Translated from the original Chinese version]
[Translated
from the original Chinese version]
[***] —
Certain information in this exhibit has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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Supplier ( Party A): Hainan
Zhonghe Pharmaceutical Co. Ltd.
Address:
Xx.000 Xxxxxx Xxxxxx,
Xxxxxx, Free Trade Zone.
Purchaser(Party
B): Beijing
Yabaofangda Pharmaceutical Limited.
Address: 000, Xxxxx 0, Xxxxxxxx0,
Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
In
accordance with “Contract Law of the People’s Republic of China”, the Parties
have through sufficient consultations, based on the principles of mutual
reciprocity, friendly cooperation and corporate development, entered into the
Agreement, Party A hereby authorizes Party B to distribute, on behalf of Party
A, Party A’s product Desmopressin
Acetate Injection (4μg/shot) (hereinafter referred as “Product”) for
China (Except for Hubei, Henan, Guangdong province).
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I.
Corporate Product
General
name: Desmopressin Acetate Injection;
Specification:
4μg/shot
Package:
10 shot/box, 600 shot/piece ;
II
Cooperation
1. Party
appoints Party B as sole exclusive distributor for all area through China
(Except for Hubei, Henan and Guangdong province), Party A shall not, during the
period of this Agreement, in any way or by any reason, appoint any other party
to or by itself sell the Product, otherwise it will pay to Party B a
compensation equal to 2-fold of sale amount proceeded from such activity. Party
B shall not in any way or by any reason deputize any other manufacturer’s
product of the same kind, otherwise it will pay to Party A compensation equal to
2-fold of its sale amount proceeded from such activity, meanwhile the
authorization be cancelled correspondingly.
2. Party
A shall provide product meet national statutory standard according to order plan
set by Party B. Party A shall guarantee that the amount to be supplied and term
of delivery are in accordance with Party B’s requirements.
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3. Party
B will take charge the design of promotional material for the Product (should be
in conformity with “Drug Control Law of the Peoples Republic of China”),
autonomously propagandize, spread and sell the Product and bear the expense
caused herewith, the plan for design shall be filed with Party A after their
acceptance by Party A.
4. During
the period of cooperation, both parties have the responsibilities to main the
other party’s reputation and market image.
III
Term of Market Development, Term of Cooperation, Sale Target and Assessment and
Incentives
1. Term
of Cooperation: 5
Year
Both
parties agree that the term of cooperation is 5 years (from
February 19, 2008 to December 31, 2012). Upon termination of the cooperation,
the contract could be renewed between both parties to another year provided that
Party B fulfill sale target.
2. Sale
Target
(1) First
year: yearly sale amount: [**] shots (term:
February 19, 2008 to December 20, 2008)
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Detail
target to each stage:
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Feb
19
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Mar
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Apr
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May
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Jun
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Jul
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Aug
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Sep
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Oct
|
Nov
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Dec
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|
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***
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***
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***
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***
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(2)
Within the contractual period, during the first 3 years, the second year’s sale
amount shall have a proportionally increasing rate no less than 25% compared
with last year’s actual sale amount (calculated by quantity), the sale target
and schedule of another year will be signed solely as appendix thereof, which
shall have the same legal force with the Agreement.
3.
Performance Assessment
In the
first cooperating year, Party will quarterly assess Party B’s sale performance
which shall not be less than 100% of commission amount in to whole year’s
target, otherwise Party A has the right to cancel the sole exclusive agent
license of the Product and withhold the deposit. If Party B fulfill the sale
target at the terms agreed on upon the termination of this Agreement, Party B
will have the deposit refund. Party A shall net the deposit against payment for
goods.
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IV
Settlement Price, Advance, Payment Term
1.
Settlement Price for Product:
1) Price
Party A supply Party B
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Product
Name
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Specification
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甲方供货价
|
|
Desmopressin
Acetate Injection
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4μg/shot
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Supply
Price
[
*** ]
|
2) Both
parties agree that under the circumstance the relevant competent department
(e.g. National Development and Reform Commission) adopt price-lowering policy on
the Product, the changed supply price be settled by negotiation by both parties.
The changed price herewith shall be accepted by both parties and signed as
appendix thereof, which shall have prior legal right to this
Agreement.
1)
Deposit (hereinafter called “Deposit”) for Party B generally distributing the
Product is RMB[***]
Yuan. Within 7 working days after signature of this Agreement Party B
shall remit the Deposit and down payment with amount of RMB[***] Yuan,
amounting to RMB[****]
Yuan in total to the account appointed by Party A, if Party delays in
payment, Party A is entitled to cancel this Agreement.
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2) Party
A shall make VAT invoice to Party B according to supply price.
3) If it
is agreed between both party to terminate this Agreement, Party may return the
Deposit in accordance with negotiation scheme.
4) By the
end of 25th of
every month, Party B must remit to the appointed account the full payment
pursuant to monthly sale target set in this Agreement.
V
Order, Consignment, Delivery, Examine
1.
Order:
Party B
should give 2 months notice to Party A before it delivery plan of loading. The
first loading shall not be less than [***]
shots.
2.
Consignment
1) Party
A shall organize production and shipping in according to orders planned by party
B as well as 30% of prepayment, the shipment shall be air transportation (non-cold storage),
the related cost will be covered by Party A.
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2) If
Party A fails to delivery goods in accordance with order plan (except for force
majeure), Party A shall give notice and explain to Party B and delivery can be
deferred only after Party B’s acceptance and agreement, otherwise Party A shall
pay Party B a compensation equal to 1% per day of payment of that batch. If
Party B requires loading ahead of the schedule, it shall make a written
application to Party A.
3) Party
B should pick up the planned-goods in time, if overdue for more than one month,
Party A is entitled to charge 0.1% per day of goods value (settlement price) as
storage management fee.
3.
Delivery
The
delivery point is cities designed by Party B, namely the one-off site noted by
Party B in delivery application (within effect delivery scope of freighting
company).
4.
Examine
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1) Party
B shall check appearance details including product name, amount, batch quantity,
package, etc., if there is any defect (name error, wrong batch quantity,
shortage in amount, damaged package, etc.), Party B shall check with freighting
company or do not pick up temporarily and notice Party A for returning by right
of written document provided by freighting company, it shall be Party A’s
responsibility to pursue freighting responsibilities at its’ own
cost.
2) If
during sale it is found by customer shortage of goods in packing box, Party A
shall confirm the shortage and fill the lack in accordance to proving documents
provided by customer.
VI
Market Converting
From the
date of this Agreement is signed, Party A and B shall perform market converting
for the Product, Party B has both rights and responsibilities to guarantee
smooth transition of present market.
1.
Content of Convert:
1) The
situation of project bidding in each area (including: A. bidding area; B.
entrusted biding persons or institutions; C. situation of successful bids; D.
situation of non-opening bids or failed bids.)
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2) The
contact of involved Party A’s personnel.
2. After
signature of this Agreement, Party A shall inform all other regional
distributors to cancel agreements or contracts signed before and hand over to
Party B, Party B will negotiate and sign new distributing agreements with
regional distributors.
3. After
signature of this Agreement, Party A shall provide Party B power of attorney of
the Product and relevant evincive documents.
4. From
the date this Agreement signed, selling routine work in authorized areas will be
in Party B’s charge, Party A shall make Party B known if there is any regional
distributor demands the Product; if Party A privately sell the Product to any
third party other than Party B who will be entitled the right to lay a
compensation equal to 2 fold of the selling amount proceed from such
activity.
VII
Quality Guarantee of Product, Package and Trademark
1.
Quality Guarantee
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Party A
promise produce eligible product in conformity with “Drug Control Law of the
Peoples’ Republic of China”) and bear whole responsibilities regarding the
Product quality. Any economic loss caused by quality thereby shall be charged to
Party A.
2.
Package and Trademark:
For
marketing purpose, Party B may propose on designing new package for the Product
and provide for registering trademark which may be used for the product after
negotiation with Party A and get consent, the packing material change is at
Party B’s cost.
VIII
Responsibility and Obligation
1. Party
B’s Responsibility and Obligation:
1) Party
B owe sole exclusive agent rights through the country (except Hubei, Henan and
Guangdong province);
2) Party
B shall spare no efforts to plan, spread and sell the Product, market coverage
rate shall reach 80% and above in order to achieve annual target.
3) Party
B shall take chare of reporting price matters for all authorized areas except
Hainan province.
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4) Party
B shall take all responsibilities regarding selling activities like payment,
invoice. If Party B drops invoice made by Party A whose related legal
consequences undertake by Party B, as well as tax lose due to reopen the
invoice. If Party B violates the related national laws rules and regulations, it
shall undertake all responsibilities caused thereby.
5) Party
B shall not transfer any authorized credit, debt and all other ownership and
obligation as well to other parties, either can Party B use the authorization to
guarantee for any content.
6) Parry
B shall strive to improve tendering quality to ensure success in provinces,
provincial cities and other large and medium cities, and the ratio of winning
bids shall not be less than 80%, strictly forbid malicious bidding, all price
quoted must receive Party A’s consent, try to maintenance a stable price
system.
2. Party
A’s Responsibility and Obligation:
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1) Party
A promises the Product meet national quality standard and undertake related
responsibilities caused by quality problems. In case goods which had been
already unloaded at appointed location has quality problem due to storage or
circulation links, Party B shall under take the loss by itself.
2) Within
contractual term, Party A shall not, in any way or by any reason, sell the
Product to any units or individuals in authorized areas;
3) Party
A shall draw Party B letter of Authorization for national sole exclusively
distributing the Product (except Hubei, Henan and Guangdong Province), and
timely provide Party B business license, manufacture license, CMP certification,
and product-related new drug certification, packing specimen, tender book
regarding bidding and selling as well as relevant formalities and materials
(additional fees for provincial checking and reporting under Party B’s one-side
request shall covered by itself).
4) Party
A shall organize production and shipping in accordance with orders put by Party
B and make sure Party B be able to receive the Product in time.
5) Any
dispute and other issues related to the Product produced before signature of
this Agreement shall be settled by Party A.
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6) Party
A has the right to cancel this Agreement without advanced notice to or
negotiation with Party B under any two conditions among followings. Party B
hereafter shall faithfully perform its obligation under this Agreement and
transfer national agency and sale business to Party B without compensation to
terminate business between both parties, and cooperation ends
hereby.
1> If
Party B fails to pay the Deposit and price for sale in a timely
manner;
2> If
Party B fails to achieve 90% of monthly sale target as appointed;
3> If
Party B disturbs the price system established by Party A or proceeds unfair
competition and moreover does not obey correcting instruction put forwards by
Party A;
4> If
Party B dose not provide Party A sales reports according to rule, provides
fraudulent reports or refuses to go through inspection on sales category and
book-keeping as well as other inspections Party A think as
necessary;
5>
When Party B disobey the selling rule set by Party A or purchase the same kind
of products from other sources than Party A;
6>
When Party B applies for bankruptcy due to compulsory execution by other
creditors or reduces its registered capital in its own right or cancels, changes
sales business or dissolves company;
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7>
When Party B’s business license is cancelled by government or law departments,
shuts down, is punished to cancel business registration, or is compelled to
cancel or dispose the category for sale.
IX
Liability for Breach, Dispute Resolution, Modification and Termination of
Contract
1.
Liability for Breach
1) During
the contractual period, where one party fails to fulfill the Agreement, that is,
break the contract, it must pay penalty to compensate the loss of other
party’s;
2) Where
Party A does nothing against terms of this Agreement whereas Party B
unilaterally terminate the Agreement, Party A has the right not return the
Deposit;
3) Where
Party B does nothing against terms of this Agreement whereas Party A
unilaterally terminate the Agreement, Party A must return the Deposit to Party B
immediately and compensate Party B for market development and
spreading.
2.
Dispute Resolution
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Disputes
arisen from performing this Agreement shall be mediated and settled through
consultation between two parties. If all attempts fail, the two parties can
appeal a lawsuit to people's court of the place where the defendant has its
domicile a lawsuit
3.
Modification and Termination of Contract
1) Where
there is a need to modify terms of this Agreement because of change in market
environment, relevant national policy, the modification shall be consulted and
settled by both parties. The new term or agreement reached hereby is appendix of
this Agreement and has equal effect.
2) If and
to the extent this Agreement is to be early terminated because of change in
national policy or by force majeure, both parties shall notify the other party
30 days in advance, this Agreement may be terminated provided that both parties
confirm the termination and complete all converting procedure and the payment is
settled.
3) For
other reasons (except for force majeure) Party B request to terminate the
Agreement, it shall make a notice to Party 30 days in advance, the Agreement can
be terminated if both parties reach a consensus through
consultation.
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X
Others
1. On the
date the down payment and Deposit from Party B arrives at the account appointed
by Party A, this Agreement will come into effect with valid period of 5 years
and can be renewed on expiration.
2. This
Agreement is in two copies with equal legal effect for each
parties.
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Party A: Hainan
Zhonghe Pharmaceutical Limited.
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Party B: Beijing Yabaofangda
Pharmaceutical Limited.
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Party
A (or Authorized agent)
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Party
B (or Authorized agent)
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signature:
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/s/ Authorized agent
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signature:
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/s/ Authorized agent
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Date:
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November
1, 2008
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Date:
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November
1, 2008
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