Exhibit 10.2

OPERATING AGREEMENT
 

This Operating Agreement (this “Agreement”) is dated May 15, 2012, and is
entered into in Hangzhou City, People’s Republic of China (“PRC” or “China”) by
and among Zhejiang Jiuxin Investment Management Co., Ltd (“Party A”) and
Zhejiang Jiuying Grand Pharmacy Co., Ltd.  (“Party B”), the individual
shareholders collectively holding 51% of the issued and outstanding equity
interests of Party B (i.e. LIU Lei, JIN Chong’an and QI Li, each as a
“Individual Shareholder” and collectively as “Party C”), and Zhejiang Shouantang
Medical Technology Co., Ltd (“Party D”).  Party A, Party B, Party C and Party D
are each referred to in this Agreement as a “Party” and collectively as the
“Parties.” Party D is made a party hereto for the sole purpose of acknowledging
this Agreement.

RECITALS

1.           Party A, a company incorporated in the PRC as a foreign invested
enterprise, specializes in enterprise management and consultation;

2.           Party B is engaged in retail of prescription and non-prescription
drugs including traditional Chinese medicinal materials, Chinese prepared
medicines, cut crude drugs, pharmaceutical chemicals, antibiotics, biochemical
drugs, and biological products; retail of pre-packaged food and dairy products
(including  milk-based powdered infant formulas)  and retail of general
merchandise (collectively the “Business”);

3.           Party A owns 10% of the equity interests of Party B;

4.           Party C collectively own 51% of the equity interests of Party B, in
which LIU Lei holds 19.89% of the equity interests of Party B, JIN Chong’an
holds 15.81% of the equity interests of Party B and QI Li holds 15.3% of the
interests of Party B.;
 
5.           Party D owns 39% of the equity interests of Party B;

6.           Party A has established a business relationship with Party B
pursuant to that certain Consulting Services Agreement dated May 15, 2012
(hereinafter “Consulting Services Agreement”);

 
 

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7.           Pursuant to that certain Consulting Services Agreement, Party B is
obligated to make regular payments of consulting services fee to Party A during
the term of the Consulting Services Agreement.  However, no payment has yet been
made, and Party B’s daily operation has a material effect on its ability to make
such payments to Party A; and

8.           The Parties are entering into this Agreement to clarify certain
matters in connection with Party B’s operations in order to ensure Party B’s
ability to meet its obligations under the Consulting Services Agreement,
including payment of consulting services fee.

NOW THEREFORE, all Parties of this Agreement hereby agree as follows through
negotiations:

1.           Party A agrees, subject to Party B’s agreement to relevant
provisions of this Agreement, to be Party B’s guarantor in connection with the
contracts, agreements and transactions executed between Party B and any third
party, and to provide full guarantee for the performance of such contracts,
agreements or transactions by Party B.  Party B agrees, as a counter-guarantee,
to pledge all of its relevant assets, including accounts receivable, to Party
A.  Pursuant to such guarantee arrangement, Party A may, pursuant to Section 5,
enter into written guarantee agreements with Party B’s counter-parties to assume
guarantor liability, upon which Party B and Party C shall take all necessary
actions (including, but not limited to, executing relevant documents and
commencing relevant registrations) to carry out the counter-guarantee
arrangements to be provided to Party A.

2.           In consideration of Section 1 herein and to ensure the performance
of the various arrangements between Party A and Party B, including related
payment obligations of Party B to Party A, Party B and Party C hereby jointly
agree that Party B shall not, without the prior written consent of Party A,
conduct any transactions which may materially affect the assets, obligations,
rights or the operations of Party B (excluding proceeding with Party B’s normal
business operation and the lien obtained by relevant counter parties due to such
proceedings).  Such transactions shall include, without limitation the
following:
 
              2.1           To borrow money from any third party or assume any
debt;
 
              2.2           To sell or acquire from any third party any asset or
right, including, but not limited to, any intellectual property rights;

 
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              2.3           To provide any guarantees to any third parties using
its assets or intellectual property rights; or

              2.4           To assign to any third party its business
agreements.

3.           In order to further ensure Party B’s performance of the various
arrangements between Party A and Party B, including related payment obligations
of Party B to Party A, Party B and Party C hereby jointly agree to accept the
corporate policies provided by Party A in connection with Party B’s daily
operations, financial management and the employment and dismissal of Party B’s
employees.

4.           Party B and Party C hereby jointly agree that Party C shall appoint
such individuals as recommended by Party A to be Directors of Party B, and shall
appoint members of Party A’s senior management as Party B’s General Manager,
Chief Financial Officer, and other senior officers.  If any member of such
senior management leaves or is dismissed by Party A, he or she will lose the
qualification to take any other position with Party B, and Party B shall appoint
another member of Party A’s senior management as recommended by Party A to take
such position.  The person recommended by Party A in accordance with this
section shall have the qualifications necessary to be a Director, General
Manager, Chief Financial Officer, and/or other relevant senior officers pursuant
to applicable laws.

5.           Party B and Party C, hereby jointly agree and confirm that Party B
shall first seek guarantee from Party A if Party B requires any guarantee for
its performance of any contract or loan in the course of its business
operation.  Under such circumstances, Party A shall have the right, but not the
obligation, to provide the appropriate guarantee to Party B at its sole
discretion.  If Party A decides not to provide such guarantee, Party A shall
issue a written notice to Party B immediately and Party B shall seek a guarantee
from other third party.

6.           In the event that any of the agreements between Party A and Party B
terminates or expires, Party A shall have the right, but not the obligation, to
terminate all agreements between Party A and Party B, including, but not limited
to, the Consulting Services Agreement.

7.           Any amendment to this Agreement shall be made in writing.  The
amendments duly executed by all Parties shall be deemed as a part of this
Agreement and shall have the same legal effect as this Agreement.

 
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8.           If any provision or provisions of this Agreement shall be held to
be invalid, illegal, unenforceable or in conflict with the laws and regulations
of the jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

9.           Party B and Party C shall not assign its rights and obligations
under this Agreement to any third party without the prior written consent of
Party A.  Party B and Party C hereby agree that Party A may assign its rights
and obligations under this Agreement if necessary and such transfer shall only
be subject to a written notice sent to Party B and Party C by Party A, and no
any further consent from Party B or Party C will be required.

10.         The Parties hereby acknowledge and ensure the confidentiality of all
oral and written materials exchanged relating to this Agreement.  No Party shall
disclose the confidential information to any other third party without the other
Party’s prior written approval, unless: (a) it was in the public domain at the
time it was communicated (unless it entered the public domain without the
authorization of the disclosing Party); (b) the disclosure was in response to
the relevant laws, regulations, or stock exchange rules; or (c) the disclosure
was required by any of the Party’s legal counsel or financial consultant for the
purpose of the transaction of this Agreement.  However, such legal counsel
and/or financial consultant shall also comply with the confidentiality as stated
hereof.  The disclosure of confidential information by employees or hired
institutions of any Party is deemed to be an act of such Party, and such Party
shall bear all liabilities of the breach of confidentiality.  If any provision
of this Agreement is found by a proper authority to be unenforceable or invalid,
such unenforceability or invalidity shall not render this Agreement
unenforceable or invalid as a whole.

11.         This Agreement shall be governed and construed in accordance with
PRC law.

12.         Arbitration.  Any dispute arising from, out of or in connection with
this Agreement shall be settled through amicable negotiations between the
Parties.  Such negotiations shall begin immediately after one Party has
delivered to the other Party a written request for such negotiation.  If, within
ninety (90) days following the date of such notice, the dispute cannot be
settled through negotiations, the dispute shall, upon the request of either
Party with notice to the other Party, be submitted to arbitration in China under
the auspices of China International Economic and Trade Arbitration Commission
(the “CIETAC”).  The Parties shall jointly appoint a qualified interpreter for
the arbitration proceeding and shall be responsible for sharing in equal
portions the expenses incurred by such appointment.  The arbitration proceeding
shall take place in Shanghai, China.  The outcome of the arbitration shall be
final and binding and enforceable upon the Parties.

 
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              12.1           Arbitration Language and Rules.  Unless otherwise
provided by the arbitration rules of CIETAC, the arbitration proceeding shall be
conducted in English. The arbitration tribunal shall be formed pursuant to the
arbitration rules of CIETAC. Party B, Party C and Party D shall be deemed as one
party in arbitration proceedings for purpose of the arbitration under this
Agreement. The arbitration tribunal shall apply the arbitration rules of the
CIETAC in effect on the date of execution of this Agreement.  However, if such
rules are in conflict with the provisions of this clause, or with Section 12 of
this Agreement, then the terms of Section 12 of this Agreement shall prevail.

              12.2           Cooperation; Disclosure. Each Party shall cooperate
with the other Party in making full disclosure of and providing complete access
to all information and documents requested by the other Party in connection with
such proceedings, subject only to any confidentiality obligations binding on
such Parties.

              12.3           Jurisdiction. Judgment or award rendered by the
arbitration may be entered into by any court having jurisdiction, or application
may be made to such court for a judicial recognition of the judgment or any
order of enforcement thereof.

13.         This Agreement shall be executed by a duly authorized representative
of each Party as of the date first written above and becomes effective
simultaneously.

14.         The Parties confirm that this Agreement shall constitute the entire
agreement of the Parties with respect to the subject matters therein and
supersedes and replaces all prior or contemporaneous verbal and written
agreements and understandings.

15.         TERM AND TERMINATION

              15.1           This Agreement shall take effect on the date of
execution of this agreement and shall remain in full force and effect for the
maximum period of time permitted by law unless sooner terminated pursuant to
Clause 15.2.
 
              15.2           This Agreement shall remain in full force and
effect for the maximum period of time permitted by law. The phrase “maximum
period of time permitted by law” shall mean the time period from the execution
date of this agreement to the last date of Party B’s operation term set forth in
its business license. If Party B’s operation term is extendible, Party B shall
use its best efforts to renew its business license and extend its operation term
until and unless otherwise instructed in Party A’s prior written notice. When
Party B’s operation term is extended, such time period shall be automatically
extended to the last date of Party B’s extended operation term as set forth in
its new business license. Notwithstanding the foregoing stipulation, Party A
shall have the right to terminate this Agreement at any time by giving a thirty
(30) day prior written notice to other Parties. During the effective term of
this Agreement, any Party except Party A shall have no right to terminate this
Agreement.

 
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              15.3           Party A shall have no liability to the other Party
for indemnity, compensation or damages arising solely from the exercise of such
termination right when Party A elects to terminate this Agreement pursuant to
Clause 15.2.  The expiration or termination of this Agreement shall not affect
the continuing liability of Party B to pay any Consulting Services Fees already
accrued or due and payable to Party A.  Upon expiration or termination of this
Agreement, all amounts then due and unpaid to Party A by Party B hereunder, as
well as all other amounts accrued but not yet payable to Party A by Party B,
shall hereby become due and payable by Party B to Party A.

16.         This Agreement has been executed in seven (7) duplicate originals in
both English and Chinese.  Each Party has received one (1) original, and all
originals shall be equally valid.

[SIGNATURE PAGE FOLLOWS]
 
 
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[SIGNATURE PAGE]

IN WITNESS WHEREOF this Agreement is duly executed by each Party or its legal
representatives.

PARTY A:
Zhejiang Jiuxin Investment Management Co., Ltd.
 
Legal/Authorized Representative: /s/ LIU Lei                
Name:  LIU Lei
Title:    Executive Director

 
PARTY B:
Zhejiang Jiuying Grand Pharmacy Co., Ltd.
 
Legal/Authorized Representative: /s/ LIU Lei                
Name:  LIU Lei
Title:    Executive Director

 
 
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SIGNATURE PAGE FOR PARTY C

 
Party C.
 
 
/s/ LIU Lei                           
LIU Lei

Owns 19.89% of Zhejiang Jiuying Grand Pharmacy Co., Ltd.
ID Card No.: 330107196310260910

/s/ JIN Chong’an                
JIN Chong’an

Owns 15.81% of Zhejiang Jiuying Grand Pharmacy Co., Ltd.
ID Card No.: 440102196306183258

/s/ QI Li                                
QI Li

Owns 15.3% of Zhejiang Jiuying Grand Pharmacy Co., Ltd.
ID Card No.: 330106197205090081
 
 
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SIGNATURE PAGE FOR PARTY D

Zhejiang Shouantang Medical Technology Co., Ltd.
Owns 39% of Zhejiang Jiuying Grand Pharmacy Co., Ltd.

Legal/Authorized Representative: /s/ LIU Lei                                   
Name:  LIU Lei
Title:    Executive Director
 
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