Cooperation Agreement
EXHIBIT 10.6
This
Agreement (this “Agreement”) is made and entered into by and between the
following Parties on January 15, 2008 in Beijing, the People's Republic of
China
(“China” or the “PRC”).
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Party
A:
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Inner
Mongolia Yongye Biotechnology Co. Ltd.
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Address:
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Yongye
Industrial Park, Jinshan Ave, Jinshan Development District, Huhehaote
City
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Party
B:
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Inner
Mongolia Yongye Nongfeng Biotechnology Co. Ltd.
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|
Address:
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Yongye
Industrial Park, Jinshan Ave, Jinshan Development District, Huhehaote
City
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Each
of
Party A and Party B shall be hereinafter referred to as a "Party" respectively,
and as the "Parties" collectively.
Whereas,
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1)
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Party
A is a limited liability company established in China, and has
the ability
to produce “ShengMingSu” and related products (the “Products”);
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2)
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Party
B is a sino-foreign cooperative joint venture established in China,
engaging in the promotion and sale of the Products (the “Business”)
as approved by the relevant governmental authorities in
China;
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3)
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Party
B is the holder of the patent, technique and trademarks (the “Intellectual
Property Rights”)
as set forth in Exhibit 1, and wishes to authorize Party A to use
Intellectual Property Rights to produce Products; Party A also
wishes to
accept Party B’s authorization to produce
Products.
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4)
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Party
A is willing to provide Party B with Products during the term of
this
Agreement, and Party B is willing to accept the above services
provided by
Party A on the terms set forth
herein.
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Now,
therefore, through mutual discussion, the Parties have reached the following
agreements:
Authorization
of license:
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.1
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Party
B is willing to authorize Party A an internal use, non-exclusive,
non-assignable and non-sublicense license in China to capitalize
on the
Intellectual Property Rights to produce the Products.
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.2
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Party
A agrees not to sell, lease or disclose the Intellectual Property
Rights
or any related documents and materials to any third
party.
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.3
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Party
A agrees not to decompile, disassemble or reverse-engineer the
Intellectual Property Rights, or develop derivative works of the
Intellectual Property Rights.
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.4
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Party
A confirms and agrees that all rights, ownership and interests
of the
Intellectual Property Rights, including but not limited to documents
and
materials, data and information (Products) and all copies or all
copies of
their any parts belong to and shall belong to Party B or related
third
parties. Party A is not entitled to and shall not try to obtain
rights,
ownership and interests of the Intellectual Property Rights, except
expressly prescribed in this Agreement. Party A confirms and agrees
that
Intellectual Property Rights include commercial secrets, property
information and confidential information, and Party A shall not
sell,
copy, amend, alter, modify and transfer the Intellectual Property
Rights,
except expressly permitted in this
Agreement.
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.5
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Execution
and any terms of this Agreement can not be interpreted as restricting
Party B to permit any third party to use the Intellectual Property
Rights
for producing Products.
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General
Arrangement
In
accordance with terms and conditions of this Agreement, Party B hereby entrusts
Party A to provide Party B with Products (the “Service”)
in
China during the term of this Agreement. The specific service includes those
services described in the Party B’s business scope and required by Party B from
time to time, including but not limited to the following:
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.1
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Party
A shall complete the production and delivery of the Products according
to
Party B’s instructions from time to time, and the Products shall meet the
standards set forth in Exhibit 2.
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.2
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During
the term of this Agreement, all the Products produced by Party
A according
to this Agreement, under Party B’s sole discretion, shall be exclusively
sold to the Party B or any third party appointed by Party B. Party
A shall
not sell any Product to any third party without prior written consent
of
Party B. However, Party A agrees that Party B can reach any supply
and
demand arrangement with any third party at any moment and shall
not be
restricted by articles of this Agreement during the term of this
Agreement.
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.3
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Party
A and Party B shall jointly build product quality-supervision systems
so
as to make the Products meet Party B’s
needs.
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.4
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Party
B will supervise cost expenses in connection with raw material
procurement
and Product production process incurred by Party A, and Party A
agrees to
adjust raw material procurement and Product production policy according
to
suggestions proposed by the Party B from time to time so as to
decrease
cost of procurement and production.
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.5
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Party
A shall assist Party B in sale, promotion and after-sale services
of the
Products as required by Party B from time to
time.
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.6
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Upon
request by Party A, Party B can provide Party A with technique
materials
and technique requirements needed by Party A in connection with
supply of
Products to Party B, and train Party A’s
employees.
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.7
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Due
to business requirement, Party B is entitled to use all of Party
A’s
facilities, workplaces and equipment, and such use shall not unreasonably
rejected by Party A. Fees and expenses arising out of such use
shall be
determined in Exhibit 4 of this
Agreement.
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Product
Supply Flow
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.1
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Party
B shall provide Party A with a name list of its employees who have
rights
to give orders to Party A (the “Eligible
Employee”),
and only those Eligible Employees are entitled to execute and give
out
orders.
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.2
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Form
of the supply order shall be determined by Party B. For details,
please
refer to Exhibit 3.
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.3
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Each
time after delivery of an order, Party A shall confirm the order
in
writing within three working days after delivery and organize the
production of the Products at the same time.
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.4
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Party
A shall finish production of the Product within 20 working days
after the
confirmation date of the order (if another date is agreed by the
Parties,
then shall refer to such agreed
date).
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Raw
Material and Packaging
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.1
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All
raw material needed by Party A for the supply of the Product shall
have
prior written confirmation or approval from Party B, unless agreed
by the
Parties otherwise.
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.2
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The
packaging, trademarks and anti-counterfeit labels of the Product
provided
by Party A shall be confirmed and approved by Party B in
writing.
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Ownership
and Delivery of Products
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.1
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After
production, Party A shall check the amount of the Products and
deliver
them to Party B at its production base. The Parties shall confirm
in
writing. Party B will examine the Products delivered by Party A
according
to the agreed standards. If any defect is found, Party B can reject
to
accept the Products. If any defect is identified after acceptance,
of the
delivered Products, Party B shall inform Party A such defect. Following
receipt of notice, Party A shall confirm and replace or dispose
of the
Products within agreed period of
time.
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.2
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Party
B is responsible for transportation of all Products under this
Agreement
and bears the transportation fee and insurance
fee.
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.3
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Ownership
and risks of damage and loss of the Products shall be transferred
to Party
B at the time of delivery.
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Special
Commitment of Party A
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.1
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Party
A shall guarantee that any supplied Products shall not infringe
intellectual property rights or any other rights and interests
of any
other parties. Otherwise, Party A shall indemnify Party B all relevant
losses.
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.2
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Without
permit of Party B, Party A shall not use technique materials provided
by
Party B to manufacture reserve or sell Products beyond Party B’s orders,
and shall not reserve samples of Products and related technique
materials
either.
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Subsequent
Arrangements
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.1
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The
existence of this Agreement and any term thereof shall not be interpreted
to restrict Party B’s ability to improve its production, to build its
manufacture facilities, lines and equipment so as to achieve
self-production and sale of Products in 2008.
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.2
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Within
two years after execution of this Agreement, Party A grants Party
B an
exclusive option to acquire all resources needed in connection
with
production of Products owned by Party A at a minimum purchase price
permitted by Chinese government or a book price, including but
not limited
to equipment, manufacture lines, facilities and land use right,
and Party
A shall assist Party B in such transfer.
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Service
Fee and Payment
The
Parties agree that the fees for the Services provided by Party A under this
Agreement shall be comprised of amounts as set forth in Exhibit 4 attached
herein, and no other fees shall be charged.
Intellectual
Property Rights and Confidentiality Clauses
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.1
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Party
B shall have exclusive and proprietary rights and interests in
all rights,
ownership, interests and intellectual properties arising out of
or created
during the process of Service supply, including but not limited
to
copyrights, patents, patent applications, software, technical secrets,
trade secrets and others.
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.2
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The
Parties acknowledge that the existence of this Agreement, technical
materials provided by Party B and any oral or written information
exchanged between the Parties in connection with the preparation
and
performance this Agreement are regarded as confidential information.
Each
Party shall maintain confidentiality of all such confidential information,
and without obtaining the written consent of the other Party, it
shall not
disclose any relevant confidential information to any third parties,
except for the information that: (a) is or will be in the public
domain
(other than through the receiving Party’s unauthorized disclosure); (b) is
under the obligation to be disclosed pursuant to the applicable
laws or
regulations, rules of any stock exchange, or orders of the court
or other
government authorities; or (c) is required to be disclosed by any
Party to
its shareholders, investors, legal counsels or financial advisors
regarding the transaction contemplated hereunder, provided that
such
shareholders, investors, legal counsels or financial advisors shall
be
bound by the confidentiality obligations similar to those set forth
in
this Section. Disclosure of any confidential information by the
staff
members or agencies hired by any Party shall be deemed disclosure
of such
confidential information by such Party, which Party shall be held
liable
for breach of this Agreement. This Section shall survive the termination
of this Agreement for any reason.
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.3
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The
Parties agree that this Section shall survive changes to, and rescission
or termination of, this Agreement.
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Representations
and Warranties
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.1
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Party
A hereby represents and warrants as
follows:
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.1.1
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Party
A is a company legally registered and validly existing in accordance
with
the laws of China.
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.1.2
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Party
A's execution and performance of this Agreement is within its corporate
capacity and the scope of its business operations; Party A has
taken
necessary corporate actions and given appropriate authorization
and has
obtained the consent and approval from third parties and government
agencies, and will not violate any restrictions in law or otherwise
binding or having an impact on Party
A.
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.1.3
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This
Agreement constitutes Party A's legal, valid and binding obligations,
enforceable in accordance with its
terms.
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.2
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Party
B hereby represents and warrants as follows:
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.2.1
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Party
B is a company legally registered and validly existing in accordance
with
the laws of China and has obtained approval from relevant Chinese
governing departments for engaging in its
service.
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.2.2
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Party
B's execution and performance of this Agreement is within its corporate
capacity and the scope of its business operations; Party B has
taken
necessary corporate actions and given appropriate authorization
and has
obtained the consent and approval from third parties and government
agencies, and will not violate any restrictions in law or otherwise
binding or having an impact on Party
B.
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.2.3
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This
Agreement constitutes Party B's legal, valid and binding obligations,
and
shall be enforceable against it.
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Effectiveness
and Term
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.1
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This
Agreement is executed on the date first above written and shall
take
effect as of such date. Unless earlier terminated in accordance
with the
provisions of this Agreement or relevant agreements separately
executed
between the Parties, the term of this Agreement shall be 5 years.
After
execution of this Agreement, both Parties shall review this Agreement
in
accordance with this Section every 3 months to determine whether
to amend
or supplement the provisions in this Agreement based on the actual
circumstances at that time.
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.2
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The
term of this Agreement may be extended if confirmed in writing
by the
Parties prior to the expiration thereof. The extended term shall
be
determined by the Parties through
negotiation.
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Termination
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.1
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Unless
renewed in accordance with the relevant terms of this Agreement,
this
Agreement shall be terminated upon the date of expiration
hereof.
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.2
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During
the term of this Agreement, unless Party B commits gross negligence,
or a
fraudulent act, against Party A, Party A shall not terminate this
Agreement prior to its expiration
date.
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.3
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If
Party B has built or purchased from Party A the manufacture facilities,
lines and equipment or no longer needs Service from Party A due
to any
other reason, Party B can terminate this Agreement by prior written
notification to Party, but all issued orders shall still be completed
and
respective fees shall be paid as
well.
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.4
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The
rights and obligations of the Parties under Sections of confidentiality
and dispute resolution shall survive the termination of this
Agreement.
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Governing
Law and Resolution of Disputes
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.1
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The
execution, effectiveness, construction, performance, amendment
and
termination of this Agreement and the resolution of disputes hereunder
shall be governed by the laws of China.
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.2
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In
the event of any dispute with respect to the construction and performance
of this Agreement, the Parties shall first resolve the dispute
through
friendly negotiations. In the event the Parties fail to reach an
agreement
on the dispute within 30 days after either Party's request to the
other
Parties for resolution of the dispute through negotiations, either
Party
may submit the relevant dispute to the China International Economic
and
Trade Arbitration Commission for arbitration, in accordance with
its
Arbitration Rules. The arbitration shall be conducted in Beijing,
and the
language used in arbitration shall be Chinese. The arbitration
award shall
be final and binding on all
Parties.
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.3
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Upon
the occurrence of any disputes arising from the construction and
performance of this Agreement or during the pending arbitration
of any
dispute, except for the matters under dispute, the Parties to this
Agreement shall continue to exercise their respective rights under
this
Agreement and perform their respective obligations under this
Agreement.
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Notices
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.1
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All
notices and other communications required or permitted to be given
pursuant to this Agreement shall be delivered personally or sent
by
registered mail, postage prepaid, by a commercial courier service
or by
facsimile transmission to the address of such Party set forth below.
A
confirmation copy of each notice shall also be sent by email. The
dates on
which notices shall be deemed to have been effectively given shall
be
determined as follows:
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.1.1
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Notices
given by personal delivery, by courier service or by registered
mail,
postage prepaid, shall be deemed effectively given on the date
of delivery
or refusal at the address specified for
notices
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.1.2
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Notices
given by facsimile transmission shall be deemed effectively given
on the
date of successful transmission (as evidenced by an automatically
generated confirmation of
transmission).
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.2
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For
the purpose of notices, the addresses of the Parties are as
follows:
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Party
A:
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Inner
Mongolia Yongye Biotechnology Co. Ltd.
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Address:
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Yongye
Industrial Park, Jinshan Road, Jinshan
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Development
District, Huhehaote City
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Attn:
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Yin
Aihui
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Phone:
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00-0000-0000000
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Facsimile:
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00-0000-0000000
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Party
B:
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Inner
Mongolia Yongye Nongfeng Biotechnology Co.
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Ltd.
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Address:
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Yongye
Industrial Park, Jinshan Road, Jinshan
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Development
District, Huhehaote City
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Attn:
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Wu
Zishen
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Phone:
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00-0000-0000000
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Facsimile:
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00-0000-0000000
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.3
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Any
Party may at any time change its address for notices by a notice
delivered
to the other Party in accordance with the terms
hereof.
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Assignment
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.1
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Without
Party B's prior written consent, Party A shall not assign its rights
and
obligations under this Agreement to any third
party.
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.2
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Party
A agrees that Party B may assign its obligations and rights under
this
Agreement to any third party upon a prior written notice to Party
A but
without the consent of Party A.
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Severability
In
the
event that one or several of the provisions of this Agreement are found to
be
invalid, illegal or unenforceable in any aspect in accordance with any laws
or
regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any
aspect.
The Parties shall strive in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the
economic effect of such effective provisions shall be as close as possible
to
the economic effect of those invalid, illegal or unenforceable
provisions.
Amendments
and Supplements
Any
amendments and supplements to this Agreement shall be in writing. The amendment
agreements and supplementary agreements that have been signed by the Parties
and
that relate to this Agreement shall be an integral part of this Agreement
and
shall have the same legal validity as this Agreement.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the Parties have caused their authorized representatives
to
execute this Cooperation Agreement as of the date first above
written.
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Party
A:
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Inner
Mongolia Yongye Biotechnology Co. Ltd.
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By:
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Sealed
by Inner Mongolia Yongye Biotechnology Co. Ltd.
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Party
B:
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Inner
Mongolia Yongye Nongfeng Biotechnology Co. Ltd.
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By:
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Sealed
by Inner Mongolia Yongye Nongfeng Biotechnology Co.
Ltd.
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Exhibit
1 List of Intellectual Property Rights
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Class
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Name
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Application
Number
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Applying
Date
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Remark
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Patent
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One
nutrient for animals and its processing methods
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200510118240.2
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November
11, 2005
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Patent
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One
nutrient for plants and its processing methods
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2006101319537
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July
6, 2007
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Trademark
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Registration
Certificate
for “Yongye” trade xxxx, type I
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4128935
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October
7, 2007
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Technique
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The
processings of ”ShengMingSu” for plants and animals
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refer
to the following charts
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Exhibit
2 Product Standard
ShengMingSu
for Plants
Standards
for the examination of product
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1.
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Appearance:
xxxxx liquid
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2.
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ShengMingSu
should conform the requirements in Form
1
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Form
1
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Item
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Index
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Content
of water-soluble humic acid, g/L ≥
Content
of total nutrient øN+P2O5+K2O÷,g/L ≥
Total
primary amount (calculated by element) of microelement (Fe,Mn,CCU,Mo,B,Zn
and so on), , g/L ≥
Insoluable
matter, g/L
≤
pH(diluted
at 1:250)
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50
200
10
50
4-9
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Harmful
element
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As
øcalculated
by element÷,
mg/kg ≤
Pb
øcalculated
by element÷,
mg/kg ≤
Cd
øcalculated
by element÷,
mg/kg ≤
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10
50
10
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Note:
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1.
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The
single element content of the mass nutrient should be no less than
40g/L
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2.
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.At
least 2 kinds of microelement should be included in the product.
Except
Mo, the single nutrient content of the other 5 microelements should
be no
less than 0.1%.
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ShengMingSu
for Animal
Standard
for the examination of products
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1.
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Appearance:
grey particle and powder
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2.
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ShengMingSu
should conform the requirements in Form 2
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Form
2
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Item
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First
class
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Second
class
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Third
class
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The
content of Humic acid (calculate by butt) ,% ≥
Moisture
content ,% ≤
Granularity
(CTR of the sieve of 2.00mm Standard),% ≥
Water-insoluble
(calculate by butt) , % ≤
pH
≤
Heavy
metal (calculate by lead) mg/Kg ≤
Arsenic
mg/Kg ≤
Fluorin
mg/Kg ≤
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60
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50
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40
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10
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10
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13
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95
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|||
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5
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10
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20
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7
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7
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7
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30
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30
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30
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10
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10
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10
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80
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80
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80
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Exhibit
3 Form of Order
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Manufacture
Order
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Client
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Tel.
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Address
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Producer
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Tel.
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Address
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Name
of Product
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Quantity
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Delivery
Date
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Mode
of Payment
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Method
of Delivery
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Remark
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Total:
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|||||
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Business
Contact:
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Confirmation
of Logistics
|
||||
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General
Manager (seal):
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|||||
Exhibit
4 Breakdown of Fees
|
Cost
Price of ShengMingSu for Plants: 350元/件
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Cost
Price of ShengMingSu for Animals: 120元/件
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Raw
material and supplemental material fee
|
XXX
000 per piece
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RMB
90 per piece
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Manufacturing,
overhead fee
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XXX
000 per piece
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RMB
18 per piece
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Non-predictable
fee
|
XXX
00 per piece
|
RMB
12 per piece
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2008-2009
Fees
in connection with Party A’s facilities & workplaces occupied by Party
B: XXX 0 per M2
per day, no fee charged for equipment
use
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