ex10-60.htm


    
      

    

    
      Exhibit 10.60 

    

     

    Research
and Development Contract

    


    Party A:
Sanming Huajian Bioengineering Co., Ltd.

    Party B:
Fudan University

    


    The
Parties have, following amicable consultation, entered into this Contract on the
development of technologies for extracting high-purity solanesol, and its
downstream products nicotine, coenzyme Q10 and organic fertilizers, in
accordance with the Contract
Law of the People’s Republic of China. The Parties agree as
follows:

    


    
      	
              I.  

            	
              Project
      Description: Contents, Form and
Requirements

            


    

    This
project involves the development of technologies for extracting high-purity
solanesol, and its downstream products nicotine, coenzyme Q10 and organic
fertilizers. Solanesol is a compound extracted from scrap tobacco for
synthesizing coenzyme Q10 and other compounds. Party A intends to use the
techniques to be developed by Party B, namely the techniques for extracting two
solanesol of different purities (75% and 90% respectively) and nicotine,
synthesizing coenzyme Q10 with solanesol, and manufacturing of organic
fertilizers with scrap tobacco, in order to realize green production. It is
envisaged that Party A’s annual output of solanesol, nicotine, coenzyme Q10 and
organic fertilizers will amount to 50, 1,000, 20 and 20,000 tons respectively,
representing an annual revenue of some 500 million yuan, and that Party A can
also manufacturing nicotine with a purity of over 95%.

    


    
      	
              II.  

            	
              Party
      A’s Rights and Obligations

            


    

    
      	 
      	
              (1)

            	
              Party
      A shall provide Party B with an initial technical service fee of 1.8
      million yuan for the clean extraction of high purity solanesol and
      complete transfer of the patent, and 800,000 yuan annually thereafter as
      the service fee for development of downstream products and coenzyme
      Q10.

            
	 
      	
              (2)

            	
              The
      ownership to the patent right (including other related patents being
      applied) of clean extraction of high purity solanesol shall be vested in
      both Parties.

            
	 
      	
              (3)

            	
              Both
      Parties shall have access to the patent right of clean extraction of high
      purity solanesol, regardless of time or space factors. Without the prior
      approval of Party A, Party B shall not transfer the said patent to any
      third party.

            
	 
      	
              (4)

            	
              Party
      A shall be the solely eligible for the application and ownership of any
      patent rights for any follow-up modifications of the said refining
      technique.

            
	 
      	
              (5)

            	
              Party
      A shall be the solely eligible for the application of patent rights for
      and the ownership of downstream products, including nicotine, coenzyme
      Q10, and organic fertilizers.

            


    

     

    
      
        	
                III.  

              	
                Party
      B’s Rights and Obligations

              


      

      
      

      
      

      
      

      
      

      
      

      
      

      
      

      
      

      
        
          	 
      	
                  (1)

                	
                  Party
      B shall provide Party A with the following technical data within seven (7)
      business days following the receipt of technical service fees: 1)
      documents related to the development of clean extraction of high-purity,
      including work plan, plain layout of the factory, device purchase list,
      personnel training and trial production plans, and the plan for a two-week
      internship of inspection personnel in the Environmental Science and
      Engineering Task Force; 2) list of equipment used for extraction of
      low-purity and high-purity solanesol and manufacturing of intermediate
      products; and 3) the work flow
chart.

                


        

         

        
          
             


          

          
             


            
              

            

          

          
             


          

        

         

        	 
      	
                (2)

              	
                During
      the performance hereof, Party B shall provide Party A with the following
      technical guidance and services:

              
	 
      	 
      	
                --Technical
      support: Party B shall conclude the development of techniques for
      extracting solanesol of different purity (15%, 75% and 90% respectively),
      manufacturing of nicotine sulphate, nicotine with a purity of 95% and
      fertilizers, and synthesizing coenzyme Q10;

              
	 
      	 
      	
                --Frequency
      of technical support: Party B shall send special personnel to provide
      guidance on site within three business days, as
  necessary.

              
	 
      	 
      	
                --Duration
      of technical support: commencing on the date the project is implemented,
      and lasting till the final products are verified
  qualified.

              
	 
      	 
      	
                --Contemplated
      outcome: after applying the techniques, Party A’s annual output of 90%
      purity solanesol, nicotine sulphate, organic fertilizers and coenzyme Q10
      will amount to 50, 1,000, 20,000, and 20 tons respectively; and Party A’s
      manufacturing process will be greener and conforming to environmental
      protection standards.

              
	 
      	
                (3)

              	
                Party
      B shall ensure the practicability, reliability and stability of the
      technique that it develops, and that Party A can achieve the pre-set
      production capacity target with the equipment that it purchases
      itself.

              
	 
      	
                (4)

              	
                Party
      B shall help Party A with the sales of at least 90% of the solanesol,
      nicotine sulphate, coenzymeQ10, organic fertilizers, at prices of the
      same-breed products available in the domestic
  market.

              


      

    

     

    
      	
              IV.  

            	
              Technical
      indicators and parameters

            


    

    
      
        	 
      	
                1.

              	
                With
      sufficient supply of raw materials, the annual output of solanesol,
      nicotine sulphate, organic fertilizers and coenzyme Q10 shall amount to
      50, 1,000, 20,000 and 20 tons respectively.

              
	 
      	
                2.

              	
                The
      purity of solanesol shall be over 90.0%, with other indicators meeting
      requirements f the international market; the nicotinecontent of nicotine
      sulphate shall be over 40%; the  organic fertilizers shall
      conform to the national standard; andcoenzymeQ10 shall meet the standard
      of the 2005
      Pharmacopoeia of People’s Republic of China.

              
	 
      	
                3.

              	
                The
      technique shall be green and clean enough to meet environmental protection
      requirements.

              


      

    

    


    
      	
              V.  

            	
              R&D
      Plan

            


    

    
      
        	 
      	Following
      receipt of project payment, Party B shall
	 
      	(1)
      Complete
      purchase, debugging, and commissioning of research equipment within 3
      months;
	 
      	(2)
      Complete
      the test for mass production of solanesol products and successful
      manufacture such products with a purity of over 90% and organic
      fertilizers that meet national standards within 6
  month;


      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
       

      
        	 
      	
                (3)
      Complete the test for mass production of nicotine sulphate and successful
      manufacture such product with a purity rate of 40% within 12-18
      months;

              
	 
      	
                (4)
      Complete the test for mass production of coenzyme Q10 within 3
      years;

              
	 
      	
                (5)
      Expand the scale of research following the mass production test, to
      deliver on the expected output; and

              
	 
      	
                (6)
      Optimize the production technique so as to improve the yield
      rate.

              


      

       

    

    
      	
              VI.  

            	
              Settlement
      of R&D Budget, Remuneration and Other
  Payments

            


    

    
      
        	 
      	
                1.

              	
                Definition:

              
	 
      	 
      	
                R&D
      budget refers to the costs needed for completing the research project;
      while remuneration refers to the compensation to the research personnel
      for their research in the project.

              
	 
      	 
      	
                The
      R&D budget and remuneration for this research project is 1.8 million yuan.

              
	 
      	
                2.

              	
                Payment
      of R&D budget and remuneration

              
	 
      	 
      	
                The
      total amount of 1.8 million yuan for transfer of the solanesol technique
      and the patent shall be settled in two phases: 1.2 million yuan within
      seven (7) business days following the execution hereof, and the remaining
      600,000 yuan following the completion of the first batch of
      products.

              
	 
      	 
      	
                Party
      A shall pay Party B 800,000 yuan annually in two stages for the research
      and development of downstream products, namely nicotine sulphate,
      coenzymeQ10 and organic
fertilizers.

              


      

       

    

    
      	
              VII.  

            	
              Ownership
      of Devices and Apparatuses Purchased with R&D Budget and
      Research-Related Data

            


    

    The
ownership shall be vested in Party A, while Party A shall be entitled to use
them.

    


    
      	
              VIII.  

            	
              Term
      and Content of Cooperation

            


    

    The term
hereof shall commence on July 28, 2005 and end on July 27, 2010. The Parties
shall cooperate in the research and development of on-site production technique,
and in production.

    


    
      	
              IX.  

            	
              Confidentiality

            


    

    Both
Parties shall be responsible for keeping the project-relation information
confidential.

    


    
      	
              X.  

            	
              Risk
      Sharing

            


    

    The
Parties shall share on a 50/50 basis the risks of any losses and damages
resulting from failure of the project, in whole or part, due to technical
restrictions or difficulties.

    


    
      	
              XI.  

            	
              Acceptance
      Standard

            


    

    The
research outcomes will be confirmed qualified only when meeting the technical
standards and passing the test of real-time production.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
              XII.  

            	
              Breach
      of Contract

            


    

    
      
        	 
      	
                Either
      Party in breach hereof shall be liable for a liquidated damage in
      accordance with applicable provisions of the Contract Law of the People’s
      Republic of China.

              
	 
      	
                (1)

              	
                In
      the event of breaching Article VI hereof, Party A shall be held liable for
      compensation of part of the technique development
costs.

              
	 
      	
                (2)

              	
                In
      the event of breaching Article I hereof, Party B shall return or part of
      all of the development fees.

              
	 
      	
                (3)

              	
                In
      the event of breaching Article IX hereof, Party B shall return the R&D
      budget and be held liable for a liquidated damage of 200,000
      yuan.

              


      

       

    

    
    

    
    

    
    

    
      	
              XIII.  

            	
              Settlement
      of Disputes

            


    

    The
Parties shall settle through consultation any dispute arising from performance
hereof. In the event that the consultation fails, either Party may submit the
dispute to its local people’s court for settlement.

    


    
      	
              XIV.  

            	
              Definitions
      of terms

            


    

    solanesol:
an organic compound that naturally occur in tobacco;

    nicotine
sulphate an alkaloid that represents the biggest component of
tobacco;

    coenzymeQ10:
an adjunctive drug for curing cardiovascular diseases.

    Clean
Production Technologies: technologies that cause no pollution of emission of
hazardous substances when applied in production.

     

    
      	
              XV.  

            	
              Miscellaneous

            


    

    The
Parties shall settle through consultation other matters not mentioned herein,
including the rights and obligations of any intermediaries, service costs and
method of payment, deposits, property mortgage, warranty, among other
things.

    


    Party
A: Sanming Huajian Bioengineering Co., Ltd.

    Legal
representative:  Zhao Min

    Agency:

    Contact
(attn.): Zhao Min

    Date:

    Address:

    Telephone:

    Bank:

    Bank
a/c.:

    


    Party
B: Fudan University

    Legal
representative:

    Agency:
Chen Xiaoman

    Contact
(attn.): Chen Jianmin

    Date:

    Address:
220 Handan Road, Shanghai

    Telephone:
021-65642521

    Bank:
Agricultural Bank, Wujiaochang Branch

    Bank
a/c.: 033267- 08017003441

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Supplemental
Agreement

    


    Party A:
Sanming Huajian Bioengineering Co., Ltd.

    Party B:
Fudan University

    


    In
accordance with the Article VI (2) of the Contract on the development of
technologies for extracting high-purity solanesol, and its downstream products
nicotine, coenzyme Q10 and organic fertilizers, entered into on July 28, 2005,
Party A shall settle the 600,000 yuan for technique development with Party B.
Now, following amicable consultation, the Parties hereby decide to apply for the
funding from the special fund for Shanghai Plan for Digestion of Introduced
Technology and Innovation set up by Shanghai Economic and Trade Commission. The
support funding obtained from the Fund, worth 600,000 yuan, is used to offset
the amount payable to Party B and transferred to the bank account of Fudan
University for the purpose of research in support of Party A’s project. Party B
confirms the receipt of the amount on June 23, 2006 and deems it as having paid
off the technique development costs.

    


    This
supplemental agreement shall be have the same legal binding force as the
Contract, and shall enter into force upon execution by the Parties.

     

    
      	Party A: Sanming
      Huajian Bioengineering Co., Ltd. 	Party B: Fudan
      University 
	Date: June 29,
      2008	Date: June 29,
      2008