Exclusive Consulting And Services Agreement


               Exclusive Consulting And Services Agreement

 

                        (English Version)




This Exclusive Consulting and Services Agreement (the "Agreement") is 

entered into as of December 20, 2006, between the following two parties:

 

PARTY A: Longdan International Inc.

Legal Address: Renaissance Trust Ltd, Solomon Building, P. O. Box 636, 

Main Street, Charlestown, Nevis.  




PARTY B: Hubei Longdan Biological Medicine Technology Co. Ltd.

Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road, 

Wuchang District, Wuhan, Hubei, China, 430070                  




WHEREAS, Party A is a business company incorporated under the laws of 

Nevis, and owns resources to provide business consulting and related 

services;

  

WHEREAS, Party B is a company with exclusively domestic capital 

registered in the People's Republic of China, and is engaged in the 

business of Chinese medicine development, manufacturing, sale, and 

pharmacy management distribution network;




WHEREAS, Party A desires to be the provider of business consulting and 

related services to Party B, and Party B hereby agrees to accept such 

business consulting and related services;




WHEREAS, Party A has established a business relationship with Party B 

by entering into an Operating Agreement dated as of the same date 

hereof ("Operating Agreement");




NOW THEREFORE, Party A and Part B through negotiations hereby agree as 

follows:







1.     Business Consulting and Services Exclusively:




      1.1 During the term of this Agreement, Party A agrees to act as 

the exclusive business consulting and services provider of Party B. 

Party A provides the exclusive business consulting and related services 

on general business operation of Party B, such as:




      (a) Advice and assistance of the variously strategical business 

plans;




      (b) To provide consulting and related services on management, and 

marketing;




      (c) Advice of the plan of the research and development of the new 

Chinese medicines; 




      (d) Advice of the plan of the improvement and innovation of the 

medicine manufacturing and testing methods;




      (e) Advice on the strategically planning, improvement, 

consolidation, and acquisition of the pharmaceutical wholesale business; 




      (f) Advice on the establishment and expansion of the pharmacy 

management distribution network;




      (g) Advice on the budget planning; 




      (h) Advice on the recruiting, relocation, or training of the 

managers, and staffs;




      (i) Advice on the employment contracts, and payroll administration.

    

      1.2 Party B hereby agrees to accept such business consulting and 

related services. Party B also agrees that, during the term of this 

Agreement, it shall not utilize any third party to provide such 

business consulting and related services without the prior written 

consent by Party A.

     

      1.3 Party A shall be the sole and exclusive owner of all 

intellectual property rights created or discovered by Party A, or Party 

B based on Party A's services under this Agreement. This intellectual 

property rights should include, but not limited to, patents, know-how, 

trademarks, any trade secrets, copyrights, special methods and 

processes, identified materials, research and technical documents.




2.    Consulting and Services Fees:

   

      2.1 Unless otherwise agreed by the both Parties, Party B shall pay 

to Party A the Consulting and Services Fees annually during the term of 

this Agreement. The Consulting and Services Fees equal to Party B's net 

profits of every year, as being defined as the revenues of the year 

after deduction of operating costs, selling expenses, general and 

administration expenses, interests expenses and taxes. If one year's 

net profit is zero, Party B's payment for the Consulting and Services 

Fees in that year is zero; if Party B suffers losses in one year, all 

such losses will be carried over to the successive year and deducted 

from the successive year's Consulting and Services Fees. Party B shall 

pay the Consulting and Services Fees based on the yearly financial 

statements. Party B shall make the yearly payment within 30 days after 

the issuance of the financial statements to Party A. The Consulting and 

Services Fees shall be paid in RMB deposited by Party B to the bank 

account designated by Party A, and Party A should issue legal invoice 

to Party B.




      2.2 If Party B fails to pay all or any part of the Consulting and 

Service Fees due to Party A in RMB under the above-mentioned Article 

2.1 within the time period stipulated, Party B shall pay to Party A 

interest in RMB on the amount overdue based on the three (3) month 

lending rate for RMB announced by the Bank of China on the associated 

due date.

     

      2.3 Taxes and expenses arising out of the execution and 

implementation of this Agreement shall be borne by Parties 

respectively. 




3.    Indemnity




      Party B shall indemnify Party A against all expenses, including 

attorney's fees, judgments, penalties, and fine, arising out of any 

litigation, claim or other jurisdictional procedure against Party A 

resulting from the performance of the Exclusive Consulting and Services 

Agreement for Party B. The Article of Indemnity shall survive even 

after the termination or expiration of this Agreement.

      

4.    Effective Date And Term

   

     This Agreement shall come into effect as of the date first present 

above. The term of this Agreement is ten (10) years, and shall be 

automatically renewed for additional ten (10) year period upon the 

initial expiration of the initial term hereof or any renewal term, 

except earlier termination happens any time as set forth in Article 5 

of this Agreement.

 

5.    Termination

     

      During the initial or any renewal term of this Agreement, Party B 

shall not elect to terminate this Agreement. Notwithstanding the above 

stipulation, Party A shall have the right to terminate this Agreement 

with or without any reason at any time by definitely giving Party B a 

written notice thirty days prior to the termination.

 

6.

Force Majeure




      Force Majeure means any event that is beyond the party's 

reasonable control and cannot be prevented with reasonable care, such 

as the acts of nature: earthquake, flood, typhoon, fire, explosion, and 

acts of governments, war, and acts of terrorism or other civil unrest 

means. If a Force Majeure event exists and affects the performance of 

this Agreement, the affected party shall immediately notify the other 

party by means of telegraph, e-mail or other electronic forms, and 

shall furnish sufficient evidence in writing of the occurrence of the 

Force Majeure event within twenty (20) calendar days thereafter. 

According to the impact of the Force Majeure on the performance of this 

Agreement, the Parties determine whether to release this Agreement. 

After the event of Force Majeure is removed, both parties agree to 

resume performance of this Agreement with their best efforts.  




7.

Language




     This Agreement is written in both Chinese and English, and 

executed in English only, and the executed English language Agreement 

shall prevail in all cases. This Agreement is executed in two originals 

and each Party holds one original. Each original has the same legal 

effect. 

   

8. This Agreement shall be governed by, and construed in 

accordance with the laws of the People's Republic of China.




9.    Settlement of Dispute

   

      The parties shall strive to settle any dispute arising from, out 

of or in connection with the interpretation or performance of this 

Agreement through friendly negotiation. In case no settlement can be 

reached through negotiation within six months, each party can submit 

such matter to China International Economic and Trade Arbitration 

Commission (the "CIETAC"). The arbitration shall follow the current 

rules of CIETAC. The arbitration award shall be final and binding upon 

the parties and shall be enforceable in accordance with its terms.

     

10.   Amendments and Supplementary Agreements 




     Parties may negotiate and enter any amendments of this Agreement, 

or supplementary agreements on matters not agreed upon herein. Any 

amendments of this Agreement, or supplementary agreements shall be 

valid only when made in writing and signed by both parties. Any 

amendments of this Agreement, or supplementary contracts have equal 

effect as this Agreement.

      

11.   Without the prior written approval of Party A, Party B shall 

not assign this Agreement, in part or in whole, to any third party.

   

12.   Capable of Severing 




     Any of the provisions of this Agreement will be deemed as capable 

of severing in the jurisdiction where it conflicts with the laws in 

such jurisdiction. The invalid or unenforceable effect of such 

provision in one jurisdiction should not be affected that in other 

jurisdictions.







( A Signature Page Follows )







































































































                        Signature Page

 

IN WITNESS WHEREOF the Part A and Part B hereto have caused this 

Agreement to be duly executed on their behalf by a duly authorized 

representative as of the date first written above.




Party A:  Longdan International Inc.

          

By: /s/ Zhilin Zhang 

Zhilin Zhang

Chairman







Party B: Hubei Longdan Biological Medicine Technology Co. Ltd.

          

By: /s/ Zhilin Zhang 

Zhilin Zhang

Chairman