昆明圣火药业(集团)有限公司—合资
                  经营合同

              


      

    

     

    Exhibit
      10.9

    
 

    Kunming
      Shenghuo Pharmaceutical Group Co., Ltd

    


    


    


    


    


     

     

     

    
      
        

      



     

     

    Joint
      Venture Agreement

     

     

     

    
      
        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        
          	
                  昆明圣火药业(集团)有限公司—合资
                    经营合同

                


        

      

       
Catalog

     

    
      	
               

            	 条  	
              页 次

            
	 	 	 
	
              Article
                1

            	
              General
                Principles

            	
              1

            
	 	 	 
	
              Article
                2

            	
              Contract
                Parties

            	
              1

            
	 	 	 
	
              Article
                3

            	
              Definitions

            	
              1

            
	 	 	
               

            
	
              Article
                4

            	
              Establishment
                of the CJV

            	
              2

            
	 	 	 
	
              Article
                5

            	
              Business
                Scope and Size of the CJV

            	
              3

            
	 	 	 
	
              Article
                6

            	
              Total
                Investment and Registered Capital

            	
              3

            
	 	 	 
	
              Article
                7

            	
              Responsibilities
                of the Parties

            	
              6

            
	 	 	 
	
              Article
                8

            	
              Mutual
                Statement and Guarantee

            	
              7

            
	 	 	 
	
              Article
                9

            	
              The
                Board of Director

            	
              8

            
	 	 	
               

            
	
              Article
                10 

            	
              Management
                Organization

            	
              11

            
	 	 	 
	
              Article
                11

            	
              LABOR
                MANAGEMENT

            	
              12

            
	 	 	 
	
              Article
                12

            	
              LABOR
                UNION

            	
              13

            
	 	 	 
	
              Article
                13

            	
              Accounting,
                Auditing And Other Financial Affairs

            	
              13

            
	 	 	 
	
              Article
                14

            	
              TAXES

            	
              15

            
	 	 	 
	
              Article
                15

            	
              CONFIDENTIALITY

            	
              15

            
	 	 	 
	
              Article
                16

            	
              TIME
                LIMIT

            	
              16

            
	 	 	 
	
              Article
                17

            	
              TERMINATION,
                MERGE AND LIQUIDATION

            	
              17

            
	 	 	 
	
              Article
                18 

            	
              THE
                HANDLING OF THE ASSETS AFTER THE EXPIRATION OF THE JOINT
                VENTURE

            	
              18

            
	 	 	 
	
              Article
                19 

            	
              INSURANCE

            	
              19

            
	 	 	 
	
              Article
                20

            	
              LIABITITIES
                FOR BREACH OF CONTRACT

            	
              19

            
	 	 	 
	
              Article
                21

            	
              FORCE
                MAJEURE

            	
              19

            
	 	 	 
	
              Article
                22

            	
              APPLICABLE
                LAW

            	
              20

            
	 	 	 
	
              Article
                23

            	
              SETTLEMENT
                OF DISPUTES

            	
              20

            
	 	 	 
	
              Article
                24

            	
              MISCELLANEOUS
                PROVISIONS

            	
              21

            
	 	 	 
	 	
              Signature

            	
              22

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        
          
            	
                    昆明圣火药业(集团)有限公司—合资
                      经营合同

                  


          

        

      

    

     

    Article
      1: General Principles

     

    
      	1.1	
              In
                accordance with the Law of the People’s Republic of China on
                Chinese-Foreign Join Ventures, and other relevant law and regulations
                in
                People’s Republic of China, LAN’S INT’L MEDICINE INVESTMENT CO., LIMITED
                and SDIC Venture Capital Investment, Co., Ltd., ,agree to found a
                Joint
                Venture at Kunming, Yunnan Province,
                China.

            


    

     

    Article
      2: Contract Parties

     

    
      	2.1	
              The
                parties of the contract: 

            


    

     

    
      
        	
              	A.	
                LAN’S
                  INT’L MEDICINE INVESTMENT CO., LIMITED (hereafter referred as "Party
                  A"),
                  a register corporation in Hongkong. The
                  registered address is UNIT 2E, 2/F., RIGHT EMPEROR COMMERCIAL BUILDING,
                  122-126 WELLINGTON STREET, CENTRAL,
                  HONGKONG.

              


      

    

    Legal
      representative of the company: Lan Gui Hua .

    Position:
      Chairman of the Board

    Nationality:
      Chinese

    


    
      
        	
              	B.	
                SDIC
                  Venture Capital Investment, Co., Ltd (hereafter referred as "Party
                  B"), a
                  register company in Beijin,China. 

                The
                  registered address is: International Investment Building ,No6-6,
                  North
                  street,Fu cheng men, Western city district,
                  Beijing

              


      

    

    Legal
      representative of the company: Deng Hua

    Position:
      Vice General Manager

    Nationality:
      Chinese

    


    Article
      3: Definitions

     

    Unless
      the terms or context of this Contract provide otherwise, the following terms
      shall have the meaning set forth below:

     

    
      
        	3.1.	
                "Relevant
                  Company"
                  means any corporation, which is directly/indirectly controlled
                  by
                  each/both contract parties. The "controlled" means the parties
                  have more
                  than 50% voting share or registered
                  capital.

              


      

       

      
        	3.2.	
                "article"
                  means the Joint Venture Article signed by the Parties and approved
                  by the
                  authorities together with this contract


              


      

       

      
        	3.3.	
                "Board
                  of Directors"
                  means the board of director of the
                  Cooperative
                  Joint Venture.

              


      

       

      
        	3.4.	
                "Business
                  License"
                  means the Cooperative Joint Venture’s business license, which is issued by
                  the State Administrate Bureau of Industry and Commerce or local
                  administrative bureau for industry and
                  commerce.

              


      

       

      
        	3.5.	
                "The
                  Contract Period"
                  means the contract period expressed in Article
                  16.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          
            
              
                	
                        昆明圣火药业(集团)有限公司—合资
                          经营合同

                      


              

            

             

          

        

      

      
        
          	3.6.	
                  "Effective
                    Date"
                    means the date of the contract to be effective, namely the date
                    on which
                    this Contract is approved by the relevant authority
                    

                


        

      

       

      
        	3.7.	
                "The
                  Approval Authority"
                  means the Ministry of Foreign Trade and Economic Committee, or
                  its
                  relevant local division or any government institution or agency
                  empowered
                  to approve this Contract.

              


      

       

      
        	3.8.	
                "Force
                  Majeure"
                  includes, but is not limited to, acts of God, war, terrorism, civil
                  commotion, riot, blockade or embargo, delays of carriers, fire,
                  explosion,
                  labor dispute, casualty, accident, earthquake, epidemic, flood,
                  windstorm,
                  or by reason of any law, order, proclamation, regulation, ordinance,
                  demand, expropriation, requisition or requirement or any other
                  act of any
                  governmental authority, including military action, court orders,
                  judgments
                  or decrees, or any other cause beyond the reasonable control of
                  the
                  affected party, whether or not
                  foreseeable.

              


      

       

      
        	3.9.	
                "
                  Joint Venture"
                  (hereafter referred as "CJV") means the Chinese-Foreign Joint Venture,
                  which is found by both parties pursuing to this
                  contract.

              


      

       

      
        	3.10.	
                "The
                  Regulations"
                  mean the Regulations for the Implementation of the Law of the People's
                  Republic of China on Joint Ventures Using Chinese and Foreign
                  Investment.

              


      

       

      
        	3.11.	
                "The
                  Labour Law"
                  means Labour Law of the Peoples Republic of China and the relevant
                  Chinese
                  statute and ordinance.

              


      

       

      
        	3.12.	
                "Manager"
                  means the General Manager of the CJV and the other managers who
                  are
                  directly responsible to the General
                  Manager.

              


      

       

      
        	3.13.	
                "Party"
                  mans any party in Article 2.1

              


      

       

      
        	3.14.	
                "The
                  Third Party"
                  means the other natural person, corporation, organization and any
                  entities, which are relevant to this
                  contract.

              


      

       

      
        	3.15.	
                "The
                  Three Funds"
                  means the reserve fund, development fund, employee bounty and weal
                  fund
                  which is pursuant to Joint Venture
                  Contract.

              


      

    

     

     Article
      4: Establishment of the CJV 

     

    
      	4.1	
              Shenghuo
                China was formed on Oct. thirteenth, 1995 in Kunming,Yunnan province,
                China with an initial capitalization of approximately RMB64,000,000,
                with
                Kunming Nanguo Biology Source Development Institute ("Nanguo") owning
                approximately 93.75% of its outstanding equity interests and SDIC
                Venture Capital Investment, Co., Ltd
                owning approximately 6.25% of its equity interests. In May, 2006,
                Nanguo
                transferred its 93.75% interest to Party A (Lan’s Int’l Medicine
                Investment Co., Ltd., a company formed under the laws of Hong Kong
                ("LIMI")).After that, since Party A owed 93.75% and Party B owed
                6.25%,
                Shenghuo
                China was restructured into Chinese Foreign Equity Joint Venture
                under the
                laws of the PRC,

            


    

     

    
      	4.2	
              The
                Chinese name of the CJV is " 昆明圣火药业(集团)有限公司 " the
                English name is Kunming
                Shenghuo Pharmaceutical
                Group Co., Ltd."

            


    

     

    
      
        
        

      

      
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                  昆明圣火药业(集团)有限公司—合资
                    经营合同

                


        

      

       

    

    
      	4.3	
              The
                registered address is No.2,Jinyou Road, Economic Development District,
                Kunmig City, Yunnan Province,China

            


    

     

    
      	4.4	
              The
                CJV may establish branches inside/outside China after approved by
                both the
                Board of Director and relevant government
                authority

            


    

     

    
      	4.5	
              The
                CJV is a legal entity pursuant to Chinese law. All the activity of
                the CJV
                should follow the provision of the law, statutes of China and relevant
                ordinance.

            


    

     

    
      
        	4.6	
                The
                  CJV is a limited liability company. Each party bears the responsibility
                  to
                  the company with the limit of the amount of Registered Capital
                  according
                  with Article 6. The creditors to the CJV have recourse to the CJV’s
                  assets, but not the Parties. Each party hereby shares the profit,
                  bears
                  the losses and risk according to its percentage of the registered
                  capital
                  .

              


      

    

     

    Article
      5: Business Scope and Size of the CJV 

     

    
      	5.1	
              The
                purpose of the CJV is to further the understanding of Chinese market,
                develop Chinese medical industry and techniques in relevant fields,
                make
                the communication and cooperation between China and aboard deeper
                and spur
                the economic growth of Kunming city


            


    

     

    
      	5.2	
              The
                business scope of the CJV: Production and sale of hard capsule、soft
                capsule, powder、liquid,
                tablet, Cosmetic
                Products、healthy
                food processing、self-made
                good, and import and export business(excluding the import and distributing
                business)(operating the company according to business
                scope)

            


    

     

    Article
      6: Total Investment and Registered Capital

     

    
      
        	6.1	
                The
                  total investment of the CJV is RMB 128,000,000; the registered
                  capital is
                  RMB 64,000,000.

              


      

    

     

    
      
        	6.2	
                The
                  proportion of registered capital contributed by each party as follows:
                  

              


      

    

     

    
      	
            	1.	
              Party
                A: RMB60,000,000, 93.75% of the registered capital;
                

            


    

     

    
      	
            	2.	
              Party
                B: RMB 4,000,000, 6.25% of the registered
                capital.

            


    

     

    
      
        	6.3	
                The
                  ways of contributing investment of each party:


              


      

    

     

    
      	
            	1.	
              Party
                A: should pay 60% of its share in 6 months after the CJV Business
                License
                issued, and pay the remainder within one year.
                

            


    

     

    
      	
            	2	
              Party
                B: contribute its asset by original share hold in the original
                company

            


    

     

    
      	6.4	
              Whenever
                any party pays the contribution to the CJV, the Board of Director
                should
                immediately engage a Chinese registered accountant to audit the
                contribution, and issue an audit report in 60 days. Thereafter, according
                with format and content of the CJV Contract, the CJV should give
                the party
                a contribution certificate with signature of the Chairman of the
                Board and
                the stamp of the CJV in 30 days after receiving the financial report.
                And
                also submit a counterpart to relevant government authority. The General
                Manager should keep all the financial reports and the counterpart
                of the
                issued contribution certificate

            


    

     

    
      
        
        

      

      
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                    昆明圣火药业(集团)有限公司—合资
                      经营合同

                  


          

        

         

      

    

    
      	6.5	
              Alteration
                and addition the registered capital of the CJV should be agreed by
                both
                parties, be unanimous voted by the Board of Director, and be ratified
                by
                the examination and approval authority. After received the approval,
                the
                CJV should register the alteration to administrative bureau for industry
                and commerce

            


    

     

    
      	6.6	
              The
                Article 6.6 applies to alter the registered capital to the
                CJV

            


    

     

    
      	
            	(1)	
              In
                according with the regulation below, each party hereby have preemptive
                right when another party is going to transfer all/part of registered
                capital 

            


    

     

    
      
        	
              	(a)	
                When
                  the party (hereafter referred as "Transferor") which is going to
                  transfer
                  all/part of registered capital, it should give a written notice
                  (hereafter
                  referred as "transfer notice") to another party to clarify the
                  identity of
                  prospective
                  transfereeôthe
                  rights to be transferredôtransfer
                  price and the other terms and conditions. The transfer notice became
                  an
                  irrevocable offer. Namely, the transferor will transfer its all/part
                  of
                  right with the price and the term and condition expatiated in the
                  transfer
                  notice.

              


      

    

     

    
      
        	
              	(b)	
                Another
                  party can hereby give a written notice (hereafter referred as "purchasing
                  notice") to preemptive purchase the all/part transferred rights
                  and
                  interests not later than 60 days after received the transfer notice.
                  In
                  this period, according with the party reasonable requirement, the
                  Transferor should immediately provide the relevant information
                  of
                  operation and financial status to prospective
                  transferee
                  to
                  help it decide whether using its preemptive
                  right.

              


      

    

     

    
      
        	
              	(c)	
                If
                  the party in paragraph (b) send out the purchasing notice for the
                  whole or
                  part of the transferred right in sixty days, the Transferor should
                  sign
                  transferring contract with it and assist with the procedures of
                  getting
                  approval and modification of registered capital。

              


      

    

     

    
      
        	
              	(d)	
                If
                  anther party do not issue the purchasing notice in 60 days under
                  Article
                  6.6 (b), the transferor can hereby transfer all/part rights and
                  interests
                  to prospective
                  transferee with
                  the price not less than its in transfer notice. In addition, the
                  terms and
                  the condition should not excel in transfer
                  notice.

              


      

    

     

    
      
        
        

      

      
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                    昆明圣火药业(集团)有限公司—合资
                      经营合同

                  


          

        

         

      

    

    
      
        	
              	(e)	
                Transferorshould
                  notice the finial transferring term and condition to another party
                  in
                  written notice in 2 days after transferee signed the transfer contract.
                  If
                  the transferee does not apply the transfer to examination and approval
                  authority in 30 days after signed transferring contract, the transferee
                  should according to Article 6.6 (1) t rerun the procedure before
                  it
                  transfer its any registered capital rights and
                  interests.

              


      

    

     

    
      	
            	(2)	
              In
                contract period, each party can transfer its all/part of rights and
                interests to the registered capital of the CJV to any relevant company
                at
                any time. After apply the original examination and approval authority,
                the
                company should also register the alteration. The party hereby gives
                up its
                preemptive right to another.

            


    

     

    
      	
            	(3)	
              The
                party which transfers its rights and interests to it registered capital
                of
                the CJV should make sure the transferee to sign a effectual document,
                and
                then make the transferee to be one party of this contract restricted
                by
                the term and condition in this contract as the other contract
                party.

            


    

     

    
      	
            	(4)	
              Each
                party should especial agree the article 6.9 to transfer the register
                capital, and further regard the Board of Director is going to agree
                the
                these transfer. To achievement this transfer, each party agree to
                quickly
                take any action to support the legal requirement, to sign any document
                as
                legal requirement, and urge the member of the Board quickly adopt
                these
                action above and singing document above. Registered Capital transfer
                should be approved by examination and approval authority. After received
                the approval, the CJV should register the alteration to administrative
                bureau for industry and commerce.

            


    

     

    
      	6.7	
              To
                support the balance between the total investment and registered capital,
                the CJV can apple loan form outside China financial organization
                or both
                parties provide shareholder loan. If both parties provide the shareholder
                loan, each party should provide the loan pursuant to the proportion
                in the
                CJV. If the lender require loan guarantee, both party should consult
                whether agree and what condition to provide the
                guarantee.

            


    

     

    
      	6.8	
              Without
                prior written notice from any party, the CJV cannot hypothecate and
                pledge
                all/part of registered capital to the CJV, or using the other means
                to set
                the credit to the registered capital, except the normal lien (the
                normal
                lien is the lien which is set by legal require to any holding entity,
                such
                as tax lien, or the lien which is set according to sponsored
                documents to
                the total asset (however do not nominated which asset
                is))

            


    

     

    
      
        
        

      

      
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                    昆明圣火药业(集团)有限公司—合资
                      经营合同

                  


          

        

         

      

    

    Article
      7: Responsibilities of the Parties

     

    
      
        	7.1	
                Except
                  the other obligation set in this contract, both parties should
                  fulfill the
                  responsibility set at below:

              


      

       

      
        	
              	1.	
                Party
                  A Liability:

              


      

       

      
        	
              	(1)	
                Assist
                  the CJV to attribute its asset to
                  CJV.

              


      

       

      
        	
              	(2)	
                Assisting
                  the CJV to engage part-time or fulltime foreign employees and technical
                  professors

              


      

       

      
        	
              	(3)	
                Assisting
                  the CJV to get the visa for staffs and boards
                  abroad

              


      

       

      
        	
              	(4)	
                Assisting
                  the CJV to decide the banks at home and abroad and get loans of
                  foreign
                  currency from the bank abroad 

              


      

       

      
        	
              	(5)	
                Assisting
                  the CJV to improve economic performance and ability of earning
                  profit
                  adhered to the faith principle

              


      

       

      
        	
              	(6)	
                Assisting
                  the CJV to transact other commission from the Board of
                  Director.

              


      

       

      
        	
              	2.	
                Party
                  B Liability:

              


      

       

      
        	
              	(1)	
                Attribute
                  its asset to CJV;

              


      

       

      
        	
              	(2)	
                Assisting
                  the CJV with party A to apply any license and permission which
                  is required
                  to the CJV, including but not limit to the approval, business license
                  

              


      

       

      
        	
              	(3)	
                Assisting
                  the CJV to apply any license and permission which is required to
                  the
                  CJV

              


      

       

      
        	
              	(4)	
                Assisting
                  the CJV to achieve and recommend exchange register, and the other
                  ratification which can hereby have the means to balance foreign
                  exchange
                  under Chinese law and regulation

              


      

       

      
        	
              	(5)	
                Assisting
                  the CJV develop potential Chinese clients to gain new
                  business

              


      

       

      
        	
              	(6)	
                Assisting
                  the CJV to make the water, electricity power and road available
                  for the
                  location of the CJV

              


      

       

      
        	
              	(7)	
                According
                  to relevant Chinese law, administrative law, local regulations
                  assisting
                  the CJV to apply reasonable preferential tax and other investment
                  encouragement.

              


      

       

      
        
          	
                	(8)	
                  Assisting
                    the CJV to harmonize the relationship between the CJV and local
                    government. 

                


        

      

       

      
        	
              	(9)	
                Assisting
                  the CJV with the procedures of importing and declaring goods (including
                  getting the necessary allowance and license


              


      

       

      
        	
              	(10)	
                Assisting
                  the foreign employees in Part A and CJV with visa, working certificate
                  and
                  residence permit

              


      

       

      
        	
              	(11)	
                Assisting
                  the CJV to hire managers, technical staffs and common workers when
                  it
                  requires

              


      

       

      
        	
              	(12)	
                Assisting
                  the CJV to get the RMB and foreign currency loan from domestic
                  financial
                  institution. 

              


      

      
         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                	
                        昆明圣火药业(集团)有限公司—合资
                          经营合同

                      


              

            

             

          

        

      

      
        	
              	(13)	
                Assisting
                  the CJV to improve economic performance and ability of earning
                  profit
                  adhered to the faith principle

              


      

       

      
        	
              	(14)	
                Assisting
                  the CJV with free of tax reporting procedures of importing equipments
                  in
                  the scope of its investment

              


      

       

      
        	
              	(15)	
                Assisting
                  the CJV to transact other commission from the Board of
                  Director.

              


      

       

      Both
        parties agree to fulfill its liability listed in article 7.

    

     Article
      8: Mutual Statement and Guarantee

     

    
      
        	8.1	
                Each
                  party especial declare and ensure the data of the signing the contract
                  and
                  the effective data:

              


      

    

     

    
      	
            	(1)	
              According
                with the law at the place of establishment or the place of registration,
                the party should be found legally, legal exist and accord  with any
                regulation.

            


    

     

    
      	
            	(2)	
              According
                with the relevant law and statutes, the party has achieved any requiring
                procedures and necessary approval, and then has the rights to sign
                the
                contract and fulfill the liability in this
                contract

            


    

     

    
      	
            	(3)	
              The
                party has adopted all the necessary internal action to support it
                to
                achieve the rights to sign and fulfill the contract. the representation
                who sign this contract has been authorized by its party to sign this
                contract, and then the party is hereby restricted by this
                contract.

            


    

     

    
      	
            	(4)	
              Since
                the data of the contract come into force, the contract hereby bring
                legal
                binding force to the party。

            


    

     

    
      
        	
              	(5)	
                The
                  party signing the contract and fulfilling the liability in the
                  contract
                  should not against any provision pursuant to the following terms,
                  or
                  induce it to breach any regulation, or induce it to not fulfill
                  any
                  article, internal regulation, any law, statutes, regulation, any
                  authorization and approval from office or department, or any contract
                  and
                  contract which the part set to inhibit another
                  party.

              


      

    

     

    
      	
            	(6)	
              The
                Party does not have (as the Party know) any lawsuit, arbitration,
                and the
                other legal or administrative proceeding or office inquisition in
                the
                procedure, and then affect its ability to sign and fulfill the
                contract.

            


    

     

    
      	
            	(7)	
              The
                party shall reveal all the holding information which maybe affect
                founding
                the CJV and further running the business, or might bring negative
                effect
                to another party’s will to sign the contract if it is revealed. In
                addition, the information provided to another party do not have any
                materially disloyalty and misleading presentation.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            
              	
                      昆明圣火药业(集团)有限公司—合资
                        经营合同

                    


            

          

           

        

      

    

    
      	
            	(8)	
              If
                any party breaches the statement and promises in Article 8.1, the
                defaulting party shall compensate any loss, damage and claim (involving
                but not limited its relevant interest and reasonable attorney fee)
                hereby
                bring to observant party.

            


    

     

    Article
      9: The Board of Director

     

    
      	9.1	
              The
                Board of Director will be established at the data of business license
                issued. The Board of Director has the highest authority of the
                CJV.

            


    

     

    
      	9.2	
              The
                Board shall consist of 5 Directors, of whom 4 shall be appointed
                by Party
                A, and 1 shall be appointed by Party B. Each Director shall be appointed
                with written certificate of appointment. The term of appointment
                is 3
                years. Any party may at any time remove and replace the director
                appointed
                by it, with written notice to the other shareholders, and may serve
                consecutive terms if reappointed by the Party. If a set on the Board
                in
                vacated due to the retirement, resignation, illness, disability or
                death
                of a Director, the Part, which originally appointed such Director,
                shall
                appoint a successor to sever out such Director’s term with written notice
                to other shareholder.

            


    

     

    
      	9.3	
              The
                Board shall have one Chairman appointed by Party A. The Chairman
                of the
                Board shall be the legal representative of the CJV. When the chairman
                is
                unable to perform his or her responsibilities, he/she shall designate
                another Director to temporarily represent the
                CJV.

            


    

     

    
      	9.4	
              One
                party accredits or removes the Director and appoint or replace the
                Chairman of the Board should notice to the other shareholder party
                in
                written. When the parties receive the notice, the Directors/ the
                Chairman
                of the Board appointed or removed shall hereby be effective. According
                with the Law, those accreditation, appointment, remove, replacement
                should
                be recorded in related examination and approval authorities and be
                registered with Administrative Bureau For Industry And Commerce which
                are
                in charge.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      
         

        
          
            
              
                	
                        昆明圣火药业(集团)有限公司—合资
                          经营合同

                      


              

            

          

        

      

    

     

    
      	9.5	
              The
                CJV has duty to the claim for compensation and the liability, which
                the
                Directors made for running the CJV, when those claim for compensation
                and
                liability do not be made with intentional failure of good behavior,
                fearful negligence or intentional break criminal
                law.

            


    

     

    
      	9.6	
              The
                first board meeting shall be held in 1 month after the Business License
                issued. Thereafter, board meeting shall be held at lest one time
                each
                year. Upon the written request of two or more Directors of the CJV
                specifying the matters to be discussed, the Chairman of the Board
                shall
                within 30 days convene an interim meeting of the
                Board.

            


    

     

    
      	9.7	
              To
                convene a meeting of the Board, the Chairman of the Board shall notify
                each director in written notice not later than 15 days before the
                meeting.
                The content of the notice should involve the time, location and the
                agenda
                of the meeting. The Chairman of the Board shall list all the matter
                as any
                director requirement in the agenda. Under the situation that any
                director
                does not to be convened appropriately, the board meeting is hereby
                held
                without efficacy, except the director give a notice to give up his/her
                rights before the meeting. The board meeting can be held at the location
                of the CJV’s registered address or the other location inside China decided
                by the Chairman of the Board. The Chairman of the Board also decides
                the
                agenda of the meeting convene and emcee the
                meeting.

            


    

     

    
      	9.8	
              Four
                Directors or their authorized representatives can make up of the
                legal
                attendance for all the Board Meeting. For all the suitable call up
                meeting, it the directors or their representatives are less than
                four
                persons therefore not make up the legal attendance, the Chairman
                shall
                notice all the directors 30 days advance for calling up another meeting.
                Each party shall ensure their directors personally or authorized
                representative presents all the suitable call up boards
                meeting.

            


    

     

    
      	9.9	
              If
                the director can’t attend the Meeting, he/she shall authorize a
                representative with an authorization letter to attend the meeting.
                The
                authorized representative has the same power & right as his/her
                authorizer. After being authorized, A person can representative at
                least
                one Director.

            


    

     

    
      	9.10	
              The
                Board will take the completed and accuracy records for all its meeting.
                The Board shall have all records in both Chinese and English for
                all the
                Directors who vote positive to the paper to sign on the meeting.
                The
                record Paper of Board Meeting shall be distributed to all the Directors
                within 15 days after the date of meeting. Directors who wish to modify
                or
                supplement the records, shall summit their options to Chairman by
                writing
                within 7 days after they receive the records (no more modify or
                supplements for the paper signed on the meeting.). Chairman shall
                finish
                and sign the record (the one will be the final version) , then distribute
                to each Director and each party after 30 days of the Meeting. The
                Joint
                Venture shall save all Board Meeting Records in Disk for both parties
                and
                their authorized representatives to access
                freely.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      
        
           

          
            
              
                
                  	
                          昆明圣火药业(集团)有限公司—合资
                            经营合同

                        


                

              

            

          

        

      

       

    

    
      
        
          	
                  9.11

                	
                  The
                    Board of Directors makes decisions on or approve all the major
                    issues of
                    The Joint Venture, including but not limited
                    to:

                


        

      

    

     

    
      	
            	(1)	
              to
                amend The Articles of Association of the
                company;

            


    

     

    
      	
            	(2)	
              to
                merge with another economic
                association;

            


    

     

    
      	
            	(3)	
              to
                dissolve or terminate the joint
                venture

            


    

     

    
      	
            	(4)	
              to
                increase, assign or reduce the registered capital of the joint
                venture;

            


    

     

    
      	
            	(5)	
              to
                invest to any other company or enterprise by the joint
                venture;

            


    

     

    
      	
            	(6)	
              to
                establish the branches or other business
                places;

            


    

     

    
      	
            	(7)	
              to
                sign, amend or terminate all the contracts with the value above USD
                4
                million between or among the joint venture and any shareholder
                or
                the relevant company;

            


    

     

    
      	
            	(8)	
              the
                amount of the distributed profit after tax to both parties in any
                financial year, according to article
                13.12

            


    

     

    
      	
            	(9)	
              the
                amount of three funds drawn every fiscal year and any expense from
                the
                three funds;

            


    

     

    
      	
            	(10)	
              to
                sell or purchase any fixed asset or real estate with the value over
                USD0.1million or the same value in other
                currency;

            


    

     

    
      	
            	(11)	
              the
                annually and long term production plan, sale and promotion plan,
                the basic
                constructive plan, research and development plan, financing plan,
                budget and tax application sheet and audited financial
                report;

            


    

     

    
      	
            	(12)	
              to
                sign the commerce contract about unusual business with the value
                over USD1
                million or the same value in other
                currency;

            


    

     

    
      	
            	(13)	
              the
                loan over USD0.5 million or the same value in other
                currency;

            


    

     

    
      	
            	(14)	
              any
                guaranty or loan provided by the joint
                venture;

            


    

     

    
      	
            	(15)	
              to
                establish the basic branch structure of the joint venture, the
                administrative posts beyond the contract
                included;

            


    

     

    
      	
            	(16)	
              the
                internal policy and the main regulations and systems of the joint
                venture;

            


    

     

    
      	
            	(17)	
              the
                appointment, dismissal, reward and welfare of the administrative
                persons;

            


    

     

    
      	
            	(18)	
              to
                engage the external accountant, auditor and legal
                consultant;

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            昆明圣火药业(集团)有限公司—合资
                              经营合同

                          


                  

                

              

            

          

        

         

      

    

    
      	
            	(19)	
              to
                open a bank account and appoint the person to
                sign;

            


    

     

    
      	
            	(20)	
              to
                assume any litigation or arbitration by the joint venture and settle
                any
                legal request of the joint
                venture;

            


    

     

    
      	
            	(21)	
              to
                approve and terminate any administrative service
                contract

            


    

     

    
      	9.12	
              All
                the following resolutions must be adopted by all the directors who
                are at
                present in person or entrust the representative to attend the directors’
                meeting before they shall be made.

            


    

     

    
      	
            	(1)	
              to
                amend the articles of the
                association;

            


    

     

    
      	
            	(2)	
              to
                merge with another economic
                association;

            


    

     

    
      
        	
              	(3)	
                to
                  dissolve the joint venture or terminate its business;
                  

              


      

    

     

    
      	
            	(4)	
              to
                increase, assign or reduce the registered capital of the joint
                venture;

            


    

     

    
      	
            	(5)	
              to
                approve or terminate any administrative service contract;
                

            


    

     

    
      	9.13	
              The
                other resolutions except the above must be adopted by at least half
                the
                directors who are at present in person or entrust the representative
                to
                attend the directors’ meeting before they shall be
                made.

            


    

     

    
      	9.14	
              If
                all the directors present at that time to sign any resolution in
                written
                form, the resolution can be adopted through telephone meeting or
                no
                meetings by the board of directors. The above resolutions shall be
                saved
                disk together with the meeting records and have the same validity
                with the
                ones adopted at the directors’
meetings

            


    

     

    
      	9.15	
              The
                directors have no reward for their post. Otherwise, their reasonable
                fees
                (included but not limited to travel expenses) arising from the performance
                of their duties shall be paid by the joint
                venture

            


    

     

    ARTICLE
      10 Management Organization 

     

    
      	10.1	
              The
                joint venture shall establish its management organization to manage
                its
                business and decide on the terms and conditions of the management
                service
                and together with the regulations of the use of the management organs.
                

            


    

     

    
      	10.2	
              The
                management organs are led by the general manager, who shall be appointed
                or dismissed by the board of directors and responsible to the board
                of
                directors directly. The joint venture shall have a
                vice-general manager, general
                chartered accountant and other branch managers, who shall be all
                appointed
                or dismissed by the board of directors and responsible to the general
                manager.

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            
              
                
                  
                    
                      	
                              昆明圣火药业(集团)有限公司—合资
                                经营合同

                            


                    

                  

                

              

            

          

        

      

    

     

    
      	10.3	
              The
                general manager shall be responsible for the management of the daily
                business and execute all the affairs entrusted by the board of
                directors.

            


    

     

    
      	10.4	
              Unless
                the consent of the board of directors, the general manager and all
                the
                other administrative persons shall not concurrently serve as managers
                of
                any other companies or enterprises, shall not serve as directors,
                consultants or have any interests in any other competitive companies
                or
                enterprises.

            


    

     

    
      	10.5	
              The
                joint venture shall establish the basic department structure, other
                administrative persons not listed in this contract included. As for
                the
                establishment of other than the organizational structure and its
                administrative persons of the joint venture, its details shall be
                decided
                on the board of directors.

            


    

     

    ARTUCLE
      11 LABOR MANAGEMENT

     

    
      	11.1	
              The
                enrollment, dismissal, resignation, salary and welfare etc. of the
                joint
                venture shall be handled in accordance with law. The labor policy
                and
                regulations shall be approved by the board of directors and executed
                or
                supervised by the general manager.

            


    

     

    
      	11.2	
              The
                employees outside the administrative persons of the joint venture
                shall be
                employed in accordance with the terms of the individual labor contract.
                The administrative persons shall be employed in accordance with the
                terms
                of the individual labor contract approved by the board of
                directors.

            


    

     

    
      	11.3	
              The
                employees shall be selected according to their specialty qualification,
                personal feature and job experience. The statistic quantity and quality
                of
                the employees shall be decided on by the general manager according
                to the
                needs of business. The employees outside the administrative persons
                shall
                be interviewed and selected by the general manager or the persons
                appointed by the general manager and the persons arranged by party
                B will
                be given priority to engage. All the officers employed by the joint
                venture shall have completed three probation terms before they become
                the
                official employees.

            


    

     

    
      	11.4	
              When
                the employees works at the joint venture, it shall bear the social
                insurance fees (such as old-age insurance, unemployment, medical
                treatment, work injury, maternity leave etc.) regulated by China law and
                regulations of each of them, but the fees occurred before the date
                of
                engaging (defined according to the effective date of the labor contract)
                will not be included.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              昆明圣火药业(集团)有限公司—合资
                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    
      	11.5	
              The
                joint venture shall abide by the rules and regulations concerning
                labor
                protection regulated by Chinese government to make sure the safe
                and civil
                production. The labor insurance of the employees of the joint venture
                shall be handled in accordance with labor
                law

            


    

     

    ARTUCLE
      12 LABOR UNION

     

    
      	12.1	
              The
                employees of the CJV can set up the labor union and take out activities
                under the Labor Union Law of P.R.C and relevant laws and regulations
                

            


    

     

    
      	12.2	
              The
                labor union acts as the representive of the employees’ interest. It’s
                working scope: safeguarding the employees’ democratic rights and interest
                under the Chinese laws, assisting CJV to arrange the bonus and award
                fund,
                giving the employee chances to study knowledge, organizing all forms
                of
                artistic and sports
                activities, supervising the employees to obey the labor discipline
                and
                their accomplishment of the economic task for CJV
                

            


    

     

    
      	12.3	
              After
                the labor union built, CJV will arrange 2% of the whole employees’ salary
                as a fund for running the labor union, under the regulations of labor
                union’s fund set by the National General Labor Union and others in
                China. 

            


    

     

     ARTICLE
      13 Accounting, Auditing And Other Financial Affairs

     

    
      	13.1	
              Led
                by the general manager, the chief accountant of the joint venture
                shall be
                responsible for the financial
                management.

            


    

     

    
      	13.2	
              The
                accounting system and procedure formulated by the General Manager
                and
                Chief Accountant pursuant to the Accounting System of the People’s
                Republic of China on Foreign Investment Enterprise and other laws
                and
                rules and regulations shall be submitted to the board of directors.
                The
                accounting system and procedure shall be submitted to the authorities
                in
                charge and Local Financial Department and tax authorities for
                reference.

            


    

    
      
        
           

          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          

           

          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    昆明圣火药业(集团)有限公司—合资
                                      经营合同

                                  


                          

                        

                      

                    

                  

                

              

            

          

           

        

      

    

    
      	13.3	
              The
                joint venture shall use RMB as recording currency. also it can use
                USA
                dollars or other foreign currency as the supplementary recording
                currency

            


    

     

    
      	13.4	
              All
                the accounting records, notes, account books and the financial statement
                and reports of the joint venture must be written in
                Chinese

            


    

     

    
      	13.5	
              Foreign
                currency and RMB shall be converted at the average rate of buy and
                sell
                published by People’s Bank of China that day according to the real income
                and expenses of the joint venture.。

            


    

     

    
      	13.6	
              The
                joint venture adopts calendar year as its financial year. The first
                financial year will be counted from the day of taking the business
                license
                to Dec.31 of that year

            


    

     

    
      	13.7	
              Both
                parties have the sufficient and same chance to examine the accounts
                of the
                joint venture, which shall be kept in the legal addresses. The joint
                venture shall provide the financial reports which have not been audited
                to
                both parties monthly and quarterly in order that they know the financial
                results of the joint venture consistently. In addition, each party
                can
                invite a CPA in China or abroad to audit the accounts of the joint
                venture
                on its behalf, with the condition of burdening the fees itself and
                notifying the joint venture in advance. The joint venture shall permit
                the
                auditor to audit all the accounting and financial records and other
                documents, under the terms of the consent of the auditor to keep
                secret of
                the above documents.

            


    

     

    
      	13.8	
              The
                joint venture shall invite a Chinese CPA who independent to each
                party to
                audit its accounts and produce annually financial statements and
                reports.
                The first draft of the audited financial statement and reports shall
                be
                submitted to both parties and the board of directors in two months
                after
                every financial year and the last draft shall be completed in four
                months
                after the financial year.

            


    

     

    
      	13.9	
              The
                joint venture shall open foreign account and RMB account separately
                in the
                bank which has been approved to run the foreign currency business
                in
                China. Upon the approval of the Chinese Foreign Currency Administrative
                Bureau, the joint venture can open a foreign currency account in
                the
                foreign bank aboard.

            


    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              昆明圣火药业(集团)有限公司—合资
                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    
      	13.10	
              Through
                its product sale or other methods permitted by Chinese laws, rules
                and
                regulations (include exchanging foreign currency in bank and the
                Center of
                The Foreign Exchange Adjustment, in accordance with the regulations
                of
                administration of foreign currency); the joint venture shall be in
                charge
                of keeping the balance of the income and expenses of the foreign
                currency
                by itself.

            


    

     

    
      
        	13.11	
                After
                  having paid the income tax and offset the losses of the former
                  years, the
                  board of directors shall determine the amount of the three funds
                  drawn
                  from the net profit after tax each year. Unless the otherwise decision
                  of
                  the board of directors, the total amount of the three funds in
                  any year
                  shall not exceed 15% of the net profit after tax in that
                  year.

              


      

    

     

    
      	13.12	
              The
                joint venture shall distribute profits to both parties according
                to the
                following provisions:

            


    

     

    
      
        	
              	(1)	
                Theboard
                  of directors shall decide on the amount of the money for reserving
                  for
                  operation (after the drawing for three funds) and the amount of
                  the
                  distributions to both parties according to the proportion of their
                  capital
                  distributions within four months after each fiscal
                  year.

              


      

    

     

    
      
        
          	
                	(2)	
                  The
                    profit shall not be distributed if the losses of previous years
                    have not
                    been offset. The undistributed profits of previous years can
                    add to the
                    profit this year for
                    distribution

                


        

      

    

     

    ARTICLE
      14 TAXES

     

    
      	14.1	
              The
                joint venture shall pay all the taxes and custom duty in accordance
                with
                Chinese central and local laws and rules and regulations .All the
                Chinese
                and foreign persons shall pay their income taxes in accordance with
                the
                Law of the People’s Republic of China on Individual Income
                Tax

            


    

     

    ARTICLE
      15 CONFIDENTIALITY

     

    
      	
              15.1

            	
              Each
                of the parties has disclosed or will disclose its date about business,
                financial affairs, special technology, research and development and
                other
                confidential date to the others before or during the execution of
                the
                contract. In addition, both parties may obtain some confidential
                and
                special data about the joint venture. Likewise, the joint venture
                may
                obtain similar data about both parties during the fulfillment of
                the
                contract. Unless otherwise regulations about confidentiality, each
                of the
                parties or the joint venture who has received all the above date
                (written
                and oral data included, the"confidential data") must do as follows
                during
                the fulfillment of the contract and the next two
                years:

            


    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            
              
                
                  
                    
                      	
                              昆明圣火药业(集团)有限公司—合资
                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    
      	
            	(1)	
              Keep
                the above confidential data
                confidential

            


    

     

    
      	
            	(2)	
              Not
                disclose the confidential data to any person or entity except its
                own
                employees who need to know the data because of the fulfillment of
                their
                duties.

            


    

     

    
      	15.2	
              The
                above regulation of 15.1 does not apply to the following confidential
                data:

            


    

     

    
      	
            	(1)	
              If
                the written record before the disclosure can prove that the data
                has been
                known by others.

            


    

     

    
      	
            	(2)	
              Public
                data not because of the breach of the contract by the accepter
                party;

            


    

     

    
      	
            	(3)	
              The
                data is known from the third parties who do not have the duty of
                keeping
                confidential;

            


    

     

    
      	
            	(4)	
              Data
                required to be disclosed by the court which has jurisdiction right
                or the
                administration of government.

            


    

     

    
      
        
          	15.3	
                  If
                    demanded by one party, the joint venture shall sign another confidential
                    agreement about the confidential data obtained from the party
                    or the
                    related company, the terms of which shall be similar with the
                    terms of
                    article 15.

                


        

      

    

     

    
      	
              15.4

            	
              Each
                of the parties and the joint venture shall make the regulations in
                order
                that the directors, officers and other employees of the party and
                the
                related company will comply with the obligations stated in article
                15. All
                the directors, managers and other employees of the joint venture
                shall be
                required to sign the confidentiality surety ship letter in the accepted
                form by both parties.

            


    

     

    
      	
              15.5

            	
              The
                regulations of article 15 won’t do harm to any right or obligation of the
                parties or the joint venture under the law or regulations
                related.

            


    

     

    
      	
              15.6

            	
              As
                for any natural person or legal person of the parties of the contract,
                the
                article 15 will still bind upon them after they are no longer the
                party
                for the reason of the transfer of their registered capital and
                corresponding rights and obligations. In addition, the rights and
                obligations of article 15 will still take effect after the expiration
                or
                the termination in advance, even after the dissolution of the joint
                venture.

            


    

     

    ARTICLE
      16 TIME LIMIT

     

    
      	16.1	
              The
                time limit of cooperation is 50 years, which shall begin since the
                issuance of the business license.

            


    

     

    
      	16.2	
              With
                the consent of both parties, they can apply to the examination and
                approval authority for the extension of the time limit in no less
                than six
                months before the expiration. Unless the approval by the examination
                and
                approval authority, the time limit cannot be
                extended.

            


    

     

    
      
        
        

      

      
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    ARTICLE
      17 TERMINATION, MERGE AND LIQUIDATION 

     

    
      	17.1	
              The
                contract shall be terminated after the expiration of cooperation
                unless
                been extended in accordance with article 16.2. The contract can be
                terminated upon consensus through written consultation by both parties.
                One party have the right to notify the others in written form thirty
                days
                in advance to dissolve the contract before the expiration in any
                of the
                following situations:

            


    

     

    
      
        	
              	(1)	
                The
                  joint venture has stopped its business, or is unable to return
                  its due
                  debts;

              


      

    

     

    
      
        	
              	(2)	
                The
                  party who has the right to terminate can terminate the contract
                  in
                  accordance with article 6.7,article 21.3 or article
                  22.2.

              


      

    

     

    
      
        
          	
                	(3)	
                  All
                    or part of the assets of the joint venture has been confiscated,
                    which
                    will do heavy damages to the joint
                    venture.

                


        

      

    

     

    
      
        	
              	(4)	
                Any
                  party violates the contract to transfer all or part of the shares
                  of the
                  registered capital,. Only the other party can terminate the contract
                  in
                  this case

              


      

    

     

    
      
        	
              	(5)	
                Any
                  party violates the regulations of the contract or the article materially
                  in other aspects and the conduct cannot be corrected in sixty days
                  after
                  the written notice. Only the party who comply with the contract
                  can
                  terminate the contract in this
                  case.

              


      

    

     

    
      
        	
              	(6)	
                Where
                  any party has been declared bankrupt, or has become the target
                  of the
                  bankruptcy, dissolution or liquidation procedure, or is unable
                  to return
                  due debts, only the party who won’t be affected can terminate the
                  contract.

              


      

    

     

    
      	17.2	
              If
                any party has delivered the notice of desiring to terminate the contract
                in accordance with article 17.1, both parties shall negotiate in
                two
                months after the delivery and strive for the remove of the reasons
                of
                termination. If the problem cannot be settled after the expiration
                of two
                months, any party has the right to purchase the rights and interests
                of
                the others’ in accordance with article 17.3, with the condition that the
                party who complies with the contract or the party who has not been
                affected has the right to purchase the other party’s interests according
                to proportion in accordance with the provisions of paragraph 5, 6,
                of
                article 17.1

            


    

     

    
      	17.3	
              (1)      
                Except
                the regulation of article 17.2, any party (the "buyer") can purchase
                the
                rights and interests of the other party (the "withdrawer") with the
                consent of the withdrawer after the termination according to article
                17.1
                or before the expiration stated in article 16.If the buyer has delivered
                the notice of desiring to purchase the interests of the other party
                according to the article, both parties shall consult the value of
                the
                joint venture. If the consultation has not finished in the following
                thirty days, both parties shall appoint an international investment
                bank
                company to determine the value of the joint venture (being a managing
                enterprise)with the world known standard. The expenses shall be beard
                by
                the joint venture

            


    

     

    
      
        
        

      

      
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              	(2)	
                The
                  purchasing price is the products of the two items: (a) the value
                  of the
                  joint venture determined in accordance with paragraph 1; (b) the
                  contribution proportion of the registered capital of the withdrawal
                  then.
                  The buyer may notify the withdrawal in written form to buy the
                  rights and
                  interests in purchasing price of the withdrawal in the joint venture
                  in
                  thirty days after the determination of the value of the joint
                  venture.

              


      

    

     

    
      
        	
              	(3)	
                If
                  the buyer choose to buy the rights and interests of the withdrawal,
                  both
                  parties shall sign the contract about making over the above interests
                  in
                  time and apply for all the approval of authorities required by
                  the sale.
                  If the sale hasn’t completed in ninety days after the receipt of the
                  notice letter stated in paragraph 2, the buyer has the right (but
                  without
                  the obligation) to terminate the purchase at any time. In this
                  case, the
                  sale application shall be withdrawn. The joint venture and both
                  parties
                  shall apply for dissolving the joint venture to the examination
                  and
                  approval authority at once.

              


      

    

     

    
      	17.4	
              Where
                the contract has been terminated in accordance with article 17, if
                any
                party did not begin the purchase procedure in accordance with article
                17.3, which will be deemed as the board of the directors passed the
                resolution of dissolving the joint venture correspondingly and the
                joint
                venture shall submit the dissolving application to the examination
                and
                approval authority at once. For the purpose of terminating of the
                contract
                and dissolving the joint venture, each of the parties agree to take
                all
                the acts and sign all the files required by laws, and agree to prompt
                the
                entrusted members of the board of directors to take the above acts
                and
                sign the above files.

            


    

     

     ARTICLE
      18 THE HANDLING OF THE ASSETS AFTER THE EXPIRATION OF THE JOINT
      VENTURE

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            
              
                
                  
                    
                      	
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                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    
      	
              18.1

            	
              When
                the time limit of the contract expires, or the application about
                dissolving the joint venture has been approved with article 17, or
                the
                contract has been terminated or the joint venture has dissolved in
                other
                cases, the liquidation of the joint venture must be conducted in
                accordance with Chinese laws, rules related and the following regulations
                (which won’t have conflict with the above laws and rules):
                

            


    

     

    
      	
            	(1)	
              The
                liquidation committee is composed of three members, two of which
                is
                appointed by party A, the other remains appointed by Party B. Any
                decision
                made by the committee must be passed
                correspondingly.

            


    

     

    
      	
            	(2)	
              When
                make and executive the liquidation scheme, the liquidation committee
                shall
                try its best to obtain the higher price and sell the assets in USA
                dollars
                or the other freely exchangeable foreign currency or RMB under the
                condition of complying with the regulations about administration
                of the
                Chinese foreign exchange.

            


    

     

    
      	
            	(3)	
              When
                any asset needs liquidation, if the estimation is needed, the committee
                shall invite a charted accountant firm to do such work, which should
                register in China and qualify the corresponding endowment and stand
                alone
                from either party.

            


    

     

    
      
        	
              	(4)	
                The
                  liquidation committee is in charge of making liquidation plan,
                  which will
                  be executed after getting the approval of the board of
                  director.

                 

                After
                  the liquidation, each of the parties can obtain the copies of all
                  the
                  accounting certificates, account books, financial and accounting
                  statements, minutes and decisions of the meetings of the board
                  of
                  directors and the other concerning files at its own
                  expense

              


      

    

     

    
      	18.2	
              The
                regulations of article 17.3, article 17.4 and article 18.1 won’t be valid
                at the expiration or termination in advance of the contract until
                the
                purchase procedure under article 17.3 or the liquidation job under
                article
                18.1 has been completed.

            


    

     

    ARTICLE
      19 INSURANCE 

     

    
      	19.1	
              The
                joint venture should keep insurance consistently during the fulfillment
                of
                the contract. The sort of the insurance and amount of the money should
                be
                decided by the general manager and approved by the board of directors.
                

            


    

     

    ARTICLE
      20 LIABITITIES FOR BREACH OF CONTRACT 

     

    
      	
              20.1

            	
              If
                either party breaks the contract, it shall bear the liability arising
                out
                of the breach. In any case, the liability of the party who breaks
                the
                contract is limited by its capital contributions
                amount.

            


    

     

    ARTICLE
      21 FORCE MAJEURE 

     

    
      	21.1	
              If
                any force majeure occurs, one party can not fulfill the obligations
                of the
                contract, therefore the contract should be suspended, not
                breach.

            


    

     

    
      
        
        

      

      
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              21.2

            	
              The
                party who claims the force majeure should notify the other party
                in
                written form and provide the sufficient proofs to prove the occurrence
                and
                consistence time of the force majeure in the following fifteen
                days

            


    

     

    
      	21.3	
              If
                any force majeure occurs, both parties should negotiate immediately
                in
                order to find the fair settlement method and should try their best
                to
                reduce the affect of the force majeure to the minimum. If the occurrence
                or result of the force majeure had caused heavy loss to the operation
                of
                the joint venture over six months and the two parties had not found
                the
                fair settlement methods, each of the parties can terminate the fulfillment
                of the contract with the condition that it has fulfilled the obligations
                of article 21.3.

            


    

     

    ARTICLE
      22 APPLICABLE LAW

     

    
      	22.1	
              The
                establishment, effect, explains and fulfillment as well as the controversy
                about the contract applies to Chinese issued law. If Chinese issued
                law
                does not regulate some problem about the contract, the common
                international merchant precedent should be referred
                to.

            


    

     

    
      	22.2	
              If
                China issue new law or regulation, or modify, explain any issued
                law or
                regulation after the contract has come into force, therefore the
                economic
                interest of one party may be effected in essence, the two parties
                should
                negotiate immediately and try their best to carry out necessary adjustment
                in order that the economic interest obtained from the contract will
                be no
                less than the level before. If the adjustment can not be carried
                out, any
                party whose interest has been affected in essence can terminate the
                contract.

            


    

     

    
      	22.3	
              The
                joint venture and the two parties have the right to enjoy the preferential
                treatment enjoyed by the foreign investing enterprise or the foreign
                investor and the more preferential tax, or other preferential treatments
                according to law after the contract signed. The two parties agree
                to apply
                for the above preferential treatment by the two parties or the joint
                venture in time according to law.

            


    

     

     ARTICLE
      23 SETTLEMENT OF DISPUTES

     

    
      	23.1	
              Any
                dispute arising from the performance of the Contract shall be settled
                firstly through negotiation by both parties. If the written notice
                about
                the negotiation cannot be passed in sixty days after the delivery
                by one
                party, each of the parties can submit the dispute to China International
                Economic and Trade Arbitration Commission (the "Arbitration
                Commission").The arbitration will take place in Shanghai according
                to the
                effective rules of procedures of the said
                commission.

            


    

     

    
      
        
        

      

      
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      	23.2	
              The
                Arbitration Commission should be constituted by three arbitration
                persons,
                one appointed by the appealed ,the other appointed by the and the
                third
                appointed by both parties, failing which the third should be appointed
                by
                the Arbitration Commission and act as the chief arbitration person
                of
                arbitration court.

            


    

     

    
      	23.3	
              The
                procedure of arbitration shall be conducted in
                Chinese.

            


    

     

    
      	23.4	
              The
                arbitration award shall be final and binding upon both
                parties.

            


    

     

    
      
        	23.5	
                Except
                  the controversy items, both parties shall continue carrying out
                  the
                  contract during the
                  arbitration.

              


      

    

     

    
      	23.6	
              In
                the procedure of arbitration, judicial process or others, which is
                between
                two parties and relevant to this contract, any party claim to give
                up
                dominion immunity pleading, or other pleading with the fact or claim
                of
                being a department or institution of dominion country
                

            


    

     

    ARTICLE
      24 MISCELLANEOUS PROVISIONS 

     

    
      	24.1	
              If
                one party fails or delays to exercise one right under the contract,
                it
                cannot be seemed as the waiver to the right. Any exercise of the
                rights
                alone or partly cannot exclude to exercise the right separately either
                in
                the future.

            


    

     

    
      	24.2	
              Unless
                otherwise provisions of the contract, without the written consent
                of the
                other party, or without the approve of the authorities concerned
                demanded
                by law, each of the parties cannot transfer the contract or its entire
                rights and obligations under the contract completely or
                partly.

            


    

     

    
      	24.3	
              The
                contract is established for the benefit of both parties and their
                legal
                successors and their acceptance, therefore will bind upon all of
                them. The
                contract cannot be modified orally. Any modification on the contract
                will
                be valid with the condition of the written consent of both parties
                and
                requirement of law and approve of the authorities concerned as
                well.

            


    

     

    
      	24.4	
              The
                invalidity of any term of the contract does not affect the validity
                of the
                others.

            


    

     

    
      	24.5	
              The
                contract has six Chinese original
                copies

            


    

     

    
      	24.6	
              All
                notifications or written notices required under the contract, which
                are
                delivered to the other party or the joint venture by one party, shall
                be
                written in Chinese and sent by express courier’s notification documents,
                and confirmed by the express courier’s notification documents, or sent by
                fax. The above mentioned documents will be deemed to be been received
                after 7 days from the date when handled to the express courier. Or,
                if
                sent by fax, it shall be 1 day after fax. But it shall have the fax
                confirmation document as evidence and this document shall be faxed
                over
                too. All the notifications and written notices shall be sent to the
                following addresses before the written modification notice of the
                addresses have been received by the other
                parties:

            


    

     

    
      
        
        

      

      
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                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    PARTY
      A:

    LAN’S
      INT’L MEDICINE INVESTMENT CO., LIMITED

    UNIT
      2E,
      2/F., RIGHT EMPEROR COMMERCIAL BUILDING, 122-126 WELLINGTON STREET, CENTRAL,
      HONGKONG)

    Facsimile
      Number: 0871-7282620

    Attn:
      Lan
      Gui Hua

     

    PARTY
      B:

    SDIC
      Venture Capital Investment, Co., Ltd

    International
      Investment Building ,No6-6, North street,Fu cheng men, Western city district,
      Beijing

    Facsimile
      Number:
      010-66579535

    Attn:
      Deng Hua

     

    JOINT
      VENTURE:

    Kunming
      Shenghuo Pharmaceutical Group Co., Ltd

    Facsimile
      Number:
      0871-7282620

    Attn:
      General Manager

     

    
      	24.7	
              The
                contract constitutes of the whole agreement about the targeted matter
                of
                the contract and will replace all the discussions, negotiations and
                agreements made before about the subject. Where the contract has
                any
                conflict with the terms and regulations of the articles, the terms
                and
                regulations of the contract shall govern. The authorized representatives
                of each party officially to sign the contract on May 22,
                2006.

            


    

    


    LAN’S
      INT’L MEDICINE INVESTMENT CO., LIMITED (signed by company seal)

    Signature:
      Lan Gui Hua

    Name:
      Lan
      Gui Hua

    Post:
      President

    Nationality:
      Chinese

     

    
      
        
        

      

      
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                                经营合同

                            


                    

                  

                

              

            

          

           

        

      

    

    SDIC
      Venture Capital Investment, Co., Ltd (signed by company seal)

    Signature:
      Deng Hua

    Name:
      Deng Hua

    Post:
      Vice-General Manager 

    Nationality:
      Chinese 

     

    
      
        
        

      

      
        23