09:17     SINO BIOPHARM<01177> - Announcement (2)                             

    which will be held as to 60% by CTL, 24% by Lianyungang Runzi             
    and 16% by Jiangsu Juxin respectively.                                    
                                                                              
    THE JOINT VENTURE AGREEMENT AND THE JOINT VENTURE ARTICLES                
                                                                              
    The following is a summary of the terms of the Joint Venture              
    Agreement and the Joint Venture Articles:                                 
                                                                              
    Date    :       27 May, 2005                                              
                                                                              
    Parties :       CTL, Lianyungang Runzi and Jiangsu Juxin                  
                                                                              
    Subject         :       The formation of the Joint Venture which will be  
    held as to 60% by CTL, 24% by Lianyungang Runzi and 16% by Jiangsu        
    Juxin respectively.                                                       
                                                                              
    The Joint Venture will be engaged in the wholesale distribution           
    of the modernised Chinese medicines, chemical medicines and               
    modern health-care products produced by the Group.                        
                                                                              
    Registered capital      :       The total registered capital of the Joint 
    Venture will be US$970,000 (approximately HK$7,566,000), which            
    will be contributed in cash as to US$582,500 (approximately               
    HK$4,543,500) by CTL, RMB1,920,000 (approximately HK$1,804,800)           
    by Lianyungang Runzi and RMB1,280,000 (approximately                      
    HK$1,203,200) by Jiangsu Juxin respectively. The portion of the           
    Group's contribution to the Joint Venture will be fully funded            
    by internal resources of the Group.                                       
                                                                              
    The net profits of the Joint Venture will be distributed among            
    the Parties in proportion to their respective interests in the            
    registered capital of the Joint Venture.                                  
                                                                              
    The total investment of the Joint Venture will be US$1,600,000            
    (approximately HK$12,480,000). Apart from the obligation to               
    contribute its share of the registered capital to the Joint               
    Venture, CTL has no other capital commitment to make contribution         
    to the Joint Venture under the Joint Venture Agreement and the            
    Joint Venture Articles. CTL is not required under the Joint               
    Venture Agreement and the Joint Venture Articles to provide any           
    guarantee to the Joint Venture.                                           
                                                                              
    The amount of capital for the formation of the Joint Venture              
    is agreed upon by the Parties after arm's length negotiation              
    taking into account that the business of the Joint Venture is             
    not capital intensive and future expansion of the Joint Venture           
    will be expected to be financed by internal generated income              
    from the operation of the Joint Venture and/or external                   
    borrowings from financial institutions, as the Parties consider           
    appropriate.                                                              
                                                                              
    Completion      :       The Joint Venture will be established upon the    
    issuance of the business licence by the relevant PRC authority.           
                                                                              
    Transfer Restrictions   :       In the event that a Party wishes to       
    transfer (all or part of) its interests in the Joint Venture              
    to a third party (save for transfer to a Party's parent company,          
    subsidiaries or fellow subsidiaries), it shall first offer to             
    the other Parties the opportunity to purchase such interests              
    on the same terms and shall obtain the written consent of the             
    other Party(ies) and the approval of the relevant PRC authority           
    prior to such transfer.                                                   
                                                                              
    Board Representation    :       The board of directors of the Joint       
    Venture shall comprise five directors. CTL is entitled to appoint         
    3 directors (including the Chairman and the Managing Director).           
    Jiangsu Juxin is entitled to appoint 1 director whilst                    
    Lianyungang Runzi is entitled