The Agreement Of Jointly Establishment of Kunming Shenghuo Pharmaceutical Science & Technology Development Co., Ltd
Exhibit
10.8
The
Agreement
Of
Jointly
Establishment
of
Kunming
Shenghuo Pharmaceutical Science & Technology Development Co.,
Ltd
In
order
to exploit the resource of Yunnan Province, and to develop the high- technology
Yunnan medicine, the two parts through friendly negotiations, have agreed to
enter into the agreement:
1.
The two parts
Part
A:
Kunming
Shenghuo pharmaceutical (Group) Go.,Ltd
Address:
No.2, Jingyou Road, National-class Economic And Technological Development Zone,
Kunming, China
Post
code: 650217
Tel:
(0000) 0000000 Fax:
(0000)
0000000
Legal
Representative: Gui Hua Lan
Part
B: Beijing
University Shijia research Center
Adress:
Xxxxx Xxxx Cun, Beijing
Post
code: 100871
Tel:
(000) 00000000 Fax:
(000)
00000000
Legal
Representative:
2.
The jointly operated entity
Name:
Kunming Shenghuo Science &Technology Development Co., Ltd
Address:
The technology and quality Xxxxxxx Xxxxxxxx, Xx.0, Xxxxxxx Xxxx, National-class
Economic And Technological Development Zone
Post
Code: 650217
Tel:
(0000) 0000000 Fax:
(0000)
0000000
Legal
Representative: Gui Hua Lan
The
general manager: Ya Xxx Xxxx
The
vice
general manager: Xxxx Xxxx
The
registration organ: Kunming Administration for Industry and
Commerce
Registered capital: RMB ¥ 2 million Yuan
Registered capital: RMB ¥ 2 million Yuan
3.
The Operation Xxxxx and the Operation Scope of the entity
The
Operation Xxxxx:
Depending on the rare medicine herb resource and the national medicine in Yunnan
province, the
company will develop the high technology Yunnan Medicines whose main raw
material is Sanchi and promote the traditional Chinese Medicine with the aim
at
advancing the ability of Shenghuo Researchers and building Shenghuo
pharmaceutical researching system with the advantages of either Shenghuo produce
ability or the high-tech scientific manpower and advanced technology information
introduced from Beijing University.
The
Operation Scope: Research and technology transfer of Bulk drug, Chinese patent
medicine, chemical drugs, biological products, health products, cosmetic;
migrate and transfer the imported medicine; The importation and exportation
of
technology equipment and medicine technology.
Others:
Communicate with domestic and oversee research organization and administration
of medicine, and provide international technology support for Shenghuo Group
Company.
4.
The Ownership Structure
Part
A
hold 70% ownership of the jointly operated entity, who has the ownership of
technology and quality Control Building about 2,860 m2,
and
have 86 inspection or testing instruments ( amount to RMB¥7.86 million Yuan) and
will add RMB¥2 million for the entity’s flow cash.
Part
B
hold 30% ownership, who will supply enough senior technology researchers that
can meet the demands of technology research and education of master.
The
nature of jointly operated entity is Limited liability.
5.
The two parts’ rights and obligations
The
two
parts should enjoy the intellectual property right of research achievement
and
distribute right of operation profit by both equity ratio.
The
two
parts should burden operating losses by both equity ratio.
Dividing
the work as bellow:
Part
A:
(1) take charge in the register and declare work; (2) select and assign the
chairman of the board, vice-general manager and full time accountants; (3)
harmonize the relationship of personnel, work relation, pay the research outlay
on time; (4) harmonize the relationship with the government.
Part
B:
(1) dispatch the research leader and practice graduate students on time, no
less
5 person; (2) select and assign the general manager and relative lab principals,
organize the research work; (3) lay the study plans, reinforce the instrument
of
research and study, actualize the research assignment; (5) make professional
education though which staff can obtain higher degree and technological
training, to make sure the researchers improve the ability and
qualification.
6.
The organization structure of jointly operated entity
The
board
of shareholders is made up with Legal Representatives of two parts;
The
board
of direct is made up with the chairman of direct, the general manager (executive
direct), vice-general manager. The chairman of direct is the Legal
Representative, and the general manager and the vice-general manger are both
directors.
The
two
parts dispatch the pluralistic supervisor to make up with the board of
supervisor which take charge in the supervision of the direct board and the
executive group. The part A assign the chairman of board of
supervisor.
The
executive group is made up with general manager, vice-general manager, the
directors of laboratories (offices), the principals of accountants, it take
charge of the daily work of the company, and finish the dictate of the direct
board.
The
company will carry out the institution of the manager responsibility under
the
leading of direct board, the general manager is responsible to the whole work
and the operation result.
The
organization structure is as bellow:
The
board
of direct instructs
the executive group to constitute regulations of management and operator which
can adapt to the work quality request according to the national management
regulations; consummate the software and hardware of the research; manage the
company scientifically and achieve the furthest benefit.
| 7. |
Technology
Transfer
|
The
way
out for technological achievements is the industrialization by shareholders
or
their transfer to other enterprises. The ways of transfer is as
follows:
1) Price
Appraisal
The
manufacturing cost consists of wage, bonus, travel expenses, raw materials,
equipment depreciation, etc. for the project; the pricing is based on the costs,
and market mechanism shall be applied. The point is to stick to a collective
appraisal and to the “shareholders first” principle.
2) Ways
of
Transfer
Transfer
can be done by means of “one-time” pricing; it can also be done by means of
pricing for the advance payment, taking a percentage from the sales, becoming
a
shareholder after appraisal and changing for the enterprise’s stock right with
technological achievements.
| 8. |
Financial
Management
|
Separate
accounts shall be kept for the jointly operated entity, which shall assume
sole
responsibility for its profits or losses.
Sources
of Income:
(1)
RMB¥2 million Yuan share in cash from Party A as circulating fund; (2) the
balance to be borrowed from Party A; (3) the application for scientific research
funds to the government; (4) the transfer of technological achievements; (5)
the
income from entrusted manufacturing; (6) other incomes.
Expenditure:
(1)
wage, bonus, traveling expenses; (2) manufacturing and registration fees; (3)
low-value consumables; (4) depreciation of house property and equipments; (5)
expenses for public relations, etc.
Expenditure
for Fixed Assets: the
purchasing of fixed assets will be carried out after the jointly operated entity
prepare a plan and submit an application to Kunming Shenghuo Group Company.
This
cost will not be listed as the expenditure of the jointly operated entity.
Kunming Shenghuo Group Company is the owner of the fixed assets, and the jointly
operated entity has the right to use them.
Accounting:
The
monthly and annual financial reports shall be prepared by the accountants of
the
jointly operated entity and be sent to both Party A and Party B for inspection.
After being inspected and agreed by both the directorate and the supervision
group in January of the coming year, the annual losses and profits will be
honoured to the shareholders of both parties before the end of the
month.
| 9. |
Cooperation
Period
|
The
cooperation period is 10 years for the time being, starting from January 1,
2006
to December 31, 2015. The period can be prolonged upon negotiation by both
parties.
| 10. |
Default
|
| 1) |
During
the cooperation period, both parties shall devote themselves
wholeheartedly to the cooperation, so as to ensure the enterprise’s
achievements;
|
| 2) |
In
case of the inability by one party to continue the cooperation
due to
force majeure during the cooperation period, the default party
shall
notify the other party in written form 15 days in advance, and
negotiate
the solutions to the problems with the other party. It will be
regarded as
an act of default if one party break this agreement without reason.
The
default party shall compensate for the partial economic losses
suffered by
the other party.
|
| 3) |
In
case of disputes between both parties during the cooperation period,
both
parties shall settle them through friendly negotiation. If the
disputes
can not be solved, the suit shall be brought to the technology
arbitration
commission at the place where the agreement is signed or to the
people’s
court according to the Law of Technological Agreement.
|
This
agreement is prepared in four copies, one copy for each party, and one copy
for
the authorities of each party. This agreement will come into force upon being
signed and sealed by both parties.
Party
A
(Seal):
Signature
by Legal Representative:
Party
B
(Seal):
Signature
by Legal Representative:
Date:
January 1, 2006
