Operating Agreement (English Version) This Exclusive Consulting and Services Agreement (the "Agreement") is entered into as of December 20, 2006, between the following two parties: PARTY A: Longdan International Inc. Legal Address: Renaissance Trust...
(English Version)
This Exclusive Consulting and Services Agreement (the "Agreement") is
entered into as of December 20, 2006, between the following two parties:
PARTY A: Longdan International Inc.
Legal Address: Renaissance Trust Ltd, Solomon Building, P. O. Xxx 000,
Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx.
PARTY B: Hubei Longdan Biological Medicine Technology Co. Ltd.
Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road,
Wuchang District, Wuhan, Hubei, China, 430070
PARTY C: Xxxxxx Xxxxx, Chairman and an authorized person to represent
shareholders of Party B, who collectively own more than 50% of the
outstanding equity interests in Party B.
Legal Address: No.1, 2nd Floor, 308 Xxxx Xxx Road, Hanyang, Wuhan,
Hubei China.
WHEREAS, Party A is a business company incorporated under the laws of
Nevis;
WHEREAS, Party B is a company with exclusively domestic capital
registered in the People's Republic of China, and is engaged in the
business of Chinese medicine development, manufacturing, sale, and
pharmacy management distribution network ("Business");
WHEREAS, Party A has established a business relationship with Party B
by entering into an Exclusive Consulting and Services Agreement dated
as of the same date hereof ("Consulting Agreement");
WHEREAS, Pursuant to the above-mentioned Exclusive Consulting and
Services Agreement, Party B shall pay certain consulting and services
fees to Party A; and Party B's daily operations will have a material
effect on its ability to pay the fees due to Party A;
WHEREAS, While Party A desires to be the provider of operating agreement to
Party B and Part C, Party B and Part C hereby agree to accept operating agreement;
NOW THEREFORE, Party A, Part B and Part C through negotiations hereby agree
as follows through mutual negotiations:
1. Guaranteeing and Pledging
1.1 Party A agrees, during the term of this agreement, subject to
the satisfaction of the relevant provisions by Party B herein, to
provide full guarantee the performance of Party B in the contracts,
agreements or transactions in connection with Party B's operation
between Party B and any other third party. As further consideration for
Part A's guarantee of Part B's obligation hereunder, Party B agrees, as
the counter-guarantee, to pledge the account receivable and the assets
of company to Party A. Upon Part A's request, Part B will execute its
further pledge to Part A at any time and from time to time. According
to the aforesaid guarantee arrangement, Party A wishes to enter into
written guarantee contracts with Party B's counter-parties thereof to
assume the guarantee liability as the guarantor when it needs;
therefore, Party B shall take all necessary actions to carry out the
arrangement of counter-guarantee to Party A.
1.2 Party B readily accepts and confirms that if Party B demands
any guarantee for the operation of any contract, loan or other
financing transactions, Party B shall first pursue a guarantee from
Party A. In such case, Party A shall have the right but not the
obligation to provide the appropriate guarantee to Party B at its
individual discretion. If Party A decides not to grant such guarantee,
Party A shall release a written notice to Party B, then Party B may
consider to seek a guarantee from other third party.
2. Consent
In consideration of the requirement of Article 1 herein and
assuring the performance of the Consulting Agreement and this Agreement
among Party A, Party B and Part C, Party B agrees that except Party B's
regular operation for the business contracts, agreements, sell or
purchase assets, and the lien obtained by relevant counter parties due
to such agreements, Party B shall not conduct any transaction which may
materially affects its assets, obligations, rights or the company's
operation unless the obtainment of a prior written consent from Party
A. These transactions shall include, but not limit to the following
contents:
2.1 To assume any debt or borrow money from any third party;
2.2 To sell to or acquire from any third party any assets or
rights, including but not limited to, any plant, equipment, and any
intellectual property right;
2.3 To provide any guarantee for any third party with its assets
or intellectual property rights;
2.4 To assign to any third party any agreement related to its
Business;
2.5 To engage in any consulting agreement with any third party or
to engage in any other business activities other than the Business;
2.6 To pledge any assets or intellectual property rights to any
third party as security interests.
3. Party B agrees to accept, from time to time, the corporate
policy advise and guidance provided by Party A in connection with
company's daily operating and financial management and the employee
management.
4. Directors and Senior Managers of Part B
Part B and Part C agree that the Shareholders of Party B shall
Appoint, or approve the personnel recommended by Party A as the directors
of Party B, and Party B shall appoint Party A's senior managers as Party B's President, Chief Financial Officer, and other senior officers. Any replacement of the senior managers of Part B will be recommended by Part A. The person
or persons recommended by Party A should comply with the requirements
on the qualifications of directors, President, Chief Financial Officer,
and other senior officers pursuant to appropriate law.
5. This agreement shall be governed by, and construed in
accordance with the laws of the People's Republic of China.
6. Effective Date And Term
This Agreement shall come into effect as of the date first present
above. The term of this Agreement is ten (10) years, and shall be
automatically renewed for additional ten (10) year period upon the
initial expiration of the initial term hereof or any renewal term,
except earlier termination happens any time as set forth in Article 7
of this Agreement
7. Termination
During the initial or any renewal term of this Agreement, Party B
shall not elect to terminate this Agreement. Notwithstanding the above
stipulation, Party A shall have the right to terminate this Agreement
with or without any reason at any time by definitely giving Party B a
written notice thirty days prior to the termination.
8. Language
This Agreement is written in both Chinese and English, and
executed in English only, and the executed English language Agreement
shall prevail in all cases. This Agreement is executed in two originals
and each Party holds one original. Each original has the same legal
effect.
9. Settlement of Dispute
The parties shall strive to settle any dispute arising from, out
of or in connection with the interpretation or performance of this
Agreement through friendly negotiation. In case no settlement can be
reached through negotiation within six months, each party can submit
such matter to China International Economic and Trade Arbitration
Commission (the "CIETAC"). The arbitration shall follow the current
rules of CIETAC. The arbitration award shall be final and binding upon
the parties and shall be enforceable in accordance with its terms.
10. Amendments and Supplementary Agreements
Parties may negotiate and enter any amendments of this Agreement,
or supplementary agreements on matters not agreed upon herein. Any
amendments of this Agreement, or supplementary agreements shall be
valid only when made in writing and signed by both parties. Any
amendments of this Agreement, or supplementary contracts have equal
effect as this Agreement.
11. Without the prior written approval of Party A, Party B shall
not assign this Agreement, in part or in whole, to any third party.
12. Capable of Severing
Any of the provisions of this Agreement will be deemed as capable
of severing in the jurisdiction where it conflicts with the laws in
such jurisdiction. The invalid or unenforceable effect of such
provision in one jurisdiction should not be affected that in other
jurisdictions.
(A Signature Page Follows)
Signature Page
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed on their behalf by a duly authorized representative
as of the date first written above.
Party A: Longdan International Inc.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Party B: Hubei Longdan Biological Medicine Technology Co. Ltd.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Part C: Shareholders of Part B
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
An authorized representative of the majority shareholders
(An Appendix Page Follows)
Appendix: Form of Agreement Letter for Operating Agreement
Agreement Letter for Operating Agreement
( English Version, for Reference only )
To:
Hubei Longdan Biological Medicine Technology Co. Ltd. and Longdan
International Inc.
I, as the shareholder of Hubei Longdan Biological Medicine
Technology Co. Ltd., hereby agree and confirm as follows:
I have read the full text of Operating Agreement, and I fully
agree to all contents of this agreement.
I assign Xxxxxx Xxxxx, Chairman of Hubei Longdan Biological
Medicine Technology Co. Ltd. to represent me with the Common stock
shares specified at the bottom of this agreement, together with Hubei
Longdan Biological Medicine Technology Co. Ltd. to sign the Operating
Agreement with Longdan International Inc.
I agree to sign or provide necessary documents to perform the
Signature:
Print Name:
Identity Card Number:
Information of Possession of Common Stocks of Hubei Longdan Biological
Medicine Technology Co. Ltd. :
Class of Common Stocks: Number of Shares:
Percentage of Voting Power:
Date: December 20, 2006
