EXHIBIT 10.17(B)
OPERATION AGREEMENT
This Agreement is entered into by and between the following parties:
(1) Bridgetech Medical Technologies Research & Development Limited, a company
whose registered office is at Xxxx 0000-00, 00/X Xxxxxxxxx Xxxxxx II, 18
Harcourt Road, Admiralty, Hong Kong SAR, China ("BMT R& D"); and
(2) The Chinese University of Hong Kong at Shatin, New Territories, Hong Kong
SAR ("CUHK").
Services to be performed by CUHK: as detailed in Schedule A (the "SERVICES")
Obligations of BMT R&D: as detailed in Schedule B
IN WITNESS WHEREOF, these duly authorized representatives of the parties hereby
execute this Agreement, including all the terms and conditions and schedules
which follow.
for and on behalf of
XXX XXXXXXX XXXXXXXXXX XX XXXX XXXX
Signature: /s/ Xxxx, Xxxxx Man Xxx
--------------------------
Name: Xxxx, Xxxxx Man Wai (Ms)
Title: Director
Research and Technology
Administration Office
Date: May 24, 2006
for and on behalf of
BRIDGETECH MEDICAL TECHNOLOGIES
RESEARCH & DEVELOPMENT LIMITED
Signature: /s/ Xxxxxx X. Xxxx III
--------------------------
Name: Xxxxxx X. Xxxx III
Title: Director
Date: May 15, 2006
Page 1 of 7
1. ENGAGEMENT
1.1 BMT R&D hereby confirms the engagement of CUHK and CUHK hereby confirms its
agreement to make available to BMT R&D the Services upon and subject to the
terms set out in this Agreement.
1.2 The engagement of CUHK to provide the Services shall commence upon the
signing of this Agreement and shall terminate in accordance with CLAUSE 8
of this Agreement.
1.3 The Services under this Agreement shall be provided by CUHK in compliance
with the prevailing standard of accepted business practices and ethics. The
parties herein shall act in the best interests of each other at all times
subject to the terms of this Agreement.
1.4 BMT R&D and CUHK acknowledge and agree that the Services under this
Agreement shall not be provided to BMT R&D on an exclusive basis. This
Agreement shall not be construed to limit CUHK's ability to perform
services to third parties which are identical or similar to the Services.
2. CUHK'S UNDERTAKINGS
CUHK warrants and undertakes to BMT R&D that:
(a) CUHK will provide the Services in Schedule A;
(b) CUHK will provide advice to BMT R&D in relation to the Services; and
(c) the Services will conform to the standards generally observed in the
industry for similar services.
3. BMT R&D'S OBLIGATIONS
BMT R&D shall be responsible for the performance of the obligations in
Schedule B, and shall perform the said obligations in compliance with the
standards, ethnical and otherwise, generally observed in the industry.
4. ISSUANCE OF SHARES
In consideration for the Services, BMT R&D shall as soon as practicable
after the date of this Agreement issue and allot 8,166,667 fully paid-up
shares of HK$1.00 each in BMT R&D, free from any encumbrances, to CUHK (or
as CUHK may otherwise direct which, without limitation, may include the
Chinese University of Hong Kong Foundation Limited) at no additional cost,
levy or charge, which shall be equivalent to 49% of the issued capital in
BMT R&D.
5. INSURANCE, FEES AND EXPENSES
5.1 Subject to CLAUSES 5.2 and 5.3, CUHK shall bear all fees and expenses
incurred by it in the performance of the Services as set out in Schedule A.
BMT R&D shall not reimburse CUHK for any fees or expenses incurred by CUHK.
5.2 BMT R&D shall arrange for and maintain, at its cost, insurance policies
(naming BMT R&D, CUHK and its shareholders as beneficiaries) covering
general liability and errors and omissions in respect of BMT R&D , its
employees, shareholders or contractors. Such insurance policies shall be on
terms as agreed between the parties.
Page 2 of 7
5.3 BMT R&D and CUHK agree that:
(a) any secondment of personnel by any party, for part-time employment,
consultancy or full-time employment, or any use of facilities or
premises shall be on terms (including payment terms) to be agreed by
BMT R&D and CUHK; and
(b) BMT R&D will pay CUHK or the relevant personnel of CUHK (in which case
the written consent of CUHK must be obtained by the personnel) on
terms to be agreed by the relevant parties for the following services:
(i) services of Xxxx. Xxxxx Xxxxx-Xxxx Xxx;
(ii) supply of personnel for the management of the day-to-day
operations of BMT R& D;
(iii) supply of personnel for other operations of BMT R&D;
(iv) supervision of data collection and management of trials;
(v) introduction of third party projects to be performed on a fee for
service basis;
(vi) provide office space for additional personnel hired by BMT R&D;
and
(vii) services relating to existing computer resources and information
technology equipment of the Centre for Clinical Trials of CUHK.
6. INTELLECTUAL PROPERTY RIGHTS AND ROYALTIES
6.1 BMT R&D shall be entitled to all brands, trade marks, service marks, logos,
inventions, property, copyright, designs, trade names, internet domain
names, patents and other intellectual property rights ("BMT IPR") which are
developed with resources provided by BMT R&D and BMT R&D shall be entitled
to all rights (including royalties and payments by third parties) in
relation thereto.
6.2 CUHK shall do all things and sign all documents or instruments reasonably
necessary to enable BMT R&D to obtain, defend and enforce its rights in the
BMT IPR. For the avoidance of doubt, to the extent that CUHK is the
beneficial owner of such BMT IPR, CUHK hereby, as beneficial owner, assigns
all such BMT IPR to BMT R&D and agrees to do all things and sign all
documents or instruments reasonably necessary to perfect such assignment.
6.3 The provisions of this CLAUSE 6 shall survive the termination of this
Agreement.
7. ASSIGNMENT
Either party shall not be entitled to assign any of its rights or
obligations under this Agreement or to sell, transfer or otherwise dispose
of the shares of BMT R&D without the prior written consent of the other
party and in accordance with the Shareholders' Agreement dated on or around
the date of this Agreement between the Chinese University of Hong Kong
Foundation Limited, Bridgetech Holdings International, Inc. and BMT R&D as
amended from time to time.
8. TERMINATION
8.1 (a) Without limiting the rights of the parties at law, either party shall
be entitled to terminate this Agreement with immediate effect (and
without any notice) if either party attempts to assign any of its
rights or obligations under this Agreement or to sell, transfer or
otherwise dispose of the shares of BMT R&D in breach of CLAUSE 7.
(b) Either party shall be entitled to terminate this Agreement after the
third anniversary of this Agreement by serving 3 months' notice in
writing to the other party.
Page 3 of 7
8.2 On the termination of this Agreement, all rights and obligations of the
parties under this Agreement shall automatically terminate except for such
rights of action as shall have accrued prior thereto and any obligations
which expressly or by implication are intended to come into or continue in
force on or after such termination. For the avoidance of doubt, the
shareholders of BMT R&D shall not be required to sell, transfer or
otherwise dispose of the shares of BMT R&D upon termination of this
Agreement.
9. GENERAL PROVISIONS
9.1 Any notices given under this Agreement will be in writing and delivered by
mail, by hand, or by facsimile addressed to the parties as follows:
CUHK BMT R&D
The Chinese University of Hong Kong Bridgetech Medical Technologies Research
& Development Limited
Xxxx 000, Xx Xx'xx Xxxxxxxx Xxxx 0000-00, 24/F Admiralty Centre II, 18 Harcourt
Shatin, Xxx Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxx Xxxx XXX
Xxxx Xxxx SAR
Attn: Xx Xxxxx Xxxx Attn: Xxxxxx X. Xxxx III
Director Director
Research and Technology
Administration Office
Telephone: (000) 0000 0000 Telephone: (000) 0000 0000
Facsimile: (000) 0000 0000 Facsimile: (000) 0000 0000
9.2 Any accommodation or indulgence or failure to enforce a right shall not be
construed as a waiver of the right of any party exercisable under this
Agreement unless a waiver shall be specifically stated in writing signed by
such party.
9.3 This Agreement constitutes the entire understanding between the parties
concerning the subject matter hereof. No amendments or changes shall be
made to this Agreement unless agreed to in writing by the parties. Each
provision of this Agreement shall be construed separately and
notwithstanding that the whole or any part of any such provision may prove
to be illegal or unenforceable the other provisions of this Agreement and
the remainder of the provision in question shall continue in full force and
effect.
9.4 Each party shall bear its own costs and expenses in connection with the
preparation, negotiation and execution of this Agreement.
9.5 This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong and the parties hereby irrevocably submit to the
non-exclusive jurisdiction of the Hong Kong courts.
Page 4 of 7
SCHEDULE A
SERVICES
CUHK shall:
(a) facilitate access to experts for the conducting of clinical trials, whether
within or outside of CUHK;
(b) facilitate access to necessary resources of CUHK for the conducting of
trials; and
(c) facilitate access to an extensive network of collaborators in China.
Page 5 of 7
SCHEDULE B
OBLIGATIONS
BMT R&D shall:
(a) ensure that the employees of BMT R&D shall co-operate fully with CUHK in
relation to the provision of the Services;
(b) promptly furnish CUHK with such information and documents as it may
reasonably request for the proper performance of its obligations hereunder;
(c) provide adequate funding to meet the estimated budget in Schedule C as
nearly as possible for project management and data management services for
multi-centre clinical trials;
(d) establish an office in Hong Kong to meet the requirements with respect to
staffing, equipment and office in Schedule C as nearly as possible;
(e) register BMT R&D in China;
(f) introduce trials to investigators of major clinical centres in Guangzhou,
Beijing, Shanghai and other locations in the Peoples Republic of China as
deemed necessary for regulatory approval;
(g) use reasonable endeavours to introduce trials to investigators of other
clinical centres in China; and
(h) for matters of a medical or an ethical nature, comply with the ethical
standard set forth by the Joint CUHK-NTEC Clinical Research Ethics
Committee as amended from time to time and obtain the approval of such
committee when necessary.
Page 6 of 7
SCHEDULE C
ESTIMATED OPERATION AND OFFICE RENTAL BUDGET FOR BMT R&D
YEAR 1 YEAR 2 YEAR 3 TOTAL
OPERATION COST (HK $) (HK $) (HK $) (HK $)
-------------- ---------- ---------- ---------- -----------
STAFF COST
Director 600,000 600,000 600,000 1,800,000
Administrative and Accounting 360,000 360,000 360,000 1,260,000
System Analyst 300,000 300,000 300,000 900,000
Database Programmer 300,000 300,000 300,000 900,000
Clinical Trials and Nursing Specialist 420,000 420,000 420,000 1,080,000
MSc Statistician 300,000 300,000 300,000 900,000
Data Entry Clerks 144,000 144,000 144,000 432,000
---------- ---------- ---------- -----------
SUB-TOTAL (HKD) 2,424,000 2,424,000 2,424,000 7,272,000
---------- ---------- ---------- -----------
EQUIPMENTS
Computer Servers 100,000 100,000
Central Storage System 200,000 200,000
Backup Server with Tape Auto Loader 100,000 100,000
Printer and copy machine 60,000 60,000
Network 25,000 25,000 25,000 75,000
Firewalls 100,000 100,000
Oracle tools and licenses 100,000 20,000 20,000 140,000
Annual licenses for Operating System and Statistics 50,000 50,000 50,000 150,000
Laboratory equipments and reagents 200,000 50,000 50,000 300,000
Fridge 80,000 80,000
Freezer 100,000 100,000
Equipments for potential centres in China 100,000 100,000 100,000 300,000
---------- ---------- ---------- -----------
SUB-TOTAL (HKD) 1,215,000 245,000 245,000 1,705,000
---------- ---------- ---------- -----------
TOTAL (NOT INCLUDING OFFICE RENTAL) 3,639,000 2,669,000 2,669,000 8,977,000
========== ========== ========== ===========
YEAR 1 YEAR 2 YEAR 3 TOTAL
OFFICE RENTAL (HK $) (HK $) (HK $) (HK $)
------------- ---------- ---------- ---------- -----------
4500 square feet office 783,000 783,000 783,000 2,349,000
Renovation 600,000 600,000
Maintenance 120,000 120,000 120,000 360,000
Insurance for human resources 120,000 120,000 120,000 360,000
---------- --------- ---------- -----------
SUB-TOTAL (HKD) 1,623,000 1,023,000 1,023,000 3,669,000
---------- ---------- ---------- -----------
TOTAL $5,262,000 $3,692,000 $3,692,000 $12,646,000
========== ========== ========== ===========
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