EXHIBIT 10.40

 

English translation of Agreement dated June 3, 2008 by and between Beijing Liang

Fang Pharmaceutical Co., Ltd., a Chinese limited liability company,

and Cha You Qian Qi Economy Commission.

 

Agreement

 

Party A: Cha You Qian Qi Economy Commission

Party B: Liang Fang Pharmaceuticals Limited Liability Corporation

 

Party B has the intention that they want to make the investment to construct
pharmaceuticals industrial garden in party A’s Cha Ha Er industrial garden
district and manufacture and sell pharmaceuticals (raw material, mass liquids,
Chinese medicine extracting, small water needle, medicinal corn starch and solid
preparation etc.), health products, cosmetics etc.. Based on both parties’ equal
discussion, both parties agree to sign the following agreement:

 

I.         Based on the inspecting and reasoning of party B, party B decides to
establish and register Liang Fang Pharmaceuticals (Inner Mongolia) Limited
Liability Corporation in party A’s Cha Ha Er industrial garden district. The
total investment is 500 million RMB. The purpose of the investment is to develop
and construct pharmaceuticals, health products, cosmetics and advanced process
for corn project. Funding will be paid by installment: first period: 180 million
RMB, second period: 120 million RMB, third period: 200 million RMB.

 

II.        According to the party B’s project plan, Party A will provide party B
600 MU land for the purpose of construction and 400 MU land for the purpose of
reservation. The fee for land sale and licensure (all included) is 0.18 million
RMB/MU. The land is located on the north of Cha Ha Er Industrial Garden District
You Yi Road and on the west of Cha Ha Er Road. Please read the attachment for
the detail of location.

 

III.       Party B’s project must meet the Cha Ha Er industrial garden
district’s general plan requirement. The project will be implemented after party
A oversee and finish the process of environment protection review and institute
the project.

 

IV.       Party B can construct self-reserved water source project to meet the
water demand of the project. Party A will not impose fee for water resource,
waste and other relative supplies for 30 years. Party A will give party B
specific benefit for land use tax for 5 years based on the situation of party
B’s project progress since party B begins normal manufacture. After 5 year, the
land use tax will be implemented and the tax rate will be based on local
relative favorable policies.

 

V.        Party A will provide and construct temporary electrical supplies and
10,000 volt electrical power in party B’s project district. If possible, the
electrical power will be constructed according to two-circuit style in party B’s
project district. The needed heating of the project will be provided by the
industrial garden district utility company or solved by party B itself. The
waste of party B must meet the normal waste standard and drain the waste to
industrial garden district drainage.

 

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VI.       After the project is completed and party B begins production, the
local reserved portion of imposed corporation income tax will fully return to
party B in the first 8-year period by local finance department as an award. The
half of local reserved portion of imposed corporation income tax will return to
party B in the second 8-year period by local finance department as an award. The
imposed high level managements’ individual income tax in the first 8-year period
will be fully returned by local finance department as an award.

 

VII.      In the construction period, all fees which concern local government’s
administration will be imposed according to the minimal standard of relative
rules of P.R.C. government and municipality.

 

VIII.    Party B must begin the project construction in 90 business days since
the agreement is signed by both parties. The first project construction period
is 12-18 months. If party B can not begin the project construction in promised
period, party A has the right to restore the land which has sold to party B for
free and party B will be responsible for the resulted loss.

 

IX.       Party B can not change the land use intention without party A’s
permission. Otherwise, party A has the right to restore or dispose the land
which has sold to party B.

 

X.        Party A makes the promise that party B will not only enjoy P.R.C. west
development favorable policies but also enjoy municipality, Wu Lan Cha Bu city
and Cha You Qian Qi relative various supporting policies. Party A must provide
cooperation and give prior consideration to party B when party B is striving to
apply for various specific supporting funds.

 

XI.       Party A will put the project in the list of Important Attract
Investment Projects. The relative departments of party A will coordinate to
resolve those problems that concern industry and business, fire extinguishment,
environment protection, electrical power etc. Party A promises to provide
relative various services to party B if it is party A’s responsibility to
provide these kinds of services to party B during party B’s project construction
period.

 

XII.      There are four originals of the agreement. Each party holds two
originals. Both parties will negotiate those things that are not included in the
agreement. Furthermore, both parties can sign addendum (if possible). The signed
addendum and the agreement are equally valid. The agreement will be put into
effect after both parties signed it.

 

Party A: (name and seal) Cha You Qian Qi Economy Commission

Agent of party A: (signature) Li Yue You

 

Party B: (name and seal) Liang Fang Pharmaceuticals Limited Liability
Corporation

Agent of party B: (signature) Zhong Yi Liu

 

The date on which both parties signed the contract: 06/03/2008

 

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