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Exhibit 10.18
LETTER OF INTENT
LIFE SCIENCES, INC. WITH BEIJING AOKAI AUTOMATION SYSTEM
ENGINEERING CO. AND VAMED MEDICAL INSTRUMENTATION CO. LTD.
This shall serve to confirm the understanding of the parties with respect to a
proposed Joint Venture by and between Life Sciences, Inc. ("LSI"), a St.
Petersburg Florida company having its principal offices at 2900 72nd Street
North, St. Petersburg Florida, USA; Beijing Aokai Automation System Engineering
Co. ("BAKASC") a Beijing, China company having its principal offices at fl: 12
Chengxiang Hua mao Building A-23 Fuxing Road Haidiam Distyic, Beijing China and
Vamed Medical Instrumentation Co. Ltd. ("VAMED") a Foshan, Guangdong, China
Company having its principal offices at 6 Harbour Road, Foshan City, Guangdong
China.
WHEREAS, LSI is a producer of molecular biology enzymes and related
reagents together with complete kits that incorporate these components in unique
combinations for applications in molecular biology and will require instrument
design and manufacturing resources of the types possessed by VAMED, and
WHEREAS, VAMED is the manufacturer of an Enhanced External Counterpulsation
(EECP(R)) apparatus used in patient treatment in a noninvasive, outpatient
procedure to relieve angina by improving perfusion in areas of the heart
deprived of adequate blood supply, and
WHEREAS, BAKASC desires to join in this joint venture as an equity investor
and has committed to provide a substantial portion of the start-up working
capital and raise from outside sources the additional capital necessary to fund
the intermediate development stage of the proposed joint venture together with
participating in the regulatory approvals and marketing of the products of the
proposed joint venture:
NOW, THEREFORE, the parties hereto express their intent to establish to a joint
venture to create, market and distribute nationally, in China, and in other
countries, all of the products of the joint venture within the limitations
defined by the contractual commitments of each of VAMED and LSI:
1. The joint venture shall be established as a separate Foshan,
Guangdong China Corporation ("Life Sciences Foshan Co."
[LSFC]) having total capital of $US 1,500,000 of which 70%
($US $1,050,000) shall be registered capital. Each of LSI,
BAKASC and VAMED shall own 51%, 29%, and 20% respectively of
the capital stock of LSFC. The accompanying table at the end
of this document is incorporated to illustrate this
distribution. LSFC shall have a Board of Directors of four (4)
persons; two (2) nominated by LSI, one (1) nominated by
BAKASC, and one (1) nominated by VAMED. The affirmative vote
of three (3) directors shall be required for any corporate
action by LSFC.
2. LSI shall:
(a) Contribute a 51% pro rata share of the cash component
of the initial registered capital of LSFC amounting to
$US 306,000. Within 24 months of the issuance of the
Business Certificate of LSFC, LSI shall make
additional contributions to the registered capital of
LSFC comprised of intellectual property (IP) valued a
not less than US$ 200,000 and equipment valued at not
less than $29,500. Within the same 24 month period,
LSI shall
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make further contributions to the total capital of
LSFC of specialized equipment valued at not less than
US$229,500.
(b) Make available to LSFC a fully paid up license as
required to implement the production and sale of
dried, thermostable nucleic modifying enzymes and
other components utilized in molecular biology
research, clinical diagnosis utilizing nucleic acid
amplification and other related applications.
(c) Make available to LSFC a fully paid up licenses as
required to develop produce and sell in China and
Taiwan diagnostic test kits based on the nucleic
acid sequence based amplification (NASBA) technology
for detection of human pathogens in clinical
specimen and in environmental related matrices to
include air and water.
(d) Provide skilled management to plan and direct the
development of the capability within the joint
venture to develop, produce, and sell molecular
biology enzymes and reagents and complete test kits
that combine these materials in unique ways to enable
the detection of specific pathogens and related
applications.
(e) Provide skilled management to develop and install
accounting and other internal control system that
satisfy the reporting requirements for United States
registered public companies and Chinese commercial
entities.
3. BAKASC shall:
(a) Contribute a 29% pro rata share of the cash
component of the initial registered capital of LFSC
amounting to US$174,000. Within 24 months of the
issuance of the Business Certificate of LSFC BAKASC
shall provide additional funds totaling US$261,000
of which US$130,500 will be added to the registered
capital of LSFC.
(b) Contribute its best efforts to secure as needed, the
additional US$5 million in working capital that the
Parties project will be required to achieve LSFC's
2-3 year objectives for development, regulatory
approval and production and sale in China and Taiwan
of its own NASBA based diagnostic tests for
detection of pathogens in clinical specimen.
(c) Provide skilled managers or experts to represent
LSFC before National (China) regulatory and
administrative agencies.
(d) Provide skilled management to develop an administer
networks for distribution and sale in China of the
products of LSFC during the initial 2-3 years of the
operations of LSFC.
4. VAMED shall:
(a) Provide a 20% pro rata share of the cash component of
the initial registered capital of LSFC amounting to
US$120,000. Within 24 months of the issuance of the
Business Certificate of LSFC, VAMED shall make
additional contributions to the registered capital of
LSFC of US$90,000 of and further contributions of
US$90,000 to the total capital of LSFC of which
US$75,000 shall be IP. These latter contributions
shall be in the form of VAMED's corporate assets to
include its manufacturing, office and miscellaneous
equipment and furnishings, real property leases and
intellectual property related to its current good
manufacturing practices (cGMP) certification by the
U.S. Food and Drug Administration (FDA). In addition,
within 60 days of the issuance of the Business
Certificate of LSFC, the EEPC Advisory Committee
shall notify the FDA of the change in the business
name of VAMED effected by the formation of LSFC.
(b) Provide skilled management to sustain the operation
of the manufacturing facility for production of
complete EECP apparatus; new and replacement parts
for EECP apparatus;
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instruments produced for the molecular biology
operations of LSFC and instruments produced for
others on an OEM basis.
(c) Provide skilled management to sustain the
administration of LSFC to include VAMED's current
operations and the expanded operations
contemplated by the Business Plan of LSFC.
(d) Provide skilled managers or experts to maintain the
current and future requirements for implementation
of FDA and SDA cGMPs and other regulatory
requirements.
5. The Parties have mutually agreed to the following additional
organizational, administrative and financial considerations
that will be reflected in the LSFC's Certificate of
Incorporation (Charter), By-Laws or Joint Venture Agreement,
as appropriate.
(a) At formation, the original Directors and Officers of
LSFC shall be:
<TABLE>
<S> <C> <C>
Simon Srybnik (LSI nominee) Chairman of the Board, CEO, Director
Wang Ben (LSI nominee) Director
Tan Jian (BSKASC nominee) Director
Ma Ji (VAMED nominee) Director
Li Xi-chang President, COO
Alex Burns Executive Vice President
------------- Chief Financial Officer
Ma Jun Secretary
</TABLE>
(b) EECP Operations
The EECP operations and molecular biology and OEM
instrumentation manufacturing of LSFC will be
operated under the direct oversight of an Advisory
Committee comprised of the members of the Board of
Directors of Vamed Medical Instrument Co. Ltd.
immediately prior to the formation of LSFC.
The EECP Advisory Committee shall have total claim,
for the benefit of the shareholders of Vamed Medical
Instrument Co. Ltd., and full rights for distribution
of profits arising from the sale of the current
family of EECP products to included complete
apparatus and new and replacement parts. Such profits
shall be made available for distribution by the Board
of Directors of LSFC within 30 days of the rendering
of an audit opinion to the LSFC Board of Directors by
LSFC's independent auditors.
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The Parties contemplate the final agreement with respect to matters set forth
in this Letter of Intent shall be executed prior to October 15, 2000. In the
interim period an during any period of delay after October 15, 2000, each of
LSI, BAKASC and VAMED is fully committed to pursue the critical elements of the
LSFC Business Plan developed during the organizational meetings held on July
8-13, 2000 at Foshan, Guangdong China. Expenditures of funds by each of the
parties during the interim and delay periods in furtherance of this Plan shall
be treated as loans to LSFC and repaid from the proceeds from the initial
distribution of the securities of LSFC to the parties to the Joint Venture upon
issuance of its Business Certificate. All expenditures related to the
organization of LSCP shall be made in China. The said final agreement shall be
subject to the approval of the board of directors of each party hereto.
July 18, 2000.
Life Sciences, Inc.
/s/ ALEX A. BURNS
----------------------
Alex A. Burns
Beijing Aokai Automation System Engineering Co.
/s/ Tan Jian
----------------------
Tan Jian
Vamed Medical Instrument Co. Ltd.
/s/ Ma Ji
----------------------
Ma Ji
<TABLE>
<CAPTION>
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TOTAL INVESTMENT INITIAL REGISTERED 2ND REGISTERED CAPITAL FINAL 30% OF
(TI) CAPITAL (40% OF TI) (30% OF TI; WITHIN 24 MO.) TI
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<S> <C> <C> <C> <C>
LSI $ 765,000 Cash $306,000 IP $200,000 EQP $229,500
(51)% EQP $ 29,500
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BAKASC $ 435,000 Cash $174,000 Cash $130,500 Cash $130,500
(29)%
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VAMED $ 300,000 Cash $120,000 Assets $ 90,000 IP $ 75,000
(20)% Assets $ 15,000
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Total $1,500,000 $600,000 $450,000 $450,000
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</TABLE>
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