Unassociated Document


     

    
      Exhibit
10.39

      


      Distribution
Agreement for 2010

      


      


      
        	
                Seller: 

              	
                Jiangxi
      Jiangzhong Pharmaceutical Co., Ltd. (hereafter referred to as “Party
      A”)

              


      

      
        	
                Purchaser: 

              	
                Changchun
      Yongxin Dirui Medical Co., Ltd. (hereafter referred to as “Party
      B”)

              


      

      


      This
Distribution Agreement (the “Agreement”) is entered into by and between Party A
and Party B through negotiation.

      


      
        	
                I. 
        

              	
                Authorization

              


      

      


      
        	
                1. 
        

              	
                Party
      A hereby authorizes Party B to act as distributor of Party A’s products in
      Jilin Province. Party B shall provide Party A with necessary documentation
      such as the original and copies of Party B’s business license, drug
      distributor’s license, tax registration certificate, and other applicable
      items.

              


      

      


      
        	
                2. 
        

              	
                This
      Agreement is effective from January 4, 2010 to December 31,
      2010.

              


      

      


      
        	
                II. 
        

              	
                Duties
      and Obligations of Party A

              


      

      


      
        	
                1. 
        

              	
                Party
      A shall provide Party B with documentation showing that Party A’s products
      satisfy the quality standards required by the government. The parties
      shall enter into a Quality Guarantee
Agreement.

              


      

      


      
        	
                2. 
        

              	
                Party
      A shall deliver the products to Party B’s warehouse. Party A shall replace
      any products damaged during the transportation, without
      condition.

              


      

      


      
        	
                3. 
        

              	
                Party
      A shall take responsibility for advertising and promotion of the products
      and assist Party B with product
distribution.

              


      

      


      
        	
                III. 
        

              	
                Duties
      and Obligations of Party B

              


      

      


      
        	
                1. 
        

              	
                Payments
      shall be made prior to delivery of products. Party B shall pay by cash or
      money order that shall be valid for three
  months.

              


      

      


      
        	
                2. 
        

              	
                Party
      B shall distribute Party A’s products at the prices listed below. Party A
      may adjust the distribution price by giving written notice to Party
      B.

              


      

      


      
        	
                Product
      Name

              	
                Purchase
      Price Paid by Party B

              	
                Distribution
      Price Paid by Contract Customers

              	
                Distribution
      Price Paid by Non-contract Customers

              
	
                Jiangzhong
      Digestion Pills (for adults)

              	
                5.05

              	
                5.10

              	
                5.15

              
	
                Jiangzhong
      Digestion Pills (for children)

              	
                5.05

              	
                5.10

              	
                5.15

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (small)

              	
                4.00

              	
                4.05

              	
                4.10

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (green)

              	
                4.30

              	
                4.35

              	
                4.40

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (large)

              	
                3.80

              	
                3.85

              	
                3.90

              
	
                Liangsang
      Pangdahai Throat Lozenges

              	
                3.00

              	
                3.10

              	
                3.20

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                3. 
        

              	
                Party
      B may distribute Party A’s products outside Jilin Province but shall not
      distribute in Hebei Province, Shanxi Province, Guangdong Province and
      Anhui Province.

              


      

      


      
        	
                4. 
        

              	
                Party
      B shall not distribute to “prohibited customers” named by Party
      A.

              


      

      


      
        	
                5. 
        

              	
                Party
      B shall provide a report to Party A, at no charge, indicating the
      distribution of Party A’s products by the fifth day of each month. Party B
      shall also provide Party A with order tracking services at no
      charge.

              


      

      


      
        	
                6. 
        

              	
                Each
      purchase by Party B shall be no less than 800 units. Party A may refuse to
      sell if Party B purchases less than 800 units in a particular
      order.

              


      

      


      
        	
                7. 
        

              	
                The
      products in Party B’s inventory shall be no less than the minimum
      inventory set forth below:

              


      

      


      
        	
                Product
      Name

              	
                Minimum
      Inventory

              
	
                January
      – May /

                 September
      – December

              	
                June
      - August

              
	
                Jiangzhong
      Digestion Pills (for adults)

              	
                150

              	
                130

              
	
                Jiangzhong
      Digestion Pills (for children)

              	
                100

              	
                80

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (small)

              	
                80

              	
                60

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (green)

              	
                30

              	
                20

              
	
                Jiangzhong
      Fufang Cao Shan Hu Pills (large)

              	
                N/A

              	
                N/A

              
	
                Liangsang
      Pangdahai Throat Lozenges

              	
                15

              	
                10

              


      

      


      
        	
                8. 
        

              	
                Party
      B shall limit sales to non-contract customers according to the sales limit
      set by Party A and Party B through further
  consultation.

              


      

      


      
        	
                9. 
        

              	
                Party
      B shall pay the downstream distributor’s information service fee within 20
      business days upon receipt of Party A’s confirmation in
      writing.

              


      

      


      
        	
                10. 
        

              	
                Party
      B shall not pay cash to any of Party A’s employees unless otherwise
      permitted by Party A.

              


      

      


      
        	
                11. 
        

              	
                Party
      B shall not sell counterfeit versions of Party A’s products; otherwise,
      Party A shall have the right to terminate this
  Agreement.

              


      

      


      
        	
                12. 
        

              	
                Party
      B’s retail stores shall not sell Party A’s products below the lowest
      retail price set by Party A, or at a discounted price or membership price
      to customers.

              


      

      


      
        	
                IV. 
        

              	
                Sales
      Discount

              


      

      


      
        	
                1. 
        

              	
                Party
      A shall pay rebates to Party B as
follows:

              


      

      


      
        	
                (1) 
        

              	
                Party
      A shall pay a rebate of 3.0% of Party B’s quarterly purchase amount of
      products sold to contract
customers.

              


      

      
        	
                (2) 
        

              	
                Party
      A shall pay a rebate of 5.5% of Party B’s quarterly purchase amount of
      products sold to non-contract
customers.

              


      

      


      
        	
                2. 
        

              	
                The
      rebate is payable on a quarterly
basis.

              


      

      


      
        	
                3. 
        

              	
                The
      rebate must be set forth on the
invoice.

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                V. 
        

              	
                Orders

              


      

      


      The
parties shall sign each order before delivery of products.

      


      
        	
                1. 
        

              	
                Party
      B shall pay the amount indicated on the purchase order before Party A
      delivers the products.

              


      

      


      
        	
                2. 
        

              	
                Party
      A shall deliver the products on the date indicated in the order, however,
      a 3-day grace period for late delivery due to transportation issues is
      permitted.

              


      

      


      
        	
                VI. 
        

              	
                Miscellaneous

              


      

      


      Any
unsettled matter under this Agreement is subject to further negotiation and
agreement between the parties. Any dispute arising from the execution and
performance of this Agreement shall be resolved through negotiation. If no
resolution can be reached through negotiation and mutual agreement, the dispute
may be submitted to a court of law at Party A’s location.

      


      This
Agreement is executed into two duplicate originals. Each party shall hold one
duplicate original. This Agreement is effective from the execution date to
December 31, 2010.

      


      


      
        	
                Party
      A: 

              	
                /s/
      [signature of authorized
representative]

              


      

      Jiangxi
Jiangzhong Pharmaceutical Co., Ltd. (corporate seal)

      


      
        	
                Party
      B: 

              	
                /s/
      [signature of authorized
representative]

              


      

      Changchun
Yongxin Dirui Medical Co., Ltd. (corporate seal)

      


      


      Date:
January 4, 2010