EXHIBIT 10.2
MEMORANDUM OF UNDERSTANDING
Korea Ginseng Corp.
Xxxxxx Sience
March 12, 2004
MEMORANDUM OF UNDERSTANDING
This memorandum of understanding is entered on March 12, 2004 by:
(1) (The "Acceptor") Korea Ginseng Corp., located at 000 Xxxxxx-xxxx,
Xxx-xx, Xxxxxxx Xxxx, Xxxxx
and
(2) (The "Proposer") Xxxxxx Science, located at 00-0 Xxxxxxxx-xxxx,
Xxxxxx-xx, Xxxxxxx Xxxx, Xxxxxxxx-xx, Xxxxx
ARTICLE 1. OBJECTIVE
In February and August of 2003, the Acceptor received proposals for a joint
enterprise from the Proposer, with the patent on "EuChol," a new material that
reduces cholesterols, regarding a development project of a new cholesterol
reducing product. The Acceptor reviewed the proposals and decides that the
project has a good potential. The objective of this memorandum is to define
basic terms between the Acceptor and the Proposer, prior to the main agreement
(the "Agreement") for development of a cholesterol reducing product based on
EuChol.
ARTICLE 2. DEFINITIONS
In this memorandum, "EuChol" is a cholesterol reducing material, which was
developed and patented by the Proposer. EuChol is "a new material based on
water-soluble vegetable sterol using nano technology" that is effective in
reducing cholesterol. (Patent number: 0292672, Application number: 1999-0007121,
Application date: March 3, 1999, Registration date: March 26, 2001)
ARTICLE 3. TERMS AND CONDITIONS OF JOINT ENTERPRISE
1.1 The Acceptor will develop a cholesterol reducing product based on
EuChol, provided by the Proposer, and pay the Proposer for such usage.
1.2 The Proposer will provide EuChol to the Acceptor exclusively in
Ginseng and Red Ginseng product market, and will not provide EuChol to
any other manufacturer or distributor of similar products.
1.3 The Proposer will provide the Acceptor with EuChol in the amount as
needed by the Acceptor, based on the annual sales target defined by
the Acceptor.
1.4 The Acceptor and the Proposer agree as the Article 4 regarding the
details, and will form the Agreement as set out in the Article 7,
based on these details.
1.5 After signing on this memorandum until the signing of the main
Agreement as specified in the Article 7, the Acceptor and the Proposer
will not sign any agreements with third parties regarding a contract
same as or similar to the development stated herein.
ARTICLE 4. THE DETAILS
1.1 The Acceptor will have the rights to market and distribute the ginseng
and red
ginseng products developed with EuChol. If necessary, the Acceptor may
convey part of the distribution including pharmacies to the Proposer.
1.2 The Proposer will provide any necessary assistance to the Acceptor for
the product development.
1.3 The Acceptor will have all intellectual property rights regarding the
brand and recipes of the resulting products (in clauses 4.1 and 4.2)
using EuChol.
1.4 The Proposer will ensure the safety and consistency regarding the
quality of EuChol, through exhaustive quality control, and will be
responsible for any possible problems related to EuChol's quality.
1.5 The Acceptor may request the Proposer of necessary changes or
improvement regarding the clause 4.4, with production management and
quality guarantee.
ARTICLE 5. RESOLUTION OF DISPUTES
Both parties will collaborate for the mutual benefits to resolve any conflicts
caused by different interpretations of the terms and conditions in this
memorandum, and will not allow any third party interventions.
ARTICLE 6. CONFIDENTIALITY
The Acceptor and the Proposer should not reveal any information obtained through
the joint development, or use such information for businesses outside of the
joint development, without the other party's permission. This applies after the
agreement is expired.
ARTICLE 7. THE MAIN AGREEMENT
On the basis of trust and mutual benefits, the Acceptor and the Proposer will do
the best to form the main Agreement as soon as possible. Regarding the
Agreement, the leading party will be the Acceptor's Koryo Ginseng Division.
ARTICLE 8. LEGAL EFFECT
This memorandum defines agreed terms between the Acceptor and the Proposer, and
does not have legally biding effect. However, in case of any losses resulted
from failures to comply with the confidentiality obligations in the Article 6,
the party at fault is responsible for any indemnity for such losses to the other
party.
Date: March 12, 2004
The Acceptor: Korea Ginseng Corp., CEO Jeong-ho Ahn (Signature)
The Proposer: Xxxxxx Science, CEO Xxxxx-xxxx Noh (Signature)
