Document:

Technology Transfer Agreement between Shanxi Weiqida and Alpha Process

 Exhibit 10.20 
 Portions redacted 

			
	 	  	* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

  
 TECHNOLOGY TRANSFER
AGREEMENT 
  
 Made this 6th day of August, 2002 
  
 BETWEEN 
  
 SHANXI WElQIDA PHARMACEUTICAL CO. LTD 
  
 SHANXI PROVINCE DATONG ECONOMIC AND TECHNOLOGY DEVELOPMENT AREA; P.R. 037300 CHINA hereinafter referred as ‘SW’ which is a company registered under the laws of CHINA 
  
 AND 
  
 ALPHA PROCESS TRUST REG. 
  
 IM ZIEL-430, POST FACR-146, MAUREN, FL 9493, LIECHENSTEIN hereinafter referred as ‘AP’ which is a company registered under the laws of LIECHENSTEIN 

 

	1.	PREAMBLE 

  

	 	1.1	SW is desirous to perform in his pharmaceutical plant (‘Plant’) in China the fermentation of CLAVULANIC ACID and then the recovery of the POTASSIUM CLAVULANATE, CK,
hereafter indicated as ‘Product’. 

  

	 	1.2	AP possesses the industrial technology of “Product”, 

  

	 	1.3	AP has agreed to supply to SW the process know-how and assistance to realize the production at SW Plant of Product (as hereinafter defined) by using the latest processes AP
possesses. 

  

	 	1.4	The parties therefore agree that AP sha1l supply such Know-how including the Strain and technical assistance to SW on the following terms and conditions. 

 

	2.	PRODUCTS AND PROCESSES 

  

	 	2.1	The products covered by this Agreement are: 

  

	 	-	CLAVULANIC ACID by fermentation, 

	 	-	POTASSIUM CLAVULANATE, CK. recovered from the fermentation broth of CLAVULANIC ACID. 

  

 1 

	 	2.2	The final Product, Potassium Clavulanate, CK, will comply with the specification of Appendix 1. 

  

	 	2.3	The technical process of this agreement includes: 

  

	 	A)	Strain preparation process: 

  

	 	-	The strains selection technology for stabilising the production. 

	 	-	All the related information about the strains selection. 

  

	 	B)	Fermentation process: 

  

	 	-	The formulation and raw material specification of each culture media. 

	 	-	Fermentation processes in fermentors. 

	 	-	Steri1izatizon process, testing method, control and disposal method. 

  

	 	C)	Filtering process 

  

	 	-	Pre-treatment and filtering technology of the fermentation broth. 

	 	-	The filtering and concentration method of the fermentation broth, optimized filtering speed and the quality control of filtered liquid. 

  

	 	D)	Recovery process 

  

	 	-	The specification and requirement of the extraction, and the preparation of the extractive solvent. 

	 	-	The extraction control point 

  

	 	E)	Refine and crystallization 

  

	 	-	Crystalization process and control method. 

	 	-	Drying method and key operation points. 

	 	-	Milling-screening and package officia1 product. 

  

	 	F)	Raw material consumption: 

  

	 	-	The consumption of fermentation and recovery raw materials for each Kilogram of product. 

  

	 	G)	Quality Control 

  

	 	-	The specification, testing method and analysis methods of the raw materials, intermediates and final product. 

	 	-	Analysis and analysis method of the fermentation both composition and “in process”. 

  

	 	H)	Equipment 

  

	 	-	Production process flow diagram; 

	 	-	Equipment specifications: all, equipment construction drawings will be provided by the equipment suppliers. 

  

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	 	-	If SW needs, AP will provide the detailed specifications and sketches of non-standard equipment (including supplier name). 

	 	-	General and preliminary layout of all buildings and all main equipment main equipment; piping drawings will be prepare by a local engineering company and, if requested by SW,
approved by AP. 

	 	-	Relative information about the prefabricate equipment (including suppliers name). 

  

	3.	THE STRAIN 

  

	 	A.	The Strain and its process-know-how could reach in fermentation about * * * based on fermentation cycle of 90 / 100 hours. 

  

	 	B.	The Extraction process can reach about * * * calculated as Kg of Pottassium Clavulanate from * * * Kg-Activity in harvest broth. 

  

	4.	TECHNOLOGY and SERVICES PROVIDED BY AP 

  
 For the Product AP will provide. 
  

	 	A)	Preliminary data of economical evaluation of the know-how. 

  

	 	B)	Detailed step-by-step description of the process in industrial plant, including Strains maintenance, block diagrams and preliminary flow-sheets of the process.

  

	 	C)	List and specifications of all equipment. Equipment construction drawings will be prepared by the relevant manufacturers with AP technical assistance. 

  

	 	D)	Assistance in equipment procurement from different suppliers. 

  

	 	E.)	Analytical methods and quality specification for raw materials finish products and intermediates. 

  

	 	F)	Technical assistance and supervision during the production in laboratory and pilot plant. 

  

	5.	VERIFICATION TECHNICAL PARAMETERS 

  
 In case that SW follows all AP’s instruction and specification of processes to be supplied by AP under this Agreement, SW shall obtain the following production
technical parameters: 
  

	 	5.1	Technical Parameters 

  

	 	A)	Fermentation in * * * (net fermentation cycle excluding discharge and feeding of fermentor): * * *. 

  
 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 
  

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 Guaranteed fermentation yield in * * * hours (net fermentation cycle); * * *. 
  

	 	B)	Extraction yield from fermentation broth calculated as Kg of Potassium Clavulanate (CK) from * * * Kg Activity in harvest broth: * * * Guaranteed yield: * * * Kg of CK from *
* * Kg Activity of in harvest broth. 

  

	 	C)	Fermentors capacity utilization ratio: 75% 

  

	 	5.2	The quality of Potassium Clavulante, CK, produced with AP’s technology shall conform to US Pharmacopoeia The quantities of raw materials and reagents necessary for the
production of 1.00 kg of Potassium Clavulanate are specified in Appendix 2. 

  

	6.	SERVICE TO BE PROVIDED BY SW 

  
 SW will provide or perform following services at no cost to AP. 
  

	 	A)	Organize a project team with a minimum number of engineers, chemists and biologists which shall receive the process documentation supplied by AP. The number of the persons of the
team may be increased according to future requirement. 

  

	 	B)	Purchase in due time all the equipment according to the lists specifications and relevant drawings of such equipment which shall be supplied by AP. Procure all relevant services to
finalize the design regarding civil engineering and installation of the equipment. Such design shall be based on the basic documentation and specifications as provided by AP under this Agreement. 

  

	 	C)	Procure in due time all the raw materials and reagents of the required specifications for the performance of test runs and verification batches. 

  

	 	D)	Take all the necessary steps in accordance with the specifications, to be furnished by AP at least 3 (three) months in advance, so that at the various phases of the implementation
of the project, the personnel which is required according to AP’s recommendations, is available. The personnel referred to above includes engineers, chemists, technicians, foremen and workers. 

  

	7.	DURATION 

  
 The duration of this Agreement shall be for a period of 3 (three) years from the date of signing of this Agreement. 
  
 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

  

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	8.	PAYMENT 

  

	 	8.1	AP will provide SW with the above mentioned strain, technical know-how, drawings, designs, documentation. etc., services under this Agreement, SW shall pay’ to AP an amount of
US$ 600,000, net and free of any tax. All the contract payment should be paid in US$            free of tax. SW will pay the domestic taxes and bank charges in China, and AP will pay the
taxes and bank charge outside of China. 

  

	 	8.2	The above mentioned lump sum amount will be paid as following times: 

  

	 	1)	SW shall remit fifteen percent (15 %) that is 90,000 US$            of the contract value to AP as down payment at the
contract signing. 

  

	 	2)	Payment of twenty percent (20 %) that is 120,000 US$            of the contract value will be paid by SW after receiving
the strain and all documents required to verify in laboratory (FLASK+SHECKER) that strain is CLAVULANIC ACID. The strain is verified when its yield/potency in laboratory will be more than * * * of Clavulanic Acid. The maximum industria1 yield and
potency will be then verified as indicated on next step 8.23). 

  

	 	3)	Payment of thirty percent (30 %) that is 180,000 US$            of the contract value will be paid by SW after Laboratory
or Pilot plant validation of fermentation according to the procedure specified in the contract. 

  

	 	4)	Payment of twenty five percent (25 %) that is 150,000 US$            of the contract value will be paid by SW after
Laboratory or Pilot plant validation of Recovery, according to the procedure specified in the contract. 

  

	 	5)	Payment of ten percent (10 %) that is 60,000 US$            of the contract value will be paid by SW after Industrial
production verification according to contract procedure and after SW receives qualified certificate letter with both parties 

  

	 	8.3	SW shall provide, free of charge to personnel deputed by AP to provide 

  

	 	A)	Technical assistance at SW’s sites, 

  

	 	B)	Suitable hotel accommodation and meal, 

  

	 	C)	Necessary ground transportation in China, 

  
 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 
  

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	 	D)	At site office services, 

  

	 	E)	Air tickets Europe-China-Europe, in business class, 

  

	 	8.4	In case that SW requires that AP technicians will be present at site days, or persons in addition of what indicated in Appendix 3, SW will pay to AP, in addition of the expenses
above indicated, also: 500 US $            per day/person. 

  

	 	8.5	In case that the project is delayed for reasons not caused by AP, and provided that AP has fulfilled all its full obligations and responsibilities, SW will pay the remaining amounts
not later than one year after expiring of this Agreement. 

  

	9.	PATENT 

  
 AP has presented to SW that the processes and the products of this contract are not patented by AP. AP is not responsible for any patent infringement in China or in any other country where SW may export the products.

  

	10.	VERIFICATION 

  

	 	10.1	The test period for the trial runs to verify the technical parameters will be decided by SW and AP. 

  

	 	10.2	Verification completions is regard as when SW personnel with the assistance of AP is able to manufacture 3 (three) batches of the Products obtaining the technical parameters yields
corresponding at least to the ones guaranteed by AP in Article 5. The yields and technical parameters shall be calculated as the average of 3 (three batches). Batches showing abnormalities due to mechanical problems, breakdowns of utilities or any
other reason which are clearly identified and are beyond the reasonable control of responsibility of AP will however be excluded from calculation of the average. 

  

	 	10.3	All test runs for demonstration/validation of the processes in laboratory, pilot plant and industrial plant shall be performed with local raw materials. In case that the local raw
materials do not conform the requirements specified by AP, then AP shall try to help SW to adapt the process with local raw materials. But if AP realized that some of local raw materials cannot be in accordance with requested characteristics after
AP’s assistance, the verification test shall be repeated using some imported raw material suggested by AP. 

  

	 	10.4	Industry verification processes performance as below: 

  

	 	A)	The industrial fermentation will be performed in * * *. The fermentation period is * * *: the average yield is calculated on 3 

  
 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

  

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	 	    	batches and the average yield must reach the ensured yield as indicated in item 5.1. 

  

	 	B)	During the verification period, AP should use all the necessary ways to assistant SW learning all the producing process of CLAVULANIC ACJD. 

  

	 	C)	The verification time of industrial production should be determined by both sides. If the result of the verification can reach the guaranteed technical parameters in the contract,
the both sides should sign the verification certification. 

  

	11.	FORCE MAJOUR 

  
 No failure to carry out or observe any of the stipulation or conditions of the Agreement shall, except as herein expressly proved to the contrary, give rise to any claim against either party or be deemed a breach of
the Agreement if such failure arises form fire, earthquake, volcanic eruption, explosion, strikes, lockouts, other labour disputes, lake or failure of transportation facilities, epidemics, storms, floods, drought, war declared or undeclared,
hostilities, revolution, civil commotion, blockades, embargo accidents or from any other cause whatsoever, beyond the control of the party involved. 
  

	12.	ARBITRATION 

  
 Any dispute arising out of the Agreement that cannot be settled by the parties themselves shall be settled by arbitration. Arbitration will be executed by Chamber of Commerce in Zurich, Switzerland. 
  

	13.	CONFIDENTIALITY 

  

	 	13.1	SW agrees not to use any of the information supplied under this Agreement except for the purpose of producing Products at Plant. 

  

	 	13.2	Information supplied under this Agreement shall not be disclosed to any third parties except SW’s employees who are required to have knowledge of such information for the
purpose hereof and who shall be bound to AP by the same obligation of confidentiality. 

  

	14.	TRANSFER AND ASSIGNMENT 

  
 SW is not allowed to sub-license or assign or otherwise transfer the manufacture of products or any technology or know-how provided to it under this
Agreement, to any one else without the prior written approval by AP. This provision shall remain in force also after the termination or expire of this Agreement. 
  

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	15.	TAXES 

  
 Each part will pay the taxes in connection with the execution of this Contract in his country; AP in Liechtenstein and SW in China. 
  

	16.	EFFECTIVENESS OF THE CONTRACT 

  

	 	16.1	After the contract being signed by both parties, and SW informed AP in writing, the contract should become effective. The contract shall written in two originals, one for each
party. Both English and Chinese versions are of the same effectiveness. 

  

	 	16.2	The attachments of this contract shall form an integral part of the contract. 

  

									
	 Alpha Process Trust Reg.
	 	 	 	 Shanxi Weiqida Pharmaceutical Co. Ltd.

					
	 	 	  
 /s/ Wang Jian
	 	 	 	 	 	  
 /s/ Han Yanlin

	 	 	 	 	 	 	 	 	 

  

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 APPENDIX 1 
  

			
	 CLAVULANIC ACID
	  	Raw materials consumption for 1.0 kg of
Potassium Clavulanate (CK)
	 Raw Materials
	  	Kg
		
	 FERMENTATION
	  	 
		
	 Ammonium hydroxide 30% sol.
	  	***
	 Ammonium suplhate
	  	***
	 Antifoam (PPG2000)
	  	***
	 Calcium chloride
	  	***
	 Copper sulphate
	  	***
	 Corn starch
	  	***
	 Dextene
	  	***
	 Ferric chloride
	  	***
	 Glucerol
	  	***
	 Glucerol trioleate
	  	***
	 Magnesium sulphate
	  	***
	 Manganese sulphate
	  	***
	 Potassium phosphate dibasic
	  	***
	 Potassium phosphate monobasic
	  	***
	 Soybean meal
	  	***
	 Ures
	  	***
	 Zinc sulphate
	  	***
		
	 RECOVERY
	  	 
		
	 z-Ethyl-exanoic acid
	  	***
	 Acetic acid 80% sol.
	  	***
	 Decolorising carbon
	  	***
	 Filter acid
	  	***
	 Fozmaldeide 25% sol.
	  	***
	 n-Buthyl alcohol
	  	***

  
 *** CONFIDENTIAL
MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 
  

 9 

 APPENDIX 2 
  
 Clavulanate Potassium 
 Non sterile hygroscopic powder 
  
 FORMULA            C2H8KNO5 
 M.W.                       237.3 
  

			
	 	  	Specifications
	 Description
	  	 :        White or almost white crystalline powder, hydroscopic (UPS).

	 Identification
	  	 :        passes test (USP).

	 Assay by HPLC
	  	 :        * * * on the anhydrous substance (USP)

	 (HPLC)
	  	 :        * * *

	 Water content
	  	 :        * * *

	 pH (1% water)
	  	 :        * * *

	 pH (1%)
	  	 :        * * *

	 Specific optical rotation
	  	 :        * * * on the anhydrous substance (USP).

	 Absorbance at 278 nm
	  	 :        * * *

	 Standard packaging
	  	 :        stainless steel drums

	 Storage condition
	  	 :        the product must be protected from light and moisture in well closed container: Store at a
temperature between +2 and +8oC

	 Warning
	  	 :        The product is highly flammable and may cause explosion by contact with free flames and/or
Electrostatic charges.

  
 *** CONFIDENTIAL
MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 
  

 10 

 APPENDIX 3 
  

	A.	For the execution of the Agreement and completion of all Services provided by AP, AP guarantees the following assistance with its technicians in (Engineers, Chemists, etc)

  

	 	A.1	One technician for four days during the first phase of project elaboration. 

  

	 	A.2	One technician for 1 week during the end period of detailed design for final approval of the detailed drawings. 

  

	 	A.3	One technicians for 1 week during Fermentation pilot tests and laboratory tests for Clavulanic Acid and Recovery of Potassium Clavulanate. 

  

	 	A.4	Two technicians for one week during production start up. 

  

	 	    	The expenses of air tickets Europe-Beijing-Europe), for the local transportation, accommodation, meal, office will be borne by SW. 

  

	B.	In case that SW requests AP to come to SW’s site for technical assistance beyond the visit duration and number of people the above-mentioned visit service schedule (not due to
the AP’s responsibility), then SW shall bear, in addition of all costs mentioned above also: 

  

	 	-	service charge: - $ 500/day/man 

  

 11Manufacturing Agreement

 Exhibit 10.21 
 Portions redacted 

			
	 	  	* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

  
 Manufacturing
Agreement for Dry-freeze Levofloxacin Injectable 
  
 This agreement is made
and entered by and between: 
  
 Shanxi Weiqida Pharmaceutical Co., Ltd., Datong,
Shanxi, China (hereinafter referred to as party A) 
  
 Shanxi Pude Pharmaceutical
Co., Ltd., Datong, Shanxi, China (hereinafter referred to as party B) 
  
 Through
friendly negotiation, party A and party B agree to enter into an agreement on manufacturing the Dry-freeze Levofloxacin Injectable as follows: 
  

	 	1.	Party A contracts out manufacturing “Levofloxacin Injectable” (Dry-freeze, dosage 0.1g) to party B. 

  

	 	2.	Party A provides qualified Levofloxacin raw materials and packing materials (tubular vials, butyl stoppers, and aluminum caps), which should meet the standards of party B.

  

	 	3.	Party B manufactures the products up to capping, and party A is responsible for outside packaging. 

  

	 	4.	The products manufactured by party B should meet quality control standards set by party A, and party B is fully responsible for product quality resulted from the process of
manufacturing. If the quality of product can’t meet party A’s standards, any expenses involved will be beared and be deducted from party B’s manufacturing charges. 

  

	 	5.	The product inspection is subject to Party A’s reports on inspection (with raw material, finished product standards). 

  

	 	6.	Manufacturing charges calculation is as follows: 

  
 Based on the previous manufacturing capacity of Party B, the monthly production output is not less than 100,000 vials. 
  

	 	a.	A yearly production output of 1 million vials, the rate is RMB * * * per vial. 

  

	 	b.	A yearly production output between 1 million and 2 million vials, the rate is RMB * * * per vial. Party A will make a lump sum payment at the end of each year.

  

 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

	 	c.	A yearly production output between 2 million and 3 million vials, the rate is RMB * * * per vial. Party A will make a lump sum payment at the end of each year.

  

	 	d.	Party A makes the payment monthly, and party B makes the value added invoice by actual quantities. 

  

	 	7.	The rate of finished product of Dry-freeze Levofloxacin Injectable is not less than * * *, and the rate of utilization of tubular vials, butyl stoppers, and aluminum caps is not
less than * * *. The quantity of finished products is subject to the count of both parties, but the disqualification products will be excluded from the calculation of manufacturing charges. 

  

	 	8.	If the rate of finished product is more than * * *, party A will buy back the extra finished products at a rate of RMB * * * per vial. If the rate of finished product doesn’t
reach * * *, party A will deduct the deficit products at a rate of RMB* * * per vial. 

  

	 	9.	In the process of manufacturing, if the rate of utilization of packing materials doesn’t reach 97%, party B should buy extra packing materials from Party A; if the rate of
utilization of packing materials is more than 97%, party A will buy back the savings, if the quantity is material. 

  

	 	10.	Party A provides the production plan to Party B 15 days in advance, and party B arranges the production within 15 days after receiving raw materials. Party B shall use its best
efforts to complete the production. Party A is responsible for the transportation involved in the manufacturing. 

  

	 	11.	All the matters not included in this agreements will be negotiated by parties. 

  

	 	12.	The agreement is signed in Chinese, with four copies, and two for each party. 

  

	 	13.	The agreement is valid starting January 2003. 

  

	
	Party A: Shanxi Weiqida Pharmaceutical Co., Ltd.
	
	/s/    ZHANGUO WENG        
	Mr. Zhanguo Weng
	 Date: April 21, 2003

	
	 Party B: Shanxi Pude Pharmaceutical Co., Ltd.

	
	/s/    CHENGWEI HU        
	Mr. Chengwei Hu
	 Date: April 21, 2003

  

 *** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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