Document:

ex10-2.htm

     

    Exhibit
10.2

     

    AMERICAN
EQUITY INVESTMENT

    1996
STOCK OPTION PLAN

     

    (Amended
December 29, 2008)

     

    WHEREAS,
the Board of Directors of the Company deems it in the best interest of the
Company that certain employees and officers of the Company and its Subsidiary be
given an opportunity to acquire an interest in the operation and growth of the
Company as a means of assuring their maximum effort and continued association
with the Company; and

     

    WHEREAS,
the Board believes that the Company can best obtain these and other benefits by
granting incentive or nonqualified stock options to employees and officers
designated from time to time, pursuant to this Plan; and

     

    WHEREAS,
the Board has determined to grant certain directors of the Company compensation
in the form of nonqualified stock options pursuant to separate provisions within
this Plan;

     

    NOW,
THEREFORE, the Board does hereby adopt this Stock Option Plan, subject to
approval, within twelve (12) months of the date of adoption, by at least a
majority of the shares voting at a shareholder's meeting, and subject to any
necessary authorizations from any governmental authority.

     

    ARTICLE I

     

    GENERAL

     

    1.01    
Purpose. American Equity Investment 1996 Stock
Option Plan (the "Plan") is intended to advance the interests of American Equity
Investment Life Holding Company (the "Company"), its shareholders and its
Subsidiary by encouraging and enabling selected employees and officers upon whose judgment, initiative
and effort the Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the Company by
ownership of its stock. The Plan also contains separate provisions under which directors are entitled to
acquire stock ownership through options granted on a formula
basis.

     

    1.02    
Definitions.

     

    (a)         "Board" means the Board of Directors of
the Company.

     

    (b)         "Code" shall mean the Internal Revenue
Code of 1986, as amended.

     

    (c)         "Committee" means the body administering the
Plan.

     

    (d)         "Common Stock" means shares of common
stock, $1 par value, of the Company.

     

    (e)         "Date of Grant" means the date on which
an option is granted under the Plan.

     

    (f)         "Incentive Stock Option" means an option
granted under Article II of the Plan. Incentive Stock Options granted
under the Plan are intended to be options which meet the requirements of Section
422A of the Internal Revenue Code of 1986 (the "Code"), as
amended.

     

    (g)         "Option" means any option granted under
the Plan.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)         "Optionee" means a person to whom an Option, which has
not expired, has been granted under the Plan.

     

    (i)         "Participant" means a person to whom one
or more Options have been granted that have not been forfeited or terminated
under the Plan.

     

    (j)         "Nonqualified Stock Option" means an
option granted under
Article III of the Plan.

     

    (k)         "Subsidiary" or "Subsidiaries" means a
subsidiary corporation or corporations of the Company as defined in Section 424
of the Code.

     

    (l)         All personal pronouns used herein are
intended to be gender
neutral.

     

    1.03     Administration of Plan.

     

    (a)         The Plan shall be administered by the
Board, if all members of the Board are disinterested persons, as hereinafter
defined, or by a Committee of two or more members of the Board, each of whom is
a disinterested person. If the Plan is administered by a Committee, it shall report all
action taken by it to the Board. The Committee shall have full and final
authority in its discretion, subject to the provisions of the Plan, to determine
the individuals to whom and the time or times at which Options shall be granted; to determine the
number of shares and the purchase price of the Common Stock covered by each such
Option; to construe and interpret the Plan; to determine the terms and
provisions of the Option agreements, which need not be identical, including, but without limitation, the
time and manner in which each Option shall be exercisable, and the terms
covering the payment of the Option price; and to make all other determinations
and take all other actions deemed necessary or advisable for the proper administration of the Plan. All
such actions and determinations shall be conclusively binding for all purposes
and upon all persons.

     

    (b)         For purposes of this Agreement, the term
"disinterested person" shall mean a member of the Board who was not, during
the one-year period prior
to service as an administrator of the Plan, or during such service, granted or
awarded equity securities pursuant to the Plan or any other plan of the Company,
or any of its affiliates, except that:

     

    (i)     
 participation in a formula
plan meeting the conditions
of Rule 16b-3(c)(2)(ii) (formula awards) promulgated by the Securities and
Exchange Commission ("SEC") shall not disqualify a director from being a
disinterested person;

     

    (ii)      participation in an ongoing securities
acquisition plan meeting
the conditions of Rule 16b-3(d)(2)(i) (thrift and savings plans) shall not
disqualify a director from being a disinterested person;

     

    (iii)     an election to receive an annual
retainer fee either in cash or in an equivalent amount of securities, or partly
in cash and partly in
securities, shall not disqualify a director from being a disinterested
person;

     

    (iv)     administering another plan that does not
permit participation by members of the Board shall not disqualify a director
from administering this Plan.

     

    The
foregoing definition of a "disinterested person" is intended to comply with the
requirements of Rule 16b-3(c)(2) and shall be deemed automatically amended to
comply with any changes in such Rule which may hereafter be adopted by the
SEC.

     

     

    
      
        
        

      

      
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    (c)         Administration of the Plan by
the Committee is applicable
only to grants and awards of Options made pursuant to Articles II and III below.
Directors who are not otherwise employed by the Company are not entitled to
participate in grants and awards made under such Articles.

     

    1.04     Stock Subject to Options. The maximum number of
shares of Common Stock which may be issued upon the exercise of Options granted
under the Plan shall be 400,000, subject to adjustment under the provisions of
Section 5.03. The shares of Common Stock to be issued upon the exercise of Options may be authorized
but unissued shares, shares issued and reacquired by the Company or shares
bought on the market for the purposes of the Plan. In the event any Option
shall, for any reason, terminate or expire or be surrendered without having been exercised in full, the
shares subject to such Option but not purchased thereunder shall again be
available for Options to be granted under the Plan.

     

    1.05    
Participants. Except with respect
to Directors Options granted pursuant to Article IV below, Participants in the Plan shall be
selected by the Committee from the officers and other key employees of the
Company and/or its Subsidiaries who occupy responsible managerial or
professional positions and who have the capability of making a substantial
contribution to the success of the
Company. In making this selection and in determining the form and amount of
awards, the Committee shall consider any factors deemed relevant, including the
individual's functions, responsibilities, value of services to the Company in the past and potential
contributions to the Company's profitability and sound growth. The Committee's
determinations under the Plan (including without limitation determinations of
the persons to receive awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing same) need not be uniform and may be
made by it selectively among persons who receive or are eligible to receive
awards under the Plan whether or not such persons are similarly situated.

     

    1.06     Types of Awards under Plan. Awards under
the Plan may be in the form of any one or more of the
following:

     

    (a)         Incentive Stock Options as described in
Article II;

     

    (b)         Nonqualified Stock Options as described
in Article III;

     

    The
formula grant of Options to Directors under Article IV shall be treated as a
separate part of this Plan.

     

    ARTICLE II

     

    INCENTIVE STOCK
OPTIONS

     

    2.01     Award of Incentive Stock Options. The
Committee may, from time to time and subject to the provisions of the Plan and
such other terms and conditions as the Committee may prescribe, grant to
any Participant in the Plan one or more Incentive Stock Options (intended to
qualify as such under the provisions of Section 422A of the Code) to purchase
the number of shares of Common Stock designated in the Options allotted by the Committee. Any Option
granted pursuant to this Article II shall be designated as an "Incentive Stock
Option."

     

    2.02     Terms and Conditions of Incentive Stock
Options. Any Incentive Stock Option granted under the Plan shall be evidenced by
an agreement executed by
the Company and the applicable employee and shall contain such terms and be in
such form as the Committee may from time to time approve, subject to the
following limitations and conditions:

     

    (a)         Option Price. The option price per share
with respect to each
Incentive Stock Option shall be determined by the Committee but shall in no
instance be less than 100% of the fair market value of a share of Common Stock
on the Date of Grant and shall be paid in either cash or Common Stock. For the
purpose hereof, fair market value shall be the
last sale price on any national exchange or 

     

     

    
      
        
        

      

      
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    quotation system on the Date of Grant
or, if the shares are not so traded, a similar measure of value as may be
determined by the Committee in its sole discretion.

     

    (b)         Exercise of Options. An Option shall be exercised
by a Participant by giving written notification to the Secretary of the Company
(or other person designated by the Committee to receive such notice) of the
Participant's exercise of such Option. Such notice shall specify the number of shares and the Date of
Grant of the Option being exercised.

     

    (c)         Option Term. Options may be granted for
a ten (10) year term. Each Option may be exercisable from time to time over a
period commencing six (6) months after the Date of Grant and ending ten (10) years after the Date of
Grant.

     

    (d)         Limitation on Exercise of Options. No
Option may be exercised for less than ten (10) shares, subject to adjustment
under Section 5.03. The aggregate fair market value (determined as of the time
the Option is granted) of
all shares of Common Stock which may be acquired upon the exercise of Options
which first become exercisable in any calendar year pursuant to the terms of an
Incentive Stock Option granted to an Optionee under the Plan or any other
incentive stock option plan of the Company, shall
not exceed $100,000, as set forth in §422A of the Code, as amended. In
addition, the Committee may, in its discretion, set additional restrictions with
respect to the exercise of Options.

     

    (e)         Nontransferability of
Options. No Option shall be
transferable or assignable by an Optionee, otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code. Each Option shall be exercisable, during the
Optionee's lifetime, only by the Optionee, his
guardian or legal representative. No Option shall be pledged or hypothecated in
any way and no Option shall be subject to execution, attachment or similar
process except with the express consent of the Committee.

     

    (f)         Termination of Employment. Unless otherwise
determined by the Committee, upon termination of an Optionee's employment with
the Company, or the relevant Subsidiary, his or her Option privileges shall be
limited to the shares purchasable by him or her as of the date that his or her employment was
terminated, and such Option privileges shall expire sixty (60) days from the
date that his or her employment was terminated. Nothing contained herein shall
be construed to extend the ultimate term of the Option beyond the period of time as set out above in
Section 2.02(c).

     

    (g)         Disability or Death of Optionee. If an
Optionee's employment with the Company is terminated because of his death or
disability, his Option privileges shall expire unless exercised within one (1)
year after the date that
his employment was terminated. In the event of the death of the Optionee, his
Options may be exercised by the Optionee's designated beneficiary. Nothing
contained herein shall be construed to extend the ultimate term of the Option
beyond the period of time as set out above in
Section 2.02(c).

     

     

    ARTICLE III

     

    NONQUALIFIED STOCK
OPTIONS

     

    3.01     Award of Nonqualified Stock Options. The
Committee may, from time to time, and subject to the provisions of the Plan, and
such other terms and conditions as the Committee may prescribe, grant to any Participant
in the Plan one or more Nonqualified Stock Options to purchase the number of
shares of Common Stock designated in the Options allotted by the Committee. Any
Option granted pursuant to this Article III shall be designated as a "Nonqualified Stock
Option."

     

    3.02    
Terms and Conditions of
Nonqualified Stock Options. Any Nonqualified Stock Option granted under the Plan
shall be evidenced by an agreement executed by the Company and the applicable
employee and shall contain such terms and be in such form as the Committee
may from time to time approve, subject to the following limitations and
conditions:

     

     

    
      
        
        

      

      
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    (a)         Option Price. The option price per share
with respect to each Option shall be determined by the Committee but shall in no
instance be less than 100%
of the fair market value of a share of Common Stock on the Date of Grant and
shall be paid in either cash or Common Stock. For the purpose hereof, fair
market value shall be the last sale price on any national exchange or quotation
system on the Date of Grant or, if the shares
are not so traded, a similar measure of value as may be determined by the
Committee in its sole discretion.

     

    (b)         Exercise of Options. An Option shall be
exercised by a Participant by giving written notification to the
Secretary of the Company
(or other person designated by the Committee to receive such notice) of the
Participant's exercise of such Option. Such notice shall specify the number of
shares and the Date of Grant of the Option being exercised.

     

    (c)         Option Term. Options may be granted for a ten (10) year
term. Each Option may be exercisable from time to time over a period commencing
six (6) months after the Date of Grant and ending ten (10) years after the Date
of Grant.

     

    (d)         Limitation on Exercise of Options. No
Option may be exercised for
less than ten (10) shares, subject to adjustment under Section 5.03. In
addition, the Committee may, in its discretion, set additional restrictions with
respect to the exercise of the Options.

     

    (e)         Nontransferability of Options. No Option
shall be transferable or
assignable by an Optionee, otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code. Each Option shall be exercisable, during the Optionee's lifetime,
only by the Optionee, his guardian or legal
representative. No Option shall be pledged or hypothecated in any way and no
Option shall be subject to execution, attachment or similar process except with
the express consent of the Committee.

     

    (f)         Termination of Employment. Unless otherwise determined by the
Committee, upon termination of an Optionee's employment with the Company, or the
relevant Subsidiary, his or her Option privileges shall be limited to the shares
purchasable by him or her as of the date that his or her employment was terminated, and such
Option privileges shall expire sixty (60) days from the date that his or her
employment was terminated. Nothing contained herein shall be construed to extend
the ultimate term of the Option beyond the period of time as set out above in Section
3.02(c).

     

    (g)         Disability or Death of Optionee. If an
Optionee's employment with the Company is terminated because of his death or
disability, his Option privileges shall expire unless exercised within one (1)
year after the date that his employment was terminated. In the
event of the death of the Optionee, his Options may be exercised by the
Optionee's designated beneficiary. Nothing contained herein shall be construed
to extend the ultimate term of the Option beyond the period of time as set out above in Section
3.02(c).

     

     

    ARTICLE IV

     

    DIRECTORS
OPTIONS

     

    4.01     Grant of Options to Directors. Any
person who is a Director of the Company but not also an employee of the Company
shall be entitled to receive a grant of nonqualified stock options for -0-
shares of Common Stock per
year, subject to adjustment under Section 5.03. Each grant of such Options shall
be made on the first business day of the month following the month in which the
Company's Annual Meeting of Stockholders is held.

     

    4.02     Terms and Conditions of Options. Any Option granted under the Plan
shall be evidenced by an agreement executed by the Company and the applicable
Director and shall contain the following limitations and
conditions:

     

     

    
      
        
        

      

      
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    (a)         Option Price. The option price per share
with respect to each Option
shall be the fair market value of a share of the Common stock on the Date of
Grant and shall be paid in either cash or Common Stock. For the purpose hereof,
fair market value shall be the last sale price on any national exchange or
quotation system on the Date of Grant or, if not so traded, a
similar measure of value as determined by the Committee in its sole
discretion.

     

    (b)         Option Term. Options may be granted for
a ten (10) year term. Each Option may be exercisable from time to time over a
period commencing six (6)
months after the Date of Grant and ending ten (10) years after the Date of
Grant.

     

    (c)         Limitation on Exercise of Options. No
Option may be exercised for less than ten (10) shares.

     

    (d)         Nontransferability of Option. No Option
shall be transferable or assignable by an Optionee, otherwise than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code. Each Option shall be exercisable, during
the Optionee's lifetime, only by the Optionee, his guardian or legal representative. No Option
shall be pledged or hypothecated in any way and no Option shall be subject to
execution, attachment or similar process except with the express consent of the
Board.

     

    (e)         Termination of Directorship. Upon
termination of an Optionee's directorship with the Company
for any reason, including without limitation the Optionee's death or disability,
his Option privileges shall expire one (1) year from such date. In the event of
the death of the Optionee, his Options may be exercised by Optionee's designated beneficiary.
Nothing contained herein shall be construed to extend the ultimate term of the
Option beyond the period of time as set out above in Section
4.02(b).

     

     

    ARTICLE V

     

    MISCELLANEOUS

     

    5.01    
Acceleration of
Vesting.

     

    (a)         If an Option contains a vesting schedule or has not become totally
exercisable as of the date of any of the following events, such vesting schedule
may be accelerated, and/or any other restrictions to exercise may be removed
upon delivery to the Committee of a written election of such acceleration by the Optionee (or the
designated beneficiary of a deceased Optionee):

     

    (i)      The death of the
Optionee;

     

    (ii)      The disability of the
Optionee;

     

    (iii)     A "change of control" as hereinafter
defined.

     

    (b)         For purposes of this Agreement, a
"change in control" shall be deemed to have occurred on such date
if:

     

    (i)      any person, organization or association
of persons or organizations acting in concert, excluding affiliates of the
Company itself, shall acquire more than twenty percent (20%) of the outstanding
voting stock of the Company
in whole or in part by means of an offer made publicly to the holders of all or
substantially all of the outstanding shares of any one or more classes of the
voting securities of the Company to acquire such shares for cash, other property
or a combination thereof; or

     

     

    
      
        
        

      

      
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    (ii)      any person, organization or association
of persons or organizations acting in concert shall succeed in electing two or
more directors in any one election in opposition to those proposed by
management; or

     

    (iii)     the Company transfers all or
substantially all of its
operating properties and assets to another person, organization or association
of persons or organizations, excluding affiliates of the Company itself;
or

     

    (iv)     the Company shall consolidate with or
merge into any person, firm or corporation unless the Company or a Subsidiary
shall be the continuing corporation or the successor
corporation;

     

    5.02    
Individuals With More than 10%
Ownership. No Option will be granted to an individual who at the time of the
grant owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company.

     

    5.03     Adjustments.

     

    (a)         In the event that the outstanding shares
of Common Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares, reorganization, tender
offer or dividend or other distribution payable in capital stock,
appropriate adjustment shall be made by the
Committee in the number and kind of shares on which Options may be granted under
the Plan, including without limitation, the number of shares on which Options
are to be granted annually to Directors under Section 4.01. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which Options, or
portions thereof are then unexercised, to the end that the proportionate
interest of the holder of the Option shall, to the extent practicable, be maintained as before the
occurrence of such event. Such adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of the
Option but with a corresponding adjustment in the Option price per share.

     

    (b)         In the event of the dissolution or
liquidation of the Company, any Option granted under the Plan shall terminate as
of a date to be fixed by the Committee, provided that not less than thirty (30)
days written notice of the date so fixed shall be given to each Optionee and each such
person shall have the right during such period to exercise his Options as to all
or any part of the shares covered thereby including shares as to which such
Options would not otherwise be exercisable by reason of an insufficient lapse of
time.

     

    (c)         Adjustments and determinations under
this Section 5.03 shall be made by the Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof, shall be
final, binding and conclusive.

     

    5.04     Restrictions on Issuing Shares. The exercise of
each Option shall be subject to the condition that if at any time the Company
shall determine in its discretion that the satisfaction of withholding tax or
other withholding liabilities, or that the listing, registration or qualification of any securities
exchange or under any state or federal law, or that the consent or approval of
any regulatory body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares pursuant thereto, then in any such
event, such exercise shall not be effective unless such withholding, listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.

     

    5.05     Use of Proceeds. The proceeds received
by the Company from the sale of Common Stock pursuant to the exercise of Options
granted under the Plan shall be added to the Company's general funds and used
for general corporate purposes. If stock is received, it shall be held in the treasury and used
as the Company decides.

     

     

    
      
        
        

      

      
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    5.06     Right to Terminate Employment. Nothing
in the Plan or in any agreement entered into pursuant to the Plan shall confer
upon any Participant the right to continue in the employment of the
Company or to affect any
right which the Company may have to terminate the employment of such
Participant.

     

    5.07     Amendment, Suspension and Termination of
Plan. The Board may at any time suspend or terminate the Plan or may amend it
from time to time in such respects as the Board may deem advisable in order
that the Options granted thereunder may conform to any changes in the law or in
any other respect which the Board may deem to be in the best interests of the
Company; provided, however, that the Plan may not be amended more than once during any six-month
period, except if necessary to comply with the Code or ERISA, and that, without
approval by the shareholders of the Company representing a majority of the
voting power present at a duly called meeting, no such amendment shall (a) except as specified in
Section 5.03, increase or decrease the number of shares for which Options may be
granted under the Plan; (b) change the provisions of Section 1.05 relating to
whom may be granted Options; (c) change the provisions of Sections 1.02(a), 1.02(k), 2.02(a) and
3.02(a) relating to the establishment of the Option price; (d) change the
provisions of Sections 2.02(c) or 3.02(b) relating to the expiration date of
each Option; (e) change the provisions of this Section relating to
the term of this Plan, or (f) otherwise
materially increase the benefits accruing to Participants under the Plan. Unless
the Plan shall theretofore have been terminated by the Board, the Plan shall
terminate on the 18th day of January, 2006. No Option may be granted during any suspension or after
the termination of the Plan. No amendment, suspension, or termination of the
Plan shall, without a Participant's consent, alter or impair any of the rights
or obligations under any Option theretofore granted to such Participant under the
Plan.

     

    5.08     Cash or Property Bonus. The Board, in
its sole and absolute discretion, may at any time including but not limited to
the time of exercise, authorize a taxable cash or property bonus to be paid a
Participant who is not a Director. The amount of the bonus, if any, shall
be determined by the Board. The property transferred at exercise is subject to
Section 61 and Section 83 of the Code, as amended.

     

    5.09     Effective Date of Plan and Shareholder
Approval. The effective date of the Plan is the 18th day of January, 1996, the date of
its approval by the Board; however, if the Plan is not approved and ratified by
the shareholders of the Company within twelve (12) months from the date the Plan
was adopted and approved by the Board, the Plan shall terminate and any Options granted
thereunder shall be void and have no force or effect.

     

    Dated this 18th day of January,
1996.

    
    

     

    
      	 	 	
              By:   

            	/s/
      D.J. Noble	 
	 	 	 	D.J.
      Noble, President	 

    

     

     

    ATTEST:

     

    /s/ Wendy L.
Carlson                                           

     

     

     

     

     

     

     

     

     

     

     

     

    

     

    
      	
               8药品公司委托管理合同

Exhibit 10.9

Date: October 28, 2008 

Xi’an Qinba Pharmaceuticals Co., Ltd.

The shareholders of Xi’an Qinba Pharmaceuticals Co., Ltd.

and

Xi’an Pharmaceuticals Development Co., Ltd.

————————————————

Agreement on Entrustment for 

Operation and Management

———————————

Agreement on Entrustment for Operation and Management 

1

			
	 
	 

	1. Wang Guozho, a citizen of PRC with ID Card number 【[220182196302120058]

 

2. Zang Guiping, a citizen of PRC with ID Card number 【[370111196606022016]

 

3. Yan Weidong, a citizen of PRC with ID Card number 【[370104196812022910]

 

4. Zhang Yong, a citizen of PRC with ID Card number 【●[610404196907211075]

 

5. Xing Xiu’e, a citizen of PRC with ID Card number 【●[23102719440726502X]

 

6. Xu Yong, a citizen of PRC with ID Card number 【●】 [610104197007086115]

 

7. Wang Wei, a citizen of PRC with ID Card number 【●[152101196808080618]

 

8. Gao Xiling, a citizen of PRC with ID Card number 【●[610402195703122700]

 

9. Guo Chenglin, a citizen of PRC with ID Card number 【●[610403197110230058]

 

10. Wu Weiping, a citizen of PRC with ID Card number 【●[610403198202050067]

 

11. Bai Rong, a citizen of PRC with ID Card number 【●[62050319790316422X]

 

12. Wu Jin, a citizen of PRC with ID Card number 【●[610125198301140529]

 

13. Ding Zhibo, a citizen of PRC with ID Card number 【●[2310271972041055018]

 

14. Pu Feng, a citizen of PRC with ID Card number 【●[61040419700726052X]

15. Guan Zheng, a citizen of PRC an ID Car number  【●[9370111196701102030]

16 Yaing Airfang, a citizen of PRC and ID Car number 【[612621194610101027]

2

			

Party A: Xi’an Qinba Pharmaceuticals Co., Ltd. (the Commissioning Party)

Address: Jingwei 10 Rd., Xi’an Economy Technology Development Zone, Xi’an, Shaanxi

Legal Representative: Wang Guozhu 

Party B: Xi’an Pharmaceuticals Development Co., Ltd. (the Commissioned Party)

Address: Room C901, 16 Gaoxin 1 Rd., Xi’an High-tech Zone, Xi’an, Shaanxi

Legal Representative: Chen Ying

Whereas:

(1) Party A and Party B are both companies with limited liabilities incorporated under the Company Law of the People’s Republic of China;

(2) Party A is an enterprise engaged in manufacturing of [·] drugs and all of its shareholders holding all of the issued and outstanding shares of Party A;

(3) Party B is rich experienced in the management of drug manufacturing enterprise; 

(4) Party A desires to entrust the management of this enterprise to Party B and Party B desires to be entusted. 

Both parties reach on the following terms unanimously and sign on [·] 2008 through friendly negotiation: 

Article 1. Entrustment Matter

Party A agrees to exclusively entrust the operation and management of this company to Party B. Party B accepts such entrustment and perform its management right pursuant to the laws and this agreement until the expiration of the Term set forth in Article 5 and shall be fully responsible for the management of Party A..

Article 2. Scope of the Enstrusted Matter

The entrustment matter shall include

2.1 The operations of Party A which include the daily operation and management and outward affairs of Party A;

2.2 Recruitment and professional training of the management staff of Party A; 

2.3 Collecting pharmaceutical information and organizing source of raw materials; 

2.4 Choosing distributors for the sales of the pharmaceutical manufactured by Party A; 

2.5 Other matters in the daily operation and management of Party A.

2.6 The management of all of the cash flows of Party A through a bank account opened by Party A  

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which is controlled by Party B.

2.7 The decisions regarding the use of the funds in the bank account in which Party A shall deposit 

2.8 The control of all assets of Party A and the right to dispose of assets

2.9 Hire management and administrative personnel and control decisions relating to entering and performing customer contracts and other instruments. 

2.9 The right to appoint the composition of the board of directors of Party A 

Article 3. Obligations of Party A

3.1 respecting the management of Party B and not interfering with the management of Party B within the scope of this Agreement; 

3.2 having its shareholders to appoint directors, chairman of directors, vice chairman of directors and supervisor as nominated by Party B;

3.3 appointing general manager, vice general manager, financial chief and other senior management as nominated or designated by Party B;

3.4 the opening of a bank account which Party B shall have the full right to use in its discretion. All funds of Party A including all revenue and all payments of funds shall be disbursed through this account; 

3.5 paying management fee as agreed; 

3.6 without the written permit of Party B, not carrying out any transactions that may severely influence its assets, liabilities, shares and/or operation;

3.7 not entrusting any third party with the rights authorized to Party B within the term of this Agreement.

3.8 hand over to Party B for entrustment all business materials, business licenses and corporate seal 

3.9 assist Party B in obtaining funds for Party A if Party A is in need of funds

Article 4. Obligations of Party B 

4.1

notifying Party A in writing on the operation and management monthly, in order for Party A to know the operation of the company on time; 

4.2 nominating appropriate persons to serve as all directors, chairman, vice chairman, and supervisor of Party A;

4.3 nominating the person deemed appropriate to serve as the general manager of Party A; 

4.4 the general manager nominated by Party B shall, to meet the demand of operation and 

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management of Party A, designate competent persons to be served as vice general manager, financial chief and other senior officers of Party A.

4.5 manage Party A and dispose of its assets if it deems necessary and enjoy the profits of Party A as well as bear the losses of Party A.

4.6 assume all operation risks of the bank account and bear all losses.  

4.7 repay the debt of Party A if Party A does not have sufficient funds to repay its debt.

4.8 fund any capital deficits. 

4.9 provide any additional funds required by Party A to maintain its operations either through a bank loan or other resources. 

Article 5. Term

The term of the commission shall be from the effective date of this Agreement . 

until either the business of Party A terminates or Party B exercises its option to acquire all of the assets or equity of Party A under the terms of the exclusive option agreement amongst Party A, Party B and the Xi’an Pharmaceutical Shareholders  

Article 6. Calculation and Payment of Management Fees

6.1 Calculation of Management Fees

The management fee payable by Party A to Party B shall be calculated as 100% of the earnings before tax, paid on a monthly basis within 20 days of the end of each month.  If Party A has no earnings before taxes and other cash expenses, then no fee shall be paid.  If Party A sustains losses then each month the losses will be carried over to the next month and deducted from next month’s management fee. 

6.2 Payment of Management Fees

6.2.1 Party A shall pay annual royalty to Party B prior to [·] of each year within the effective period of this contract. 

6.2.2 Party A shall pay the aforesaid fees to Party B via transfer. Name, address and account of the bank of Party B: Name: Bank of Communications Xi’an Branch Nanshaomen  Subbranch

Address: No. 1 Nanguanzhengjie, Xi’an City, Shaanxi Province, P.R. China

Account: 611301054018010023376

6.2.3 Party B shall issue formal official invoice to Party A within 7 days following Party A’s every payment of contractual amount.

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Article 7. Breach Liabilities

7.1 Any Party’s breaching any terms, warrants and commitments of this Agreement shall constitute breach, and such party shall compensate the other for losses arising herefrom. 

7.2 Without the written consent of the other party, neither party shall terminate or postpone the performance of each obligation hereunder on its own. 

7.3 Unless otherwise provided by Chinese compulsory laws, Party B shall not bear any liabilities arising from the operation of Party A. 

Article 8. Tax

Both parties shall bear taxes arising from the exchange hereunder imposed by the Chinese government respectively.

Article 9. Confidentiality

9.1 “Confidential information”: technical materials, commercial information and other information marked as “interior material” disclosed by one party to the other during the performance of this contract.

9.2 Both parties warrant that they shall not use or disclose the confidential information of the other party for any other purposes other than this contract or to a third party. Both parties may use the confidential information of the other only for performing this contract.

9.3 Both parties agree that the disclosing party is the owner of the confidential information. Upon the termination or expiration of this contract, the receiving party shall promptly return all confidential information provided by the disclosing party or destroy all confidential information as requested by the disclosing party. 

9.4 Where the confidential information of one party is revealed due to the fault of the other party (including its employees), the faulty party shall compensate the other for all losses arising herefrom. 

9.5 Both parties agree that the term for the confidentiality obligation of both parties shall be the effective term of this contract and three years following the expiration of this contract; where this contract terminates in advance, such term shall be the period prior to the termination of this contract and three years following the termination.

9.6 This article constitutes independent confidentiality agreement. The obligations agreed in this Article shall survive the termination of this contract.

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Article 10. Contractual Relation

The parties concluding this Agreement are independent contracting parties. The execution of this Agreement does not mean that both parties establish a partnership enterprise or joint venture and both parties are not in an employment or agent relationship.

Article 11. Force Majeure

11.1 Where any party is unable to perform its obligation hereunder on the agreed conditions due to the event of force majeure, such party shall promptly notify the other of relevant circumstance, and provide effective certificate of force majeure within 15 days. 

11.2 The force majeure stated in this Agreement refers to any unpredictable, unavoidable and undefeatable objective circumstance, including but not limited to natural disaster, explosion, fire, flood, war, rebellion, riot, epidemic and administrative measures and orders. It is not force majuere where the company is punished, closed or suspending operation due to violation by Party B. 

11.3 The influencing party shall be exempted from relevant responsibilities within the influence of the force majeure.

11.4 Where the force majeure lasts for over 60 days, both parties shall settle the performance of this Agreement thereafter through friendly negotiation. Where negotiation fails within 10 days extended, both parties shall have the right to dissolve this Agreement. 

Article 12. Governing Law

The effectiveness, interpretation and performance of this Agreement shall be governed by the laws of the People’s Republic of China.

Article 13. Dispute Resolution

Any dispute arising from the performance of this Agreement shall be resolved through negotiation by both parties.  Where negotiation fails, any party is entitled to launch a lawsuit to the people’s court of jurisdiction. 

Article 14. Execution and Effectiveness

14.1 This Agreement is made in duplicate, with each party holding one, equally binding upon both parties. 

14.2 This Agreement is executed by the representative of both parties on the date first above written and comes into effect on such date. 

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In witness whereof, both parties execute this Agreement on the date first above written. 

Party A:  Xi’an Qinba Pharmaceuticals Co., Ltd.

Legal Representative: 

/s/ Wang Guozhu         

(Authorized Representative)       Wang Guozhu

Party B: 

Xi’an Pharmaceuticals Development Co., Ltd.

Legal Representative:  /s/ Chen Ying                  

(Authorized Representative)

Chen Ying

Shareholders of Party A hereby accept this Agreement and specifically agree to be subject to Article 3.2 of this Agreement:

				
	/s/ Wang Guozhu 

	 
	/s/ Zhang Guiping  

	 

	Wang Guozhu 

	 
	Zhang Guiping 

	 

	 
	 
	 
	 

	/s/ Yan Weidong

	 
	/s/ Zhang Yong                  

	 

	Yan Weidong

	 
	Zhang Yong

	 

	 
	 
	 
	 

	/s/ Xing Xiu’e       

	 
	/s/ Xu Yong   

	 

	Xing Xiu’e

	 
	Xu Yong

	 

	 
	 
	 
	 

	/s/ Wang Wei   

	 
	/s/ Gao Xiling   

	 

	Wang Wei

	 
	Gao Xiling

	 

	 
	 
	 
	 

	/s/ Guo Chenglin

	 
	/s/ Wu Weiping    

	 

	Guo Chenglin

	 
	Wu Weiping

	 

	 
	 
	 
	 

	/s/ Bai Ron

	 
	/s/ Wu Jin

	 

	Bai Rong

	 
	Wu Jin

	 

	 
	 
	 
	 

	/s/ Ding Zhibo

	 
	/s/ Guan Zheng

	 

	Ding Zhibo 

	 
	Guan Zheng

	 

	 
	 
	 
	 

	/s/ Pu Feng    

	 
	/s/ Yang Aifang      

	 

	Pu Feng

	 
	Yang Aifang

	 

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