Technology Transfer Agreement
[English translation of Mandarin original.]
Project Name: AF-01 Anti-viral Aerosol (Veterinary)
Transferee: Kiwa Bio-Tech Products Group Corporation (Party A)
Transferor: Jinan Kelongboao Bio-Tech Co., Ltd. (Party B)
Place of contract signing: BEIJING CHINA
Date of contract signing: , 2006
Effective Term: From May 6, 2006 To May 6, 2008
Technology Transfer Contract
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In accordance with the Contract Law of the People's Republic of China,
this Technology Transfer Agreement (the Agreement) is made and entered into, on
the technology transfer and relating technical service for the AF-01 Anti-viral
Aerosol (Veterinary) (temporary name, same as hereafter) Project, by and between
the parties hereto as follows:
I. Subject of transfer
1-1 Party B agrees to transfer the veterinary AF-01technological
achievement under the Appraisal Certificate No. Xxx Xxx Ke Xxxxx Xxxx Zi [2004]
A0101 (Attachment A) to Party A and Party A agrees to accept such technological
achievement. The veterinary AF-01technological achievement is a Virus Blocker
with broad-spectrum antivirus function independently developed by Party B who
owns the intellectual property rights on this product with bio-active
glycopeptides produced by actinomycetes as the element.
1-2 Both parties fully understand that the technological achievement
appraisal for veterinary AF-01 and the technology transfer as provided herein
are limited to the production and sales of AF-01 anti-viral Aerosol veterinary
medicine agent only, not concerned with the providing of bacterium seeds for
production of AF-01 Virus Blocker, the raw material medicine production and the
application of AF-01 Virus Blocker as a new human medicine; meanwhile the
veterinary product development, application for registration, production and
sales of Party A shall not be limited by the agent type, indications and scope
of application and territory, and shall be determined at its own discretion by
Party A.
II. Technology and service contents and the requirements:
2-1. Technology content:
The technology related to produce the veterinary AF-01 Anti-viral Aerosol
agent, and the right to produce the new medicine.
2-2. Technical service and the requirements:
2-2-1 AF-01 Anti-viral Aerosol veterinary medicine agent production,
quality inspection and storage technology, including the technical parameters of
above technology, product quality standard (draft) technical index and technical
training;
2-2-2 As for the exclusive manufacturer for AF-01 Anti-viral Aerosol
veterinary medicine agent, Party B shall guarantee that such technology has
reached the degree for large scale industrialized production, and shall
guarantee the advancement and maturity of the manufacturing processes, and the
stability of such product can meet the requirements of the quality standards.
Party B shall be responsible for giving guidance to Party A or the designated
factories for producing the acceptable products.
2-2-3 Party B shall be responsible for providing the raw material medicine
for such product, the certificate for legality of the source of raw material
medicine and the quality standards.
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2-2-4 Party A shall be allowed, in the name of Party A or its subsidiary,
to independently apply for the certificate for new veterinary medicine with the
competent authority of Chinese government. The indications and scope of
application shall be determined at its own discretion by Party A based on the
medicine effect characteristics. Therefore, Party B shall provide acceptable
samples and relating technical documents, and assist Party A in applying for the
production license, the legal inspection and verification.
III. Target technical index and parameters
The technical index and parameters shall conform to the current measures
for veterinary medicine registration and the relating regulations, and
corresponding documents shall be prepared and submitted in hard copy and in
electronic copy.
IV. Scope of technical secret and term of confidentiality for this project:
The scope of production technology secret of this project shall be within
Party A and Party B (including the technology-related entities and state
authority for approval). Both parties shall keep confidential the technical
information of this project. In the event that without Party A's consent Party B
discloses the technical information, Party B shall indemnify Party A at 50-100%
of the total contract value. Both parties shall keep confidential the technology
and the confidentiality period shall be seven years.
Scope of using the technical secret(pound)(0)
The technical secret can be used within Party A, its wholly-funded or
partially funded companies.
V. The Technology Transfer Contract and Acceptance criteria and methods:
Acceptance criteria:
The acceptance criteria for this project shall be the contents of Clause
1.2 hereof.
Methods and schedule
5-1. Within 30 days after Party A pays the first installment to Party B,
Party B shall complete the delivery of related technical documents.
5-2. After the contract be signed between Party A and Party B, Party B
shall provide the sample (=5000 milliliter) for new veterinary medicine
application to Party A in accordance with the requests of Party A, the original
sample liquid shall be not less than 200,000 zymolysis units/milliliter.
5-3. Within ten days after the Contract becomes effective, Party B shall
deliver to Party A the documents related to agent production technology, quality
control technology and product storage technology. Meanwhile Party B should
assist Party A in making preparations for the application documents and sample
validation.
5-4. Within 90 days after this Contract becomes effective, Party A shall
make available the inspection equipment and the inspection personnel, and timely
notify Party B to start the training on relating personnel. Upon ending of the
training, the parties shall sign the memo for completing the training.
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5-5. After the conditions of Party A are complete, Party A give a timely
notice to Party B for trial operation. Within ten working days after Party B
receives the notice from Party A, Party B shall send technicians to the facility
designated by Party A and complete the trial production together with the
relating personnel of Party A. Party B shall be responsible for giving on-site
guidance to Party A for production of 3 batches of acceptable agent products and
complete the handover of all the manufacturing processes. Successful trail
production shall be deemed as Party A has accepted the manufacturing processes
and production technology transferred by Party B. Both parties shall sign the
acceptance document.
5-6. Within 60 days after the production approval for new medicine is
acquired, Party A shall start the agent production.
VI. Transfer fee and way of payment or account settlement
6-1 Total transfer fee (say): Renminbi ten million Yuan, of which six
million shall be paid in cash and four million shall be paid by Party A with its
stocks.
6-2 Way of payment:
The above transfer fee shall be paid by installment as follows:
6-2-1. Within 15 days after the Contract is signed, pay Renminbi three
million Yuan;
6-2-2. Before technical training, pay Renminbi one million Yuan;
6-2-3. Within ten working days after the application for new medicine is
accepted by the Ministry of Agriculture, pay to Party B Renminbi one million
Yuan;
6-2-4. Within ten working days after the certificate for new medicine is
acquired from the Ministry of Agriculture, pay to Party B Renminbi one million
Yuan;
6-2-5. Party A shall, within 90 days after the production approval is
acquired and the trial operation is ended, complete all the formalities for
transferring or issuing Renminbi four million Yuan stock to Party B. Party A's
stock price shall be calculated at average market price of stock of the five
days before the date of payment, and the conversion rate between Renminbi and
American dollar shall be the exchange rate of the date on which the stock
transfer formality is settled.
VII. General terms and conditions:
In event of breach of contract, the defaulting party shall bear the
responsibilities and liabilities fro breach of contract in accordance with the
Contract Law of the People's Republic of China.
7-1 It is agreed:
7-1-1. In the event that for the reason of Party B's technology, the
production approval of this product cannot be acquired, then Party B
shall refund to Party A all the technological transfer fee already
paid;
7-1-2. In the event that for Party A's reason Party A fails to perform
this Contract or terminate this Contract in advance, Party B shall
have the right to transfer this project to any other party and not
to refund the transfer fee paid by Party A;
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7-1-3. In the event that Party B fails to perform this Contract or
terminate this Contract in advance, all the technical documents for
the veterinary AF-01 Anti-viral Aerosol Party A has acquired and the
production approval which may be acquired in future shall solely
belong to Party A, and Party A shall have the right to dispose them
at its own discretion;
7-1-4. Party A shall be the exclusive transferee in Chinese territory for
the such agent of Party B. In the event that for Party B's reason
Party B discloses the technical secret, Party B shall be responsible
for all losses so suffered by Party A;
7-1-5. All the property rights on the subject matter of this project, the
relating documents and technology, and the certificate for new
medicine to be acquired in future shall be solely belong to Party A.
7-2. Special terms and conditions:
7-2-1. Party B shall exclusively supply the raw material medicine for
AF-01 Anti-viral Aerosol to Party A for a long time. The raw
material medicine shall reach the index of 200,000 zymolysis
units/milliliter. After this Contract is signed, both parties shall
sign the long-term supply contract in a timely manner.
7-2-2. After the raw material medicine purchased by Party A from Party B
reaches one ton per month for six consecutive months, Party B shall
stop the production and sales activities of any kind for the
veterinary agent related to such technology, and hand over the
customers to Party A free of charge.
7-2-3. In the event that after the Contract is signed, Party A fails to
develop this product or sell the veterinary medicine commodity
within two years, Party B shall have the right to develop such
product and the development achievements shall remain with Party B.
7-2-4. After Party A acquires the certificate for new medicine for the
AF-01 Anti-viral Aerosol, the extension and changes to the
production approval shall have nothing to do with Party B.
7-2-5. In the event that Party A has the desire to transfer the production
approval or give consent to a third party to produce the medicine,
the written consent of Party B shall be acquired, and the exclusive
supply contract shall be accordingly modified.
7-2-6. After the AF-01 Antiviral Aerosol Agent is issued with the
production approval and is put into production; Party B continues to
assist Party A in completing the application for registration as an
anti bird-flu new veterinary medicine.
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VIII. Provision and sharing of follow-up improvements:
8-1. Party B shall allow Party A to carry out follow-up development of the
veterinary AF-01 Anti-viral Aerosol and shall not otherwise reserve other rights
thereon. The follow-up development as used herein shall mean the improvement of
the manufacturing processes, increase of indications and extension of
application scope.
8-2. In the event Party A needs the assistance from Party B during the
aforesaid follow-up development, Party B shall give necessary assistance. The
cooperation contents and conditions shall be agreed upon by the parties
otherwise.
8-3. Party B shall allow Party A to apply for patent protection for the
technology transferred to Party A and the achievements of follow-up development
as provided herein or take other effective protective legal means.
8-4. Nothing herein may be construed as that the contents transferred by
Party B to Party A include the bacterium seeds for production of AF-01
Anti-viral Aerosol, the technologies related to the raw material medicine
production and the right to apply AF-01 Anti-viral Aerosol as a new human
medicine as well as the right to produce the medicine. Both parties agree that
under the same conditions, Party A shall have the right of priority in
cooperation with Party B on new medicines for human being.
8-5. The follow-up improvement as used herein shall mean during the term
of this Contract, the innovation and improvement made by either party or both
parties on the technological achievements as the subject matter hereof. It is
agreed that:
In the event that any follow-up improvement on the technological
achievements as the subject matter hereof is made jointly by both parties, the
nominal rights on the follow-up improvement achievements shall remain with both
parties while the right to use the achievements shall remain only with Party A.
IX. Liquidated damages or indemnity calculation:
In event of breach of contract, the defaulting party shall bear the
responsibilities and liabilities for breach of contract in accordance with the
Contract Law of the People's Republic of China.
X. Dispute settlement:
For any and all disputes arising out of or in connection with the
Contract, the parties can reach amicable settlement through consultation or seek
for reconciliation. In the event that the dispute cannot be resolved through
amicable settlement or reconciliation, the dispute can be submitted for
arbitration by arbitration commission or brought to the local people's court of
the place where the plaintiff is located.
XI. Definitions
11-1. AF-01 Anti-viral Aerosol (temporary name): is a bio-active
glycopeptides with broad-spectrum antiviral function independently developed by
Party B who owns the intellectual property rights on this product. It is proved
through practical use that it has obvious effect on prevention of bird flu for
poultry, Newcastle Disease and foot and mouth disease for livestock, and there
is no toxicity. So it has met the conditions required for applying for new
variety of veterinary medicine. AF-01 Anti-viral Aerosol is the temporary name
for this product, so any other name can be chosen for application of the new
veterinary medicine certificate for this product. The name approved by the state
shall be prevailing. Any change in name shall not have impact on the validity
and content of the Contract.
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11-2. Production Approval: is a production license of livestock
disinfector issued by the department designated by the state, applying in
preventing bird-flu.
XII. Promises warrants and miscellaneous:
12-1. Party A's undertakings and warrants:
12-1-1. Party A undertakes and warrants to honor the principle of good
faith and strictly fulfill all of its responsibilities and
obligations hereunder;
12-1-2. Party A undertakes and warrants to pay the technology transfer fee
to Party B in a timely manner in accordance with the provisions
hereof;
12-1-3. Party A undertakes and warrants to take the responsibility of
applying for production approval, and to bear all the costs for the
aforesaid work.
12-2. Party B's undertakings and warrants:
12-2-1. Party B undertakes and warrants to honor the principle of good
faith and strictly fulfill all of its responsibilities and
obligations hereunder; and assist Party B in completing the
application work for new medicine certificate and production
approval;
12-2-2. Warrant on the completeness of the technology to be transferred.
Party B's implementation of such technology will never be restricted
by the patented technologies of Party A or any third party, nor will
additional cost be paid; before and after the Contract is executed
Party B may not provide any third party other than Party A with
technologies identical or similar to the subject technology or
management experience, which may enable such third party to compete
with Party A or otherwise to impair the interests of Party A. Party
B shall have the obligation to advice, request, manage or urge
relating technicians to fulfill such confidentiality obligation.
12-2-3. Party B undertakes and warrants that there is no dispute over the
rights and interests on the technology to be transferred by Party B
hereunder, and that Party B has the full power and authority to
conclude this Contract;
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12-2-4. Party B undertakes and warrants to xxxx Party A in full amount
within ten working days after receiving the payment for the transfer
fee from Party A.
12-3. The Contract shall be made in quadruplicate, of which two original
copies for each party. The original copies shall be equally authentic. The
Contract shall become effective after the first installment of the transfer fee
is paid by Party A.
12-4. Matters not covered herein shall be settled through consultation
between the parties.
Party A(pound)(0)Kiwa Bio-Tech Products Group Corporation
By: /s/ Xxx Xx
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Chairman of the Board and CEO
Date: May 8, 2006
Party B: Jinan Kelongboao Bio-Tech Co., Ltd.
By: /s/ Xxxxxxxx Xxxxx
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Chairman of the Board
Date: May 8, 2006
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