EXHIBIT 10.18
 

  Contract No.:

 
Merger and Reorganization Contract between Hubei Minkang Pharmaceutical Co., Ltd
and Hubei Kunyan Medicine Industry Co., Ltd
 
Party A: Hubei Minkang Pharmaceutical Co., Ltd
Address: No. 50, Xiba Road, Xiling District, Yichang
Legal Representative: Li Tongtai
 
Party B: Hubei Kunyan Medicine Industry Co., Ltd
Address: Three Gorges Immigration Industrial Park, Yiling Economic Development
Zone, Yiling District, Yichang
Legal Representative: Wang Jikun
 
In order to implement the related affairs about the merger and reorganization
between Hubei Minkang Pharmaceutical Co., Ltd and Hubei Kunyan Medicine Industry
Co., Ltd specified in the “Investment Agreement for the Movement and Expansion
Project of Hubei Minkang Pharmaceutical Co., Ltd” signed between Hubei Minkang
Pharmaceutical Co., Ltd and Yiling People’s Government of Yichang, both parties
would merge and reorganize to establish Hubei Minkang Kunyan Medicine Industry
(Group) Co., Ltd based on the principles of combination between strong
enterprises, complementary advantages between two enterprises, equality and
mutual benefits and joint development. In accordance with the regulations of the
Company Law of the People’s Republic of China and other laws and rules, both
parties have agreed to sign the contract with below terms and condition for the
merger and reorganization after several negotiations:
 
I. Requirements of the Merger and Reorganization
 
1. Both parties would merger together to establish and register Hubei Minkang
Kunyan Medicine Industry (Group) Co., Ltd.
 
2. Before the registration of the new company, both parties would establish a
leading preparation group for Hubei Minkang Kunyan Medicine Industry (Group)
Co., Ltd. The leading preparation group shall be responsible for the
implementation of various tasks to be implemented and improved including the
arrangement and establishment of the company organization, evaluation for both
parties, preparation of management mechanism, the improvement of the articles of
associations and etc. The group leader and the deputy group leader is Li Dongtai
and Wang jikun respectively. The group members (five members) are --------,
whose responsibilities would be determined accordingly.
 
3. The address of the new company is Hubei Kunyan Medicine Industry Co., Ltd,
Three Gorges Immigration Industrial Park, Yiling Economic Development Zone,
Yiling District, Yichang.
 
4. The fixed assets of Party A and Party B would be evaluated and appraised by
an intermediary agency recognized by both parties.
 
5. Both parties shall ensure the establishment of the new company through the
merger and reorganization would be completed before end of June in 2013.
 
II. Conditions for the Merger and Reorganization
 
1. Party A shall have all its fixed assets evaluated and shall take the
evaluated price of all its fixed assets as the contribution to the share capital
of the Hubei Minkang Kunyan Medicine Industry (Group) Co., Ltd.
 
 
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2. The contribution of the share capital from Party B shall be evaluated as the
fixed assets of Party B that would be contributed to the new company. The part
of fixed assets of Party that would be needed by the Hubei Minkang Kunyan
Medicine Industry (Group) Co., Ltd would be evaluated and the evaluated price of
such fixed assets would be taken as the share capital of the Hubei Minkang
Kunyan Medicine Industry (Group) Co., Ltd contributed by Party B.
 
3. The intangible assets of Party A and Party B would all belong to Hubei
Minkang Kunyan Medicine Industry (Group) Co., Ltd after the merger and
reorganization.
 
III. Investment of the Merger and Reorganization
 
1. For the favorable policies of the government endowed to the newly increased
land and factory buildings arising from the establishment of Hubei Minkang
Kunyan Medicine Industry (Group) Co., Ltd, both parties shall share such
favorable policies according to their respective share holding proportion.
 
2. The construction of the injection plant and extracting plant of Party A were
completed and accepted before the merger and reorganization. The two plants were
invested by Party B on the land of Party B. Therefore, such plants would be
taken as the fixed assets of Party B and would be calculated into the share
capital of Hubei Minkang Kunyan Medicine Industry (Group) Co., Ltd as the
contribution of Party B.
 
3. Both parties shall make appropriate adjustment in the actual evaluation of
fixed assets and settle the disputes arising during such evaluation through
negotiations.
 
IV. Stock Equity after the Merger and Reorganization
 
1. Party A shall take 60% of the stock equity of Hubei Minkang Kunyan Medicine
Industry (Group) Co., Ltd.
 
2. Party B shall take 40% of the stock equity of Hubei Minkang Kunyan Medicine
Industry (Group) Co., Ltd.
 
3. In case the evaluation price of assets contributed by Party A or Party B
takes higher proportion in the total share capital of the above specified stock
equity proportion, Party A or Party B shall deduct some assets from the assets
to be evaluated and contributed.
 
V. Creditor’s Rights and Debts of the Merger and Reorganization
 
1. Party A and Party B shall be responsible for its respective creditor’s
rights, debts and legal obligations in regardless whether such creditor’s right,
debt or legal obligations are arising before the merger and reorganization or
after the merger and reorganization. Hubei Minkang Kunyan Medicine Industry
(Group) Co., Ltd shall not be liable for any creditor’s rights, debts or legal
obligations.
 
2. After the establishment of Hubei Minkang Kunyan Medicine Industry (Group)
Co., Ltd, Hubei Minkang Kunyan Medicine Industry (Group) Co., Ltd shall be
liable for the creditor’s rights and debts arising from the merger and
reorganization.
 
VI. Rights and Obligations for both parties of the merger and reorganization
 
(I) Rights and Obligations of Party A
 
1. Party A shall complete the evaluation of its fixed assets within 60 days upon
the signature of this contract.
 
2. Party A shall provide assistance to Party B in completing the process design
and equipment installation of the injection plant and extracting plant within 60
days upon the signature of this contract.
 
 
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3. According to “Investment Agreement for the Movement and Expansion Project of
Hubei Minkang Pharmaceutical Co., Ltd” signed between Hubei Minkang
Pharmaceutical Co., Ltd and Yiling People’s Government of Yichang, Party A shall
complete the movement of the plants before December 3, 2015.
 
4. The favorable policies given to Party A by the Yiling People’s Government
about the establishment of Hubei Minkang Kunyan Medicine Industry (Group) Co.,
Ltd through the merger and reorganization of both parties, which is also the
favorable policies about the Movement and Expansion Project of Hubei Minkang
Pharmaceutical Co., Ltd, shall be enjoyed by Hubei Minkang Kunyan Medicine
Industry (Group) Co., Ltd.
 
(II) Rights and Obligations of Party B
 
1. Party B shall complete the evaluation of its fixed assets that would be
contributed to the share capital of Hubei Minkang Kunyan Medicine Industry
(Group) Co., Ltd within 60 days upon the signature of this contract.
 
2. Party B shall actively assist and coordinate Party A in the application of
favorable policies about the Movement and Expansion Project of Hubei Minkang
Pharmaceutical Co., Ltd, namely the establishment of Hubei Minkang Kunyan
Medicine Industry (Group) Co., Ltd, from Yiling People’s Government.
 
3. Party B shall assist and coordinate Party A in the handling and coordination
of related problems arising from the construction process of the project of
Hubei Minkang Kunyan Medicine Industry (Group) Co., Ltd.
 
VII. Liability for Breach of Contract
 
Both parties shall honor the contract and keep to credit. Any disputes arising
from the performance of the contract shall be settled by both parties through
friendly negotiation.
 
VIII. Both parties could sign supplementary agreements for specific
implementation content or any unmentioned affairs of this contract through
friendly negotiation according to the regulations of related laws and rules of
our country. The supplementary agreements shall have same legal force with this
contract.
 
IX. This contract shall be effective upon the seal and signature of both
parties. This contract shall be made in quintuplicate. Each party shall keep two
copies of the contract and the left copy of contract shall be kept by Yiling
People’s Government. All five copies of contract shall have same legal force.
 
Party A (Seal): Hubei Minkang Pharmaceutical Co., Ltd
Legal Representative (Signature) LEE TONG TAI

Party B: Hubei Kunyan Medicine Industry Co., Ltd
Legal Representative (Signature): WANG JI KUN

Signed at Yiling Economic Development Zone in Yiling District of Yichang
December 28, 2012
 
 
 
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