2. Disclosure. Each
of the Stockholders hereby agrees to permit the Company and Parent to publish
and disclose in the Company’s Proxy Statement, and any press release or other
disclosure document which Parent and the Company reasonably determine to be
necessary or desirable in connection with the merger and any transactions
related thereto, each Stockholder’s identity and ownership of the Shares and the
nature of each Stockholder’s commitments, arrangements and understandings under
this Voting Agreement.
3. Voting of
Shares. Each of the Stockholders, to the extent they are holders of
Shares, in satisfaction of all contractual and legal requirements, hereby: (i) consents to the
Parent’s execution and delivery of the merger
agreement and the taking of all actions by the Company to effect the merger; and
(ii) agrees that, during the period commencing on the date hereof and
continuing until the Termination Date (as defined below), contemporaneously with
any meeting of the holders of the Shares, however called, or in connection with
any written consent of the holders of the Shares, the Stockholder shall cause
the Shares held of record
or Beneficially Owned by the Stockholder, whether now owned or hereafter
acquired, to consent in writing to the merger, adoption of the merger agreement
and any actions required in furtherance thereof.
4. Covenants, Representations and
Warranties of the Parent and each Stockholder. Each of the
Stockholders hereby severally represents and warrants (with respect to such
Stockholder only and not with respect to each other Stockholder) to, and agrees
with, the Company as follows:
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(a)
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Ownership of
Securities. Such Stockholder is the sole record and
Beneficial Owner of the number of shares set forth opposite such
Stockholder’s name on Schedule A
hereto. On the date hereof, the Shares set forth opposite the
Stockholder’s name on Schedule A
hereto constitute all of the Shares or other securities of the Parent
owned of record or Beneficially Owned by such Stockholder or with respect
to which such Stockholder has voting power by proxy, voting agreement,
voting trust or other similar instrument. Such Stockholder has
sole voting power and sole power to issue instructions with respect to the
matters set forth in Section 3 hereof, sole power of disposition, sole
power of conversion, sole power to demand and waive appraisal rights and
sole power to agree to all of the matters set forth in this Voting
Agreement, in each case with respect to all of the Shares set forth
opposite such Stockholder’s name on the signature page hereof, with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws, and the terms of this Voting
Agreement.
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(b)
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Authorization. Such
Stockholder has the legal capacity, power and authority to enter into and
perform all of such Stockholder’s obligations under this Voting
Agreement. The execution, delivery and performance of this
Voting Agreement by such Stockholder will not violate any other agreement
to which such Stockholder is a party including, without limitation, any
voting agreement, stockholders agreement, voting trust, trust or similar
agreement. This Voting Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes a valid and
binding agreement enforceable against such Stockholder in accordance with
its terms. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which such Stockholder is a
trustee whose consent is required for the execution and delivery of this
Voting Agreement or the consummation by such Stockholder of the
transactions contemplated hereby. If such Stockholder is
married and such Stockholder’s Shares constitute community property, this
Voting Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such Stockholder’s spouse,
enforceable against such person in accordance with its
terms.
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(c)
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No
Conflicts. (i) Except as may be required
under Section 13 of the Exchange Act, no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Voting Agreement by such
Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby and (ii) none of the execution and delivery of this
Voting Agreement by such Stockholder, the consummation by such Stockholder
of the transactions contemplated hereby or compliance by such Stockholder
with any of the provisions hereof shall (A) conflict with or result in any
breach of the organizational documents of such Stockholder (if
applicable), (B) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of
any kind to which such Stockholder is a party or by which such Stockholder
or any of its properties or assets may be bound, or (C) violate any order,
writ injunction, decree, judgment, order, statute, rule or regulation
applicable to such Stockholder or any of its properties or
assets.
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(d)
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No
Encumbrances. Such Stockholder’s Shares at all times
during the term hereof will be Beneficially Owned by such Stockholder,
free and clear of all liens, claims, security interests, proxies, voting
trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever.
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(e)
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No
Solicitation. Such Stockholder agrees not to take any
action inconsistent with or in violation of the merger
agreement.
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(f)
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Restriction on Transfer;
Proxies and Non-Interference. At any time during the
period (the “Lock-Up
Period”) from the date hereof until the earlier of (i) one hundred
and eighty (180) days following the closing of the Merger or (ii) the
termination of the Merger Agreement, such Stockholder shall not, directly
or indirectly, (i) except for a Permitted Transfer (as defined below) and
except as contemplated by the merger agreement, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of, any or all of any
such Stockholder’s Shares, or any interest therein, whether such shares
are held by such Stockholder as of the date hereof or are acquired by such
Stockholder from and after the date hereof, whether in connection with the
merger or otherwise (together with the Shares, the “Lock-Up
Shares”), (ii) except as contemplated by this Voting Agreement,
grant any proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement with respect to the Lock-Up Shares,
or (iii) take any action that would make any representation or warranty of
such Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling such Stockholder from performing such
Stockholder’s obligations under this Voting
Agreement.
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(g)
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Reliance by the
Company. Such Stockholder understands and acknowledges
that the Company is entering into the merger agreement in reliance upon
such Stockholder’s execution and delivery of this Voting
Agreement.
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(h)
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Permitted
Transfer. Notwithstanding the foregoing or any other
provision of this Agreement to the contrary, any Stockholder may sell or
transfer any Shares to any Stockholder or any other Person who executes
and delivers to the Company an agreement, in form and substance acceptable
to the Company, to be bound by the terms of this Agreement to the same
extent as the transferring Stockholder (any such transfer, a “Permitted
Transfer”).
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5. Stop Transfer
Legend.
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(a)
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Each
of the Stockholders agrees and covenants to the Company that such
Stockholder shall not request that the Parent register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of such Stockholder’s Shares, unless such transfer is
made in compliance with this Voting
Agreement.
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(b)
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Without
limiting the covenants set forth in paragraph (a) above, in the event of a
stock dividend or distribution, or any change in Shares by reason of any
stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, other than pursuant to the merger, the term “Shares”
shall be deemed to refer to and include any and all shares into which or
for which any or all of the Shares may be changed or exchanged, and
appropriate adjustments shall be made to the terms and provisions of this
Voting Agreement.
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6. Further
Assurances. From time to time until the expiration of the
Lock-Up Period, at the Company’s request and without further consideration, each
Stockholder shall execute and deliver such additional documents and take all
such further lawful action as may be necessary or desirable to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Voting Agreement.
7. Stockholder
Capacity. If any Stockholder is or becomes during the term
hereof a director or an officer of the Parent, such Stockholder makes no
agreement or understanding herein in his capacity as such director or
officer. Each of the Stockholders signs solely in his or her capacity
as the record and Beneficial Owner of the Stockholder’s Shares.
8. Termination. Except
as otherwise provided herein, the covenants and agreements contained herein with
respect to the Shares shall terminate upon the earlier of (a) the Termination
Date regardless of the circumstances or (b) the expiration of the Lock-Up
Period.
9. Miscellaneous.
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(a)
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Entire
Agreement. This Voting Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter
hereof.
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(b)
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Certain
Events. Subject to Sections 4(f) and (g) hereof, each of
the Stockholders agrees that this Voting Agreement and the obligations
hereunder shall attach to each such Stockholder’s Shares and shall be
binding upon any Person to which legal or Beneficial Ownership of such
Shares shall pass, whether by operation of law or otherwise, including
without limitation, each Stockholder’s heirs, guardians, administrators or
successors. Notwithstanding any such transfer of Shares, the
transferor shall remain liable for the performance of all obligations
under this Voting Agreement.
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(c)
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Assignment. This
Voting Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the Company in the case of an
assignment by any Stockholder and each Stockholder in the case of any
assignment by the Company; provided that the Company may assign, in its
sole discretion, its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Company, but no such assignment
shall relieve the Company of its obligations hereunder if such assignee
does not perform such obligations.
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(d)
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Amendment and
Modification. This Voting Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except
upon the execution and delivery of a written agreement executed by the
parties hereto affected by such
amendment.
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(e)
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Notices. Any
notice or other communication required or which may be given hereunder
shall be in writing and delivered (i) personally, (ii) via telecopy, (iii)
via overnight courier (providing proof of delivery) or (iv) via registered
or certified mail (return receipt requested). Such notice shall be deemed
to be given, dated and received (i) when so delivered personally, via
telecopy upon confirmation, or via overnight courier upon actual delivery
or (ii) two days after the date of mailing, if mailed by registered or
certified mail. Any notice pursuant to this section shall be delivered as
follows:
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If to the
Stockholder, to the address set forth for the Stockholder on Schedule A to this
Voting Agreement.
If to
Parent:
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copies to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the
Company:
China
Biopharmaceuticals, Inc.
▇▇. ▇▇▇,
▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, China, 215000
Attention:
▇▇▇▇▇ ▇▇▇
Telecopy:
_______________
with a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP
The
Chrysler Building
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
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(f)
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Severability. Whenever
possible, each provision or portion of any provision of this Voting
Agreement will be interpreted in such a manner as to be effective and
valid under applicable law but if any provision or portion of any
provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or portion of any provision of this Voting
Agreement in such jurisdiction, and this Voting Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never
been contained herein.
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(g)
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Specific
Performance. Each of the parties hereto agrees,
recognizes and acknowledges that a breach by it of any covenants or
agreements contained in this Voting Agreement will cause the other parties
to sustain damages for which they would not have an adequate remedy at law
for money damages, and therefore each of the parties hereto agrees that in
the event of any such breach any aggrieved party shall be entitled to the
remedy of specific performance of such covenants and agreements (without
any requirement to post bond or other security and without having to prove
actual damages) and injunctive and other equitable relief in addition to
any other remedy to which it may be entitled, at law or in
equity.
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(h)
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Remedies
Cumulative. All rights, powers and remedies provided
under this Voting Agreement or otherwise available in respect hereof at
law or in equity shall be cumulative and not alternative, and the exercise
of any such rights, powers or remedies by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by
such party.
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(i)
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No
Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Voting Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and
any custom or practice of the parties at variance with the terms hereof,
will not constitute a waiver by such party of its right to exercise any
such or other right, power or remedy or to demand such
compliance.
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(j)
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No Third Party
Beneficiaries. This Voting Agreement is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
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(k)
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Governing
Law. This Voting Agreement will be governed and
construed in accordance with the laws of the State of Delaware, without
giving effect to the principles of conflict of laws
thereof.
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(l)
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Submission to
Jurisdiction. Each party to this Voting Agreement
irrevocably consents and agrees that any legal action or proceeding with
respect to this Agreement and any action for enforcement of any judgment
in respect thereof will be brought in the state or federal courts located
within the jurisdiction of the United States District Court for the
Southern District of New York, and, by execution and delivery of this
Voting Agreement, each party to this Voting Agreement hereby irrevocably
submits to and accepts for itself and in respect of its property,
generally and unconditionally, the exclusive jurisdiction of the aforesaid
courts and appellate courts from any appeal thereof. Each party
to this Voting Agreement further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof in the manner set forth in
Section 9(e). Each party to this Voting Agreement hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Voting Agreement brought in the courts
referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient
forum. Nothing in this Section 9(l) shall be deemed to
constitute a submission to jurisdiction, consent or waiver with respect to
any matter not specifically referred to
herein.
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(m)
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WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING IN CONNECTION WITH
THIS VOTING AGREEMENT.
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(n)
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Description
Headings. The description headings used herein are for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Voting
Agreement.
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(o)
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Counterparts. This
Voting Agreement may be executed in counterparts, each of which will be
considered one and the same Voting Agreement and will become effective
when such counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
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(p)
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No
Survival. No representations, warranties and covenants
of the Stockholder in this Agreement shall survive the
merger. The Stockholder shall have no liability hereunder
except for any willful and material breach of this Agreement by the
Stockholder.
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(q)
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Action in Stockholder Capacity
Only. The parties acknowledge that this Agreement is
entered into by each Stockholder solely in such Stockholder’s capacity as
the beneficial owner of such Stockholder’s Shares and, notwithstanding
anything herein to the contrary, nothing in this Agreement in any way
restricts or limits any action taken by such Stockholder or any designee
or related party of such Stockholder in his or her capacity as a director
or officer of the Company and the taking of any actions in his or her
capacity as an officer or director of the Company will not be deemed to
constitute a breach of this Agreement, regardless of the circumstances
related thereto.
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[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, Parent and each of the Stockholders have caused this Voting
Agreement to be duly executed as of the day and year first above
written.
| NEOSTEM, INC. | |||
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By:
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| Name | |||
| Title | |||
| CHINA BIOPHARMACEUTICALS HOLDINGS, INC. | |||
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By:
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| Name | |||
| Title | |||
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| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Director | |||
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| ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Director | |||
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| ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Director | |||
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| ▇▇▇▇▇ ▇. May | |||
| Vice President and Chief Financial Officer | |||
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| ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Vice President and General Counsel | |||
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| ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| President and Director | |||
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| ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Chief Executive Officer and Chairman of the Board | |||
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