CHINA MEDICINE CORPORATION
2/F, Guangri Tower, No 9 Siyounan Road 1st Street, Yuexiu District | Guangzhou,
Guangdong Province | 510600 | China
 
 
November 16, 2010

 
 
Henry Chi Fung Ho
Flat 2006, Oi Hong House,
Tsz Oi Court Stage 3
Kowloon, Hong Kong SAR

 
 
Re:
EMPLOYMENT AGREEMENT

 
Dear Henry:
 
On behalf of China Medicine Corporation, a Nevada corporation (the “Company”), I
am pleased to offer you the position of  Chief Financial Officer (“CFO”) to the
Company subject to the following terms and conditions (this “Agreement”):
 
 
1.
Duties and Scope of Employment.

 
(a)           Position.  For the term of your employment under this Agreement
(your “Employment”), the Company agrees to employ you as the CFO of the
Company.  You will report to the Board of Directors and will work directly with
the Company’s CEO.  You will be working out of the Company’s office in
Guangzhou, China.  You will perform the duties and have the responsibilities and
authority customarily performed and held by an employee in your position or as
otherwise may be assigned or delegated to you by the Company’s Board of
Directors and CEO, including but not limited to the following:
 
 
(i)
Strategy

 
(1)           Partner with the CEO on all operational and strategic issues as
they arise; provide strategic recommendations to the CEO based on financial
analysis and projections, cost identification and allocation, and
revenue/expense analysis.
 
(2)           Participate in the ongoing strategic planning process as an
integral member of the senior management team.
 
 
(ii)
Financial Management

 
(1)           Review and approve preparation and finalization of monthly,
quarterly and annual financial reporting materials.
 
(2)           Oversee budgeting, financial forecasting, and cash flow for
administration, existing programs, and proposed new sites.
 
(3)           Manage full-time financial and accounting staff, including hiring
and retaining additional staff as needed in the future.
 
(4)           Coordinate all audit activities.
 

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(iii)
Administrative Leadership and Management

 
(1)           Serve as a business partner to the CEO on the organization’s
financial, budgeting, and administrative processes—including HR, payroll, and
benefits functions—with an eye to continuously developing and improving systems.
 
(2)           Lead technical staff to design an IT plan for the future, and
implement it successfully to meet IT needs (hardware and software) as the
organization grows.  Review all formal finance-, HR-, and IT-related procedures,
processes, and administration, recommending improvements to the systems in place
and managing the systems going forward, including the implementation of a
Western-styled ERP system.
 
(3)           Manage the organization’s physical infrastructure, physical plant,
and system maintenance (phone system, security, cleaning, supplies, etc.), with
assistance from office managers.
 
 
(iv)
Organizational Evaluation and Improvement

 
(1)           Within one-month after assumption of your duties as the CFO, or as
agreed to by the CEO and the Board of Directors, you will report back to the CEO
and the Board of Directors an initial analysis of the strengths and weaknesses
of the finance and accounting staff of the Company.
 
(2)            You will implement a detailed recommended course of action to
improve and strengthen the finance and accounting staff of the Company,
including the implementation of new electronic reporting systems as well as the
hiring of additional finance and accounting staff.
 
(b)           Obligations to the Company.  During your Employment, you shall
devote your full business efforts and time to the Company.  During your
Employment, without the prior written approval of the Company’s Board of
Directors, you shall not render services in any capacity to any other person or
entity and shall not act as a sole proprietor or partner of any other person or
entity or own more than five percent of the stock of any other
corporation.  Notwithstanding the foregoing, you may serve on corporate, civic
or charitable boards or committees, deliver lectures, fulfill speaking
engagements, teach at educational institutions, or manage personal investments
without such advance written consent, provided that such activities do not
individually or in the aggregate interfere with the performance of your duties
under this Agreement.  You shall comply with the Company’s policies and rules,
as they may be in effect from time to time during your Employment.
 
(c)           No Conflicting Obligations.  You represent and warrant to the
Company that you are under no obligations or commitments, whether contractual or
otherwise, that are inconsistent with your obligations under this Agreement.  In
connection with your Employment, you shall not use or disclose any trade secrets
or other proprietary information or intellectual property in which you or any
other person has any right, title or interest and your Employment will not
infringe or violate the rights of any other person.  You represent and warrant
to the Company that you have returned all property and confidential information
belonging to any prior employer.
 

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(d)           Term.    The effective date of this Agreement shall be November
16, 2010 (the “Effective Date”).  Subject to the provisions for termination as
provided herein, the term of this Agreement shall be the period beginning from
the Effective Date and ending  November 16, 2014, or may be extended as agreed
to by you and the Company.
 
 
2.
Cash and Other Incentive Compensation.

 
(a)           Salary.  As compensation for your services, you shall be paid an
initial base annual salary at a gross rate of US$120,000, with US$10,000 to be
paid monthly, among which, the portion of such annual salary equal to
RMB¥180,000 shall be payable by Guangzhou Konzern Medicine Co., Ltd.
(“Konzern”), and the remainder by China Medicine Corporation.  The annual
compensation specified in this subsection (a), together with any modifications
in such compensation that the Company may make from time to time, is referred to
in this Agreement as “Base Salary.”  The Board or Compensation Committee of the
Board shall review your Base Salary at least annually.  Effective as of the date
of any change to your Base Salary, the Base Salary as so changed shall be
considered the new Base Salary for all purposes of this Agreement.
 
(b)           Incentive Bonuses.  You will be entitled to a US$10,000 sign-on
bonus if you choose to continue employment from the Company beginning January 1,
2011.  In addition, for each full year of employment after January 1, 2011, you
will be eligible to be considered for an annual incentive bonus each calendar
year during the term of your employment under this Agreement based upon the
achievement of certain objective or subjective criteria established by the
Company’s Board of Directors (the “Board”) or Compensation Committee of the
Board, and agreed to by you.  The determinations of the Board with respect to
such bonus shall be final and binding.  You shall not earn an incentive bonus
unless you are employed by the Company on the date when such bonus is
payable.  For the first full calendar year of your employment with the Company,
i.e. calendar year 2011, your incentive bonuses will not be less than US$20,000.
 
(c)           Housing.  While you are employed by the Company and while your
place of work continues to be Guangzhou, China, the Company agrees to provide
you with a housing stipend of RMB¥2,000 per month payable in China.
 
(d)           Restricted Stock.  The Company granted you one hundred twenty
thousand (120,000) shares of the Company's common stock (the “Restricted Stock”)
as of October 1, 2010 (the “Grant Date”) pursuant to the employment agreement by
and between the Company and you dated August 31, 2010 for your Vice President of
Finance and Accounting position and effective October 1, 2010 (the “Old
Employment Agreement”) and this Agreement affirms such grant, subject to the
terms set forth below and the Company’s 2006 Long-Term Incentive Plan (the “2006
Plan”). To the extent there is contradictory provisions between this Agreement
and the 2006 Plan, the provisions herein shall prevail unless the Board or
Compensation Committee specifically resolves otherwise.
 

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(i)           Issuance of Stock.  The Company shall cause the shares of
Restricted Stock to be issued in your name upon grant.  The Restricted Stock
shall be held in the custody of the Company or its designee for your
account.  The Restricted Stock shall be subject to and shall bear appropriate
legends with respect to the restrictions described herein.
 
(ii)           Vesting.  Your restricted stock shall vest in the following
schedule: (a) as to twenty percent (20%) of such Restricted Stock (24,000
shares) at 12:01 a.m. on October 2, 2011, (b) as to an additional twenty percent
(20%) of such Restricted Stock (24,000 shares) at 12:01 a.m. on October 2, 2012,
(c) as to an additional thirty percent (30%) of such Restricted Stock (36,000
shares) at 12:01 a.m. on October 2, 2013, and (d) as to the final thirty percent
(30%) of such Restricted Stock (36,000 shares) at 12:01 a.m. on October 2, 2014,
so as to be 100% vested at 12:01 a.m. on October 2, 2014, conditioned upon your
continued employment with the Company as of each vesting date.
 
 
(iii)
Restrictions.

 
(1)           You may not sell, transfer, assign, pledge or otherwise encumber
or dispose of any portion of the Restricted Stock or rights granted hereunder
until such portion of the Restricted Stock becomes vested in accordance with
Section 2(d)(ii) of this Agreement.  The period of time between the Grant Date
and the date all Restricted Stock becomes vested is referred to herein as the
“Restriction Period.”
 
(2)           If your employment with the Company is terminated for any reason
which does not give rise to 100% vesting of the Restricted Stock, as provided in
Section 2(d)(ii) above, you shall forfeit the balance of the Restricted Stock
subject to the provisions of this Agreement which have not vested at the time of
your termination of employment, and transfer ownership back to the Company,
provided that if your employment is not terminated for resignation or for Cause,
you will be entitled to a pro-rata portion, based upon time of employment, of
the stock that is not yet vested.
 
(iv)           This section is deemed to be a “Restricted Stock Award Agreement”
for the purposes of Section 7(b) of the 2006 Plan.
 
3.           Vacation/PTO and Employee Benefits.  During your Employment, you
shall be eligible to accrue up to 15 days of paid vacation / paid time off,
pro-rated for the remainder of this calendar year, in accordance with the
Company’s vacation / paid time off policy, as it may be amended from time to
time.  During your Employment, you shall be eligible to participate in the
employee benefit plans maintained by the Company and generally available to
similarly situated employees of the Company, subject in each case to the
generally applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan.
 
4.           Business Expenses.  The Company will reimburse you for your
necessary and reasonable business expenses incurred in connection with your
duties hereunder upon presentation of an itemized account and appropriate
supporting documentation, all in accordance with the Company’s generally
applicable policies.
 

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5.
Termination.

 
(a)           Employment at Will.  Your Employment shall be “at will,” meaning
that either you or the Company shall be entitled to terminate your Employment at
any time and for any reason, with or without Cause.  Any contrary
representations that may have been made to you shall be superseded by this
Agreement.  This Agreement shall constitute the full and complete agreement
between you and the Company on the “at-will” nature of your Employment, which
may only be changed in an express written agreement signed by you and a duly
authorized officer of the Company.
 
(b)           Rights Upon Termination.  Except as expressly provided in
Section 6, upon the termination of your Employment, you shall only be entitled
to the compensation and benefits earned and the reimbursements described in this
Agreement for the period preceding the effective date of the termination.
 
 
6.
Termination Benefits.

 
(a)           General Release.  Any other provision of this Agreement
notwithstanding, subsections (b) shall not apply unless and until (i) you have
executed (and do not revoke) a full and complete general release of all claims
in a form provided by the Company without alteration and (ii) you have returned
all Company property.
 
(b)           Severance Pay.  If, during the term of this Agreement, the Company
terminates your Employment for any reason other than Cause, death or Permanent
Disability, then, in addition to the amounts payable in accordance with
Section 5(b), the Company shall pay you severance pay at a rate equal to your
Base Salary in effect at the time of termination of your Employment for a period
of 3 month(s) following the termination of your Employment (the “Continuation
Period”).  
 
(c)           Definition of “Cause.”  For all purposes under this Agreement,
“Cause” shall mean:
 
(i)           any breach by you of this Agreement, the Confidential Information
and Invention Assignment Agreement between you and the Company, or any other
written agreement between you and the Company, if such breach causes material
harm to the Company;
 
(ii)           any failure by you to comply with the Company’s written policies
or rules, as they may be in effect from time to time during your Employment, if
such failure causes material harm to the Company;
 
(iii)           your repeated failure to follow reasonable and lawful
instructions from the Company or the Chief Executive Officer of the Company and
your failure to cure such condition after receiving 20 days advance written
notice;
 

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(iv)           commission, conviction of, or a plea of “guilty” or “no contest”
to, a felony under the laws of any jurisdiction by you;
 
(v)           your misappropriation of funds or property of the Company;
 
(vi)           neglect of your duties; or
 
(vii)           any gross or willful misconduct by you.
 
(d)           Definition of “Permanent Disability.”  For all purposes under this
Agreement, “Permanent Disability” shall mean your inability to perform the
essential functions of your position with or without reasonable accommodation
for a period of 90 consecutive days because of your physical or mental
impairment.
 
 
7.
Pre-Employment Conditions.

 
(a)           Confidentiality Agreement.  Your acceptance of this offer and
commencement of employment with the Company is contingent upon the execution,
and delivery to an officer of the Company, of the Company’s Confidential
Information and Invention Assignment Agreement, a copy of which is enclosed for
your review and execution (the “Confidentiality Agreement”), prior to or on your
Start Date.
 
(b)           Right to Work.  You will be required to provide to the Company
documentary evidence of your identity and eligibility for employment in the
People’s Republic of China.  Such documentation must be provided to us within
three (3) business days after your Effective Date, or our employment
relationship with you may be terminated.
 
(c)           Verification of Information.  This offer of employment is also
contingent upon the successful verification of the information you provided to
the Company during your application process, as well as a general background
check performed by the Company to confirm your suitability for employment.  By
accepting this offer of employment, you warrant that all information provided by
you is true and correct to the best of your knowledge, you agree to execute any
and all documentation necessary for the Company to conduct a background check
and you expressly release the Company from any claim or cause of action arising
out of the Company’s verification of such information.
 
 
8.
Successors.

 
(a)           Company’s Successors.  This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets.  For all purposes under this Agreement, the
term “Company” shall include any successor to the Company’s business or assets
that becomes bound by this Agreement.
 
(b)           Your Successors.  This Agreement and all of your rights hereunder
shall inure to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
 

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9.
Miscellaneous Provisions.

 
(a)           Indemnification.  The Company shall indemnify you to the maximum
extent permitted by applicable law and the Company’s Bylaws with respect to your
service and you shall also be covered under a directors and officers liability
insurance policy paid for by the Company to the extent that the Company
maintains such a liability insurance policy now or in the future.
 
(b)           Notice.  Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by registered or certified mail.  In your
case, mailed notices shall be addressed to you at the home address that you most
recently communicated to the Company in writing.  In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
 
(c)           Modifications and Waivers.  No provision of this Agreement shall
be modified, waived or discharged unless the modification, waiver or discharge
is agreed to in writing and signed by you and by an authorized officer of the
Company (other than you).  No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
 
(d)           Whole Agreement.  No other agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.  This Agreement and the
Confidentiality Agreement contain the entire understanding of the parties with
respect to the subject matter hereof and supersedes any and all previous
agreement and understanding regarding your Employment including the Old
Employment Agreement.
 
(e)           Withholding Taxes.  All payments made under this Agreement shall
be subject to reduction to reflect taxes or other charges required to be
withheld by laws in Hong Kong except the compensation paid by Konzern.
 
(f)           Choice of Law and Severability.  This Agreement shall be
interpreted in accordance with the laws of Hong Kong without giving effect to
provisions governing the choice of law.  If any provision of this Agreement
becomes or is deemed invalid, illegal or unenforceable in any applicable
jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the minimum extent necessary to
conform to applicable law so as to be valid and enforceable or, if such
provision cannot be so amended without materially altering the intention of the
parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect.  If any provision of this
Agreement is rendered illegal by any present or future statute, law, ordinance
or regulation (collectively, the “Law”) then that provision shall be curtailed
or limited only to the minimum extent necessary to bring the provision into
compliance with the Law.  All the other terms and provisions of this Agreement
shall continue in full force and effect without impairment or limitation.
 

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(g)           No Assignment.  This Agreement and all of your rights and
obligations hereunder are personal to you and may not be transferred or assigned
by you at any time.  The Company may assign its rights under this Agreement to
any entity that assumes the Company’s obligations hereunder in connection with
any sale or transfer of all or a substantial portion of the Company’s assets to
such entity.
 
(h)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
[Signature Page Follows]
 

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We are all delighted to be able to extend you this offer and look forward to
working with you.  To indicate your acceptance of the Company’s offer, please
sign and date this letter in the space provided below and return it to me, along
with a signed and dated original copy of the Confidentiality Agreement, on or
before November 16, 2010.  The Company requests that you begin work in this new
position on or before November 16, 2010
 

  Very truly yours,           CHINA MEDICINE CORPORATION          
 
By:
/s/ Senshan Yang      
(Signature)
            Name:  Senshan Yang     Title:
Chief Executive Officer
 

 

ACCEPTED AND AGREED:                   HENRY CHI FUNG HO                        
   
/s/ Henry Chi Fung Ho
   
 
 
(Signature)
   
 
           
November 16, 2010
   
 
  Date        

 
Attachment A:  Confidential Information and Invention Assignment Agreement
 
 
 

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ATTACHMENT A
 
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
 
(See Attached)
 
 
 
 
 

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CHINA MEDICINE CORPORATION
 
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
 
Employee Name: Henry Chi Fung Ho
 
Effective Date: November 16, 2010
 
As a condition of my becoming employed (or my employment being continued) by
China Medicine Corporation, a Nevada corporation, or any of its current or
future subsidiaries, affiliates, successors or assigns (collectively, the
“Company”), and in consideration of my employment with the Company and my
receipt of the compensation now and hereafter paid to me by the Company, I agree
to the following:
 
1.    Relationship.  This Agreement will apply to my employment relationship
with the Company.  If that relationship ends and the Company, within a year
thereafter, either reemploys me or engages me as a consultant, I agree that this
Agreement will also apply to such later employment or consulting relationship,
unless the Company and I otherwise agree in writing.  Any such employment or
consulting relationship between the Company and me, whether commenced prior to,
upon or after the date of this Agreement, is referred to herein as the
“Relationship.”
 
2.    Duties.  I will perform for the Company such duties as may be designated
by the Company from time to time or that are otherwise within the scope of the
Relationship and not contrary to instructions from the Company.  During the
Relationship, I will devote my entire best business efforts to the interests of
the Company and will not engage in other employment or in any activities
detrimental to the best interests of the Company without the prior written
consent of the Company.
 
3.    Confidential Information.
 
(a)    Protection of Information.  I understand that during the Relationship,
the Company intends to provide me with information, including Confidential
Information (as defined below), without which I would not be able to perform my
duties to the Company.  I agree, at all times during the term of the
Relationship and thereafter, to hold in strictest confidence, and not to use,
except for the benefit of the Company to the extent necessary to perform my
obligations to the Company under the Relationship, and not to disclose to any
person, firm, corporation or other entity, without written authorization from
the Company in each instance, any Confidential Information that I obtain, access
or create during the term of the Relationship, whether or not during working
hours, until such Confidential Information becomes publicly and widely known and
made generally available through no wrongful act of mine or of others who were
under confidentiality obligations as to the item or items involved.  I further
agree not to make copies of such Confidential Information except as authorized
by the Company.
 
(b)    Confidential Information.  I understand that “Confidential Information”
means information and physical material not generally known or available outside
the Company and information and physical material entrusted to the Company in
confidence by third parties.  Confidential Information includes, without
limitation:  (i) Company Inventions (as defined below); (ii) technical data,
trade secrets, know-how, research, product or service ideas or plans, software
codes and designs, developments, inventions, laboratory notebooks, processes,
formulas, techniques, biological materials, mask works, engineering designs and
drawings, hardware configuration information, lists of, or information relating
to, employees and consultants of the Company (including, but not limited to, the
names, contact information, jobs, compensation, and expertise of such employees
and consultants), lists of, or information relating to, suppliers and customers
(including, but not limited to, customers of the Company on whom I called or
with whom I became acquainted during the Relationship), price lists, pricing
methodologies, cost data, market share data, marketing plans, licenses, contract
information, business plans, financial forecasts, historical financial data,
budgets or other business information disclosed to me by the Company either
directly or indirectly, whether in writing, electronically, orally, or by
observation.
 
 
 

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(c)    Third Party Information.  My agreements in this Section 3 are intended to
be for the benefit of the Company and any third party that has entrusted
information or physical material to the Company in confidence.
 
(d)    Other Rights.  This Agreement is intended to supplement, and not to
supersede, any rights the Company may have in law or equity with respect to the
protection of trade secrets or confidential or proprietary information.
 
4.    Ownership of Inventions.
 
(a)     Inventions Retained and Licensed.  I have attached hereto, as Exhibit A,
a complete list describing with particularity all Inventions (as defined below)
that, as of the Effective Date, belong solely to me or belong to me jointly with
others, and that relate in any way to any of the Company’s actual or proposed
businesses, products, services, or research and development, and which are not
assigned to the Company hereunder; or, if no such list is attached, I represent
that there are no such Inventions at the time of signing this Agreement.
 
(b)    Use or Incorporation of Inventions.  If in the course of the
Relationship, I use or incorporate into a product, process or machine any
Invention not covered by Section 4(d) of this Agreement in which I have an
interest, I will promptly so inform the Company.  Whether or not I give such
notice, I hereby irrevocably grant to the Company a nonexclusive, fully paid-up,
royalty-free, assumable, perpetual, worldwide license, with right to transfer
and to sublicense, to practice and exploit such Invention and to make, have
made, copy, modify, make derivative works of, use, sell, import, and otherwise
distribute such Invention under all applicable intellectual property laws
without restriction of any kind.
 
(c)    Inventions.  I understand that “Inventions” means discoveries,
developments, concepts, designs, ideas, know how, improvements, inventions,
trade secrets and/or original works of authorship, whether or not patentable,
copyrightable or otherwise legally protectable.  I understand this includes, but
is not limited to, any new product, machine, article of manufacture, biological
material, method, procedure, process, technique, use, equipment, device,
apparatus, system, compound, formulation, composition of matter, design or
configuration of any kind, or any improvement thereon.  I understand that
“Company Inventions” means any and all Inventions that I may solely or jointly
author, discover, develop, conceive, or reduce to practice during the period of
the Relationship, except as otherwise provided in Section 4(g) below.
 
 
 

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(d)     Assignment of Company Inventions.  I agree that I will promptly make
full written disclosure to the Company, will hold in trust for the sole right
and benefit of the Company, and hereby assign to the Company, or its designee,
all my right, title and interest throughout the world in and to any and all
Company Inventions and all patent, copyright, trademark, trade secret and other
intellectual property rights therein.  I further acknowledge that all Company
Inventions that are made by me (solely or jointly with others) within the scope
of and during the period of the Relationship are “works made for hire” (to the
greatest extent permitted by applicable law) and are compensated by my
salary.  I hereby waive and irrevocably quitclaim to the Company or its designee
any and all claims, of any nature whatsoever, that I now have or may hereafter
have for infringement of any and all Company Inventions.
 
(e)    Maintenance of Records.  I agree to keep and maintain adequate and
current written records of all Company Inventions made or conceived by me
(solely or jointly with others) during the term of the Relationship.  The
records may be in the form of notes, sketches, drawings, flow charts, electronic
data or recordings, laboratory notebooks, or any other format.  The records will
be available to and remain the sole property of the Company at all times.  I
agree not to remove such records from the Company’s place of business except as
expressly permitted by Company policy which may, from time to time, be revised
at the sole election of the Company for the purpose of furthering the Company’s
business.  I agree to deliver all such records (including any copies thereof) to
the Company at the time of termination of the Relationship as provided for in
Sections 5 and 6.
 
(f)    Patent and Copyright Rights.  I agree to assist the Company, or its
designee, at its expense, in every proper way to secure the Company’s, or its
designee’s, rights in the Company Inventions and any copyrights, patents,
trademarks, mask work rights, moral rights, or other intellectual property
rights relating thereto in any and all countries, including the disclosure to
the Company or its designee of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments,
recordations, and all other instruments which the Company or its designee shall
deem necessary in order to apply for, obtain, maintain and transfer such rights,
or if not transferable, waive such rights, and in order to assign and convey to
the Company or its designee, and any successors, assigns and nominees the sole
and exclusive right, title and interest in and to such Company Inventions, and
any copyrights, patents, mask work rights or other intellectual property rights
relating thereto.  I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue during and at all times after the end of the Relationship and until the
expiration of the last such intellectual property right to expire in any country
of the world.  I hereby irrevocably designate and appoint the Company and its
duly authorized officers and agents as my agent and attorney-in-fact, to act for
and in my behalf and stead to execute and file any such instruments and papers
and to do all other lawfully permitted acts to further the application for,
prosecution, issuance, maintenance or transfer of letters patent, copyright,
mask work and other registrations related to such Company Inventions.  This
power of attorney is coupled with an interest and shall not be affected by my
subsequent incapacity.
 
 
 

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(g)     Exception to Assignments.  I understand that the Company Inventions will
not include, and the provisions of this Agreement requiring assignment of
inventions to the Company do not apply to, any invention which qualifies fully
for exclusion under the provisions of applicable state law, if any, attached
hereto as Exhibit B.  In order to assist in the determination of which
inventions qualify for such exclusion, I will advise the Company promptly in
writing, during and after the term of the Relationship, of all Inventions solely
or jointly conceived or developed or reduced to practice by me during the period
of the Relationship.
 
5.     Company Property; Returning Company Documents.  I acknowledge and agree
that I have no expectation of privacy with respect to the Company’s
telecommunications, networking or information processing systems (including,
without limitation, files, e-mail messages, and voice messages) and that my
activity and any files or messages on or using any of those systems may be
monitored at any time without notice.  I further agree that any property
situated on the Company’s premises and owned by the Company, including disks and
other storage media, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice.  I agree
that, at the time of termination of the Relationship, I will deliver to the
Company (and will not keep in my possession, recreate or deliver to anyone else)
any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, laboratory
notebooks, materials, flow charts, equipment, other documents or property, or
reproductions of any of the aforementioned items developed by me pursuant to the
Relationship or otherwise belonging to the Company, its successors or assigns.
 
6.    Termination Certification.  In the event of the termination of the
Relationship, I agree to sign and deliver the “Termination Certification”
attached hereto as Exhibit C; however, my failure to sign and deliver the
Termination Certification shall in no way diminish my continuing obligations
under this Agreement.
 
7.    Notice to Third Parties.  I agree that during the periods of time during
which I am restricted in taking certain actions by the terms of this Agreement
(the “Restriction Period”), I shall inform any entity or person with whom I may
seek to enter into a business relationship (whether as an owner, employee,
independent contractor, or otherwise) of my contractual obligations under this
Agreement.  I also understand and agree that the Company may, with or without
prior notice to me and during or after the term of the Relationship, notify
third parties of my agreements and obligations under this Agreement.  I further
agree that, upon written request by the Company, I will respond to the Company
in writing regarding the status of my employment or proposed employment with any
party during the Restriction Period.
 
8.    Solicitation of Employees, Consultants and Other Parties.  As described
above, I acknowledge and agree that the Company's Confidential Information
includes information relating to the Company's employees, consultants, customers
and others, and that I will not use or disclose such Confidential Information
except as authorized by the Company.  I further agree as follows:
 
(a)    Employees, Consultants. I agree that during the term of the Relationship,
and for a period of twelve (12) months immediately following the termination of
the Relationship for any reason, whether with or without cause, I shall not
either directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees or consultants to terminate their relationship with the
Company, or attempt to solicit, induce, recruit, encourage or take away
employees or consultants of the Company, either for myself or for any other
person or entity.
 
 
 

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(b)    Other Parties. I agree that during the term of the Relationship, and for
a period of twelve (12) months immediately following the termination of the
Relationship for any reason, whether with or without cause, I shall not use any
Confidential Information of the Company to negatively influence any of the
Company’s clients or customers from purchasing Company products or services or
to solicit or influence or attempt to influence any client, customer or other
person either directly or indirectly, to direct any purchase of products and/or
services to any person, firm, corporation, institution or other entity in
competition with the business of the Company.
 
9.    At-Will Relationship.  I understand and acknowledge that, except as may be
otherwise explicitly provided in a separate written agreement between the
Company and me, my Relationship with the Company is and shall continue to be
at-will, as defined under applicable law, meaning that either I or the Company
may terminate the Relationship at any time for any reason or no reason, without
further obligation or liability, other than those provisions of this Agreement
that explicitly survive the termination of the Relationship.
 
10.    Representations and Covenants.
 
(a)    Facilitation of Agreement.  I agree to execute promptly, both during and
after the end of the Relationship, any proper oath, and to verify any proper
document, required to carry out the terms of this Agreement, upon the Company’s
written request to do so.
 
(b)    No Conflicts.  I represent that my performance of all the terms of this
Agreement does not and will not breach any agreement I have entered into, or
will enter into, with any third party, including without limitation any
agreement to keep in confidence proprietary information or materials acquired by
me in confidence or in trust prior to or during the Relationship.  I will not
disclose to the Company or use any inventions, confidential or non-public
proprietary information or material belonging to any previous client, employer
or any other party.  I will not induce the Company to use any inventions,
confidential or non-public proprietary information, or material belonging to any
previous client, employer or any other party.  I acknowledge and agree that I
have listed on Exhibit A all agreements (e.g., non-competition agreements,
non-solicitation of customers agreements, non-solicitation of employees
agreements, confidentiality agreements, inventions agreements, etc.), if any,
with a current or former client, employer, or any other person or entity, that
may restrict my ability to accept employment with the Company or my ability to
recruit or engage customers or service providers on behalf of the Company, or
otherwise relate to or restrict my ability to perform my duties for the Company
or any obligation I may have to the Company.  I agree not to enter into any
written or oral agreement that conflicts with the provisions of this Agreement.
 
 
 

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(c)    Voluntary Execution.  I certify and acknowledge that I have carefully
read all of the provisions of this Agreement, that I understand and have
voluntarily accepted such provisions, and that I will fully and faithfully
comply with such provisions.
 
11.    General Provisions.
 
(a)    Governing Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of Hong Kong,
without giving effect to the principles of conflict of laws.
 
(b)    Entire Agreement.  This Agreement sets forth the entire agreement and
understanding between the Company and me relating to its subject matter and
merges all prior discussions between us.  No amendment to this Agreement will be
effective unless in writing signed by both parties to this Agreement.  The
Company shall not be deemed hereby to have waived any rights or remedies it may
have in law or equity, nor to have given any authorizations or waived any of its
rights under this Agreement, unless, and only to the extent, it does so by a
specific writing signed by a duly authorized officer of the Company, it being
understood that, even if I am an officer of the Company, I will not have
authority to give any such authorizations or waivers for the Company under this
Agreement without specific approval by the Board of Directors.  Any subsequent
change or changes in my duties, obligations, rights or compensation will not
affect the validity or scope of this Agreement.
 
(c)    Severability.  If one or more of the provisions in this Agreement are
deemed void or unenforceable to any extent in any context, such provisions shall
nevertheless be enforced to the fullest extent allowed by law in that and other
contexts, and the validity and force of the remainder of this Agreement shall
not be affected.  The Company and I have attempted to limit my right to use,
maintain and disclose the Company’s Confidential Information, and to limit my
right to solicit employees and customers only to the extent necessary to protect
the Company from unfair competition.  Should a court of competent jurisdiction
determine that the scope of the covenants contained in Section 8 exceeds the
maximum restrictiveness such court deems reasonable and enforceable, the parties
intend that the court should reform, modify and enforce the provision to such
narrower scope as it determines to be reasonable and enforceable under the
circumstances existing at that time.
 
(d)    Successors and Assigns.  This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives, and my successors and
assigns, and will be for the benefit of the Company, its successors, and its
assigns.
 
(e)    Remedies.  I acknowledge and agree that violation of this Agreement by me
may cause the Company irreparable harm, and therefore agree that the Company
will be entitled to seek extraordinary relief in court, including, but not
limited to, temporary restraining orders, preliminary injunctions and permanent
injunctions without the necessity of posting a bond or other security (or, where
such a bond or security is required, I agree that a $1,000 bond will be
adequate), in addition to and without prejudice to any other rights or remedies
that the Company may have for a breach of this Agreement.
 
 
 

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(f)    Advice of Counsel.  I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I
HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I
HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT.  THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF
THE DRAFTING OR PREPARATION HEREOF.
 
[Signature Page Follows]
 
 
 

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The parties have executed this Agreement on the respective dates set forth
below, to be effective as of the Effective Date first above written.
 

  THE COMPANY:           CHINA MEDICINE CORPORATION          
 
By:
        
(Signature)
            Name:  SENSHAN YANG     Title: CHIEF EXECUTIVE OFFICER            
Address:     2/F, Guangri Tower, No. 9 Siyounan Road     1st Street, Yuexiu
District, Guangzhou,     China 510600     Fax: 86-20-8737 3030            
Date:           

 

  EMPLOYEE:           HENRY CHI FUNG HO     (PRINT NAME)        
 
    
    (Signature)             Address:     Flat 2006, Oi Hong House,     Tsz Oi
Court Stage 3, Kowloon, Hong Kong     Fax: N/A             Date:  November 16,
2010  

 
 
 

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EXHIBIT A
 
LIST OF PRIOR INVENTIONS
 
AND ORIGINAL WORKS OF AUTHORSHIP
 
EXCLUDED UNDER SECTION 4(a)
 
 
        Title        
 
   Date   
Identifying Number
or Brief Description
     

 

x
No inventions, improvements, or original works of authorship      
 
 
 
o
Additional sheets attached
 
 

 

Signature of Employee:  
    
 
          Print Name of Employee: Henry Chi Fung Ho      

 

Date:   November 16, 2010            

 
 
 

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EXHIBIT B
 
Section 2870 of the California Labor Code is as follows:
 
(a)           Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
 
(1)           Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer; or
 
(2)           Result from any work performed by the employee for the employer.
 
(b)           To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
 
OR
 
RCW 49.44.140 of the Revised Code of Washington is as follows:
 
(1)           A provision in an employment agreement which provides that an
employee shall assign or offer to assign any of the employee’s rights in an
invention to the employer does not apply to an invention for which no equipment,
supplies, facilities, or trade secret information of the employer was used and
which was developed entirely on the employee’s own time, unless (a) the
invention relates (i) directly to the business of the employer, or (ii) to the
employer's actual or demonstrably anticipated research or development, or (b)
the invention results from any work performed by the employee for the employer.
Any provision which purports to apply to such an invention is to that extent
against the public policy of this state and is to that extent void and
unenforceable.
 
(2)           An employer shall not require a provision made void and
unenforceable by subsection (1) of this section as a condition of employment or
continuing employment.
 
(3)           If an employment agreement entered into after September 1, 1979,
contains a provision requiring the employee to assign any of the employee’s
rights in any invention to the employer, the employer must also, at the time the
agreement is made, provide a written notification to the employee that the
agreement does not apply to an invention for which no equipment, supplies,
facility, or trade secret information of the employer was used and which was
developed entirely on the employee’s own time, unless (a) the invention relates
(i) directly to the business of the employer, or (ii) to the employer's actual
or demonstrably anticipated research or development, or (b) the invention
results from any work performed by the employee for the employer.
 
 
 

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EXHIBIT C
 
TERMINATION CERTIFICATION
 
This is to certify that I do not have in my possession, nor have I failed to
return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, laboratory
notebooks, flow charts, materials, equipment, other documents or property, or
copies or reproductions of any aforementioned items belonging to
[                        ], a [                      ] corporation, its
subsidiaries, affiliates, successors or assigns (collectively, the “Company”).
 
I further certify that I have complied with all the terms of the Company’s
Confidential Information and Invention Assignment Agreement signed by me,
including the reporting of any Inventions (as defined therein), conceived or
made by me (solely or jointly with others) covered by that agreement, and I
acknowledge my continuing obligations under that agreement.
 
I further agree that, in compliance with the Confidential Information and
Invention Assignment Agreement, I will preserve as confidential all trade
secrets, confidential knowledge, data or other proprietary information relating
to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.
 
I further agree that for twelve (12) months from the date of this Certification,
I shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company’s employees or consultants to terminate their relationship
with the Company, or attempt to solicit, induce, recruit, encourage or take away
employees or consultants of the Company, either for myself or for any other
person or entity.
 
Further, I agree that for twelve (12) months from the date of this
Certification, I shall not use any Confidential Information of the Company to
negatively influence any of the Company’s clients or customers from purchasing
Company products or services or to solicit or influence or attempt to influence
any client, customer or other person either directly or indirectly, to direct
any purchase of products and/or services to any person, firm, corporation,
institution or other entity in competition with the business of the Company.
 

Date:  November 16, 2010      EMPLOYEE:                
 
  Henry Chi Fung Ho         (Print Employee’s Name)                            
                       (Signature)  

 

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