Collaborative
      Agreement for Development of
      Genetic Engineering Malaria Vaccine

    


    Party
      A: Shanghai Wanxing Bio-Pharmaceuticals Co. LTD

    Party
      B: Second Military Medical University, PLA

    


     

    In
      order
      to accelerate the developing process of genetic engineering malaria vaccine
      and
      put it into the clinical use as soon as possible, based on the principles of
      equality, Mutual
      beneficial and good faith, Party A
      and
Party B
      entered
      into a Cooperative Agreement for Development of Genetic
      Engineering Malaria Vaccine.

     

    1.
      The Contents and Requirements of the Target Techniques

    Party
      A
      and Party B are likely to collaboratively develop the genetic engineering
      malaria vaccine, a national class I new drug with intellectual property owned
      by
      Party B, to make it entered into the clinical investigation, acquire the new
      drug certificate and use it to prevent malaria infection. The transfer fee
      of
      the project is RMB 23 million.

    


    2.
      Target technical Endpoints

    2.1
      Acquire the SFDA’s approval of clinical trials;

    2.2
      Conduct the clinical trials;

    2.3
      Acquire the New Drug Certificate;

    2.4
      Acquire the production Certificate.

    


    3.
      Responsibilities

    3.1
      Party A

    3.1.1
      To
      provide staff and fertilities and establish a stable and feasible pilot-test
      process;

    3.1.2
      To
      prepare enough pure antigens for the preclinical research;

    3.1.3
      To
      organize and arrange the preclinical researches designed by both
      sides;

    3.1.4
      To
      complete the self-examination of the semi-product and the product, and send
      the
      product samples to NICPBP for inspection.

    3.1.5
      Be
      responsible for compiling, writing and submitting the application documents
      for
      clinical research.

    3.1.6
      Be
      responsible for applying the approvals of clinical trials and new drug
      certificate.

    3.1.7
      Be
      responsible for organizing, proceeding, coordinating the clinical
      trials.

    3.1.8
      To
      pay the installment payments timely to B per the Agreement.

    3.2
      Party B

    3.2.1
      After signing the Agreement and receiving the first milestone payment from
      Party
      A, Party B should provide the engineering strain of malaria vaccine, related
      laboratory techniques and methods to Party A for pilot research.

    3.2.2
      Help Party A to accomplish the necessary laboratory tests and clinical trials
      in
      accordance to the requirements of application procedures.

    3.2.3
      Prepare the documents of the construction of the engineering strain and the
      documents of the identification of physical and chemical characters of some
      proteins for application of clinical trials; participate in the new drug
      assessment meeting.

    


    
      
         

      

      
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    4.
      Research Funding and Payment

    4.1
      On
      the date of signing the Agreement, Party A shall Pay 3 millions RMB for Party
      B
      which will be used for preclinical research.

    4.2
      The
      expenditures in pilot research, preclinical research clinical trials and the
      applications should be paid by Party A except those should be done by Party
      B
      per the Agreement.

    4.3
      Party
      A shall be responsible for the payment of the sample test fees and other test
      fees to NICPBP.

    


    5.
      Belongings of the Achievements and the Rights of Both
      Sides

    Party
      A
      and Party B will develop the project jointly and will share the fruitful results
      together. The new drug certificate will be applied jointly by both sides and
      owned by both sides. Party B’s name will be put before Party A’s
      name.

    5.1 Regarding
      the Patent 

    In
      the
      event that Party B has filed the patent applications to the patent licensing
      authorities, the rights of both the national patent and the international patent
      application belong to Party B. After the agreement is signed and become
      effective, Party A holds the exclusive right of the patent relating to use
      and
      preparation of malaria vaccine and will pay the fees to maintain the
      effectiveness of the patent. With regard to the application of international
      patents, Party A may recommend countries or areas for patent application to
      Party B, and Party A should pay the patent applying and maintaining fees. If
      the
      Agreement is terminated by any reasons during the execution of the agreement,
      the exclusive right to exploit the above patent would also be terminated. If
      further patent application relating to this patent needs to be submitted in
      the
      agreement effective period, the related issues should be negotiated by both
      parties. 

    5.2
      Regarding
      the Payment of the Transfer Fees

    When
      the
      drug certificate is licensed, Party A shall pay Party B 20 millions RMB as
      transfer fee of the project, and Party B should transfer it’s ownership of the
      certificate to Party A. The transfer fees will be paid as follows:

    	l  	
            The
              first part of transfer fee is RMB 10 millions, and will be paid by
              party A
              to Party B within 5 working days after the New Drug Certificate be
              licensed.

          


    	l  	
            The
              second part of transfer fee is RMB 5 millions, and will be paid by
              Party A
              to Party B within 5 working days after the Trial Production Certificate
              be
              obtained.

          


    	l  	
            The
              third part of transfer fee is RMB 5 millions, and will be paid by Party
              A
              to Party B within 5 working days after the Production Certificate be
              obtained.

          


    If
      the
      New Drug Certificate and the Trial Production Certificate are licensed at the
      same time, the payment is as follows:

    	l  	
            The
              first part of transfer fee is RMB 10 millions, and should be paid by
              Party
              A to Party B within 5 working days after two certificates are
              obtained.

          


    	l  	
            The
              second part of transfer fee is RMB 5 millions, and should be paid by
              Party
              A to Party B within 6 months after two certificates are
              obtained.

          


    	l  	
            The
              third part of transfer fee is RMB 5 millions, and should be paid by
              Party
              A to Party B within 5 working days after the Production Certificates
              is
              obtained.

          


     

    
      
         

      

      
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      5.3 After
        the
        transfer fees have been paid following the above schedule, Party A will hold
        the
production and sale rights of this project.

    

    5.4Under
      the
      same situations, Party A has the priority of cooperating or buying the improved
      malaria vaccines further developed by Party B.

    5.5The
      new
      drug research grants and risk investment funds applied by Party A will be spent
      by Party A.

    5.6
      The
      funds of this project applied by Party B will be used by Party B

    5.7
      If
      the funds which will be used only in the inner or international clinical trials
      are applied mainly by Party B and assisted by Party A, Party A will pay the
      clinical trial fees to Party B according to the schedule as agreed before,
      but
      the total sum will not be over RMB 4 millions. If the sum of international
      research funds is less than 4 millions, Party A will pay Party B the actual
      money that enters into Party B’ account. If there are still some of the abroad
      research funds left when the clinical trials are finished, the left funds will
      be used by Party B. The above money will be paid within 5 working days after
      the
      money enters into Party A’s account.

    5.8
      The
      money listed in items ‘5.5, 5.6 and 5.7’ is not limited by the transfer fee of
      the Agreement.

    5.9
      Party
      B has the right to use the research documents for the acceptances and summaries
      of the funds.

    5.10
      Party B will be listed in prior to Party A on the applications of the research
      achievements related to this project.

    5.11
      The
      execution of this contract will be terminated spontaneously upon the both
      parties have executed their responsibilities written in the sections in this
      contract and the Party A has paid all the technical transfer fees.

    


    6.
      Confidentiality of the technical data and information

    During
      the course of this contract, Wanxing and SMMU should not solely disclose the
      technical data and information relevant to this project to third party in any
      name or in any manner, or transfer this project to third party, or collaborate
      with third party to research the malaria vaccine based on this project for
      the
      profit purposes.

    


    7.
      Risk Liability and Breach Liability

    7.1
      Each
      party shall not be responsible to the other collaborative party for failing
      of
      new drug application due to the force majeure.

    7.2
      In
      the event of insufficient technological performance of Party A, the preclinical
      studies and the clinical trials could not be gone ahead normally, this contract
      will be terminated immediately just after the confirmation of Shanghai
      Arbitration Committee. The transfer tees paid by Party A to Party B will not
      reimbursed.

    7.3
      In
      the events that the technical indices could not meet with the applicable
      requirements as the scientific and technological causes, either party has no
      responsibility on this aspect. Either party will rework the experiments and
      then
      renew the application. This contract is still effective in the course of
      renewing the application till to the success. The cost and expense for the
      rework will be resolved by the mutual negotiation. 

    7.4
      If
      Party A could not pay for the outlay in due course, or the preclinical studies
      or clinical trials could not be conducted normally due to the financial shortage
      in the company, this contract will be terminated spontaneously. The transfer
      tees paid by Party A to Party B will not reimbursed.

     

    
      
         

      

      
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    7.5
      Neither party shall deliberately disclose the information about the “Malarial
      Vaccine” strain or the manufacture techniques to third party, or engage in the
      benefit activities using the relevant techniques with the third party. If so,
      such behavior is regard as breach action.

    7.6
      During the executive course of the contract, each party has the right to claim
      the compensation if the other party has the breach action. The compensation
      shall be as large as the contract price if the breach is serious and causing
      the
      heavy loss.

    


    8.
      Dispute and resolution 

    Any
      dispute relating to the execution of this contract shall, unless amicably and
      genuinely settled, be subject to conciliation. In the event of failure of the
      latter, the dispute shall be settled by the litigation in the corresponding
      court of the signature place.

    


    9.
      The parties will renegotiate the terms and conditions of this contract to
      resolve any inequities.

    


    10.
      This contract will be executed in four counterparts, each party shares two
      counterparts. The contract shall be in force from the date it has been signed
      and stamped by both parties, and Party B receives the first milestone payment
      while Party A receives the expressive strain.

    


    


    Party
      A: Shanghai Wanxing Bio-Pharmaceuticals 

    Representative:
      Banjun Yang

     

    Date:
      March 22, 2001

    


    


    


    Party
      B: Second Military Medical University,PLA

    Representative:
      Xueping Yin

    


    Date:
      March 22, 2001

     

     

    

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