Translated from Chinese


 


The Exclusive Licensing Agreement


for Harbin Renhuang
Pharmaceutical Co., Ltd. to


Use Forest Resources under


Yichun Red Star Forestry Bureau


 


The exclusive licensing agreement to use forest
resources under Yichun Red Star Forestry Bureau was signed by the following parties on January 11, 2011:


 


Party A: Yichun Red Star Forestry Bureau
in Heilongjiang Province


 


Legal Person: Changshun Zhao


Address: Hongxing District, Yichun City, Heilongjiang
Province


 


Party B:
Harbin Renhuang Pharmaceutical Co., Ltd.


 


Legal Person: Shaoming Li


Address: Changjiang International Building, 11th
Floor, No. 28, Changjiang Road, Nangang District, Harbin


 


While the Yichun city has been implementing its
development strategy of “Ecology builds city, industry flourishes city” to serve the national goal of protecting Daxinganling
and Xiaoxinganling Forests and changing economic development modes, Renhuang Pharmaceutical Inc. also decides to achieve the goal
of establishing the Yichun Grand Forest to speed up the developing process of “Six In One”. In the meantime, in order
to promote the comprehensive development of the forestry industry and to prosper under a cooperative and win-win relationship,
under the principle of mutual benefits and common development, through friendly consultation, Party A and Party B both confirm
to work together under the following exclusive licensing agreement to use forest resources under Yichun Red Star Forestry Bureau:


 


Article I Contents of Cooperation


 


1.         Party A shall
designate an area of 100,000 mu for the growth of acanthopanax near the Sanyang tree farm and its surrounding areas within Party
A ’s field, and exclusively authorize Party B to use the forest resources to cultivate wild acanthopanax and to establish
an acanthopanax GAP base of 1,000 mu.


 


2.          Party A cannot
authorize any third party to use aforementioned forest resources besides Party B throughout the period of cooperation.


 


Article II Principles of Cooperation


 


Parties shall abide
by the principles of genuineness, adaptability, ecofriendliness and the scientific development philosophy of “develop while
protect, protect while develop”.


 






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Article III Forms of Organization


 


1.          Party B shall
carry out the organizational form of “corporation plus peasant household” as Party B invests in the local growth of
wild medicine herbs, mainly in acanthopanax, on the Sanyang tree farm and its surrounding areas under Hongxing Forestry Bureau.
Each 50 to 100 mu shall be regarded as an operating unit that shall be managed by one peasant household. The expenses shall be
undertaken by Party B.


 


2.         Party A shall
sell all the acanthopanax collected in the defined areas by the local farmers to Party B.


 


Article IV Terms of Cooperation


 


The 100,000 mu forest
land and the 1,000 mu acanthopanax GAP base shall be authorized to Party B by Party A to be used as diversified land to develop
forest economy unless the country, the province and the city have decided to change its economic modes. The period of use is 30
years.


 


Article V Responsibilities of Party A


 


The 100,000 mu forest
land and the 1,000 mu acanthopanax GAP base are legally owned by Party A, so Party A has the right to authorize Party B to use
them under Article 1 of this agreement. If the authorization in the agreement needs to be approved by its superior government agency,
Party A shall be responsible for dealing with it and getting the approval from the related government agencies.


 


Party A shall be responsible
for protecting Party B’s exclusive right of usage against infringement. Party A shall decide whether to expand the development
or to extend the term of the exclusive usage based on the conditions of the cooperation and the development prospects.


 


Party A shall be responsible
for providing related preferential policies on the use of the forest resources in the area, assisting Party B with project construction
in the area and ensuring the smooth implementation of Party B’s 100,000 mu wild acanthopanax
growing base and the 1,000 mu GAP planting base.


 


Party A shall provide
the related policy information on local forestry, agriculture and industrial constructions to facilitate Party B’s expanding
operation of the forest resources in the area.


 


Article VI
Responsibilities of Party B


 


Party B is approved
to manage the forest resources of the designated area, but it cannot change the purpose of the land at will, otherwise this contract
is in void.


 






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Article VII Exclusive Possession Costs and
Method of Payment


 


1.
     Parties agree that costs for the aforementioned 100,000 mu forest land and the 1,000 mu acanthopanax GAP base are RMB ¥
3,430,000 for the first year, and RMB ¥ 3,330,000 a
year after the fees and the total amount for 30 years is up to RMB ¥
100,000,000.


 


2.     Party B shall pay Party A in the following
fashion:


 


(1)
      Party A shall authorize Party B the right of usage of the construction project for the 100,000
mu forest land and the 1,000 mu acanthopanax GAP base on the Sanyang tree farm and its surrounding areas under Hongxing
Forestry Bureau, in the meantime Party B shall pay RMB ¥ 50,000,000
within 1 month after the signing of the contract. 


 


(2)        Party B shall pay the remaining RMB ¥ 50,000,000 within
12 months after Party B has obtained the approval documents for the authorized operations. 







 


Article VIII Liability for Breach of Contract


 


1.    Except for the
force majeure, if Party A is in breach of this contract which results in the unavailability of Party B’s rights, Party A
shall be deemed as the defaulting party under this Agreement and it shall give Party B a complete refund and pay a penalty fee
(10% of payment under the contract).


 


2.    Except for the
force majeure, if Party B delays paying the transfer costs, Party B shall pay a penalty fee as an overdue payment based on 1% of
its daily interest until Party B has paid all of the principal interests The force majeure events refer to: earthquakes, droughts,
floods, wars, state actions and other unforeseeable, unavoidable and insurmountable objective conditions. Both parties shall proceed
with their obligations immediately upon the cease of the event of the force majeure or the removal of the effects.


 


Article IX Dispute Resolution


 


Any disputes between the parties shall be
resolved upon the discussion between both parties in the spirit of friendly consultation and mutual understanding. If the dispute
cannot be resolved through discussion, the parties have the right to bring a lawsuit to the People’s Court.


 


Article X Annex of the Agreement


 


The unaccomplished matters,
other clauses of this Contract may be negotiated between the two parties and the parties shall sign the supplementary agreement,
which shall be deemed as the annexes to this agreement. It is an integral part of the contract. Both the Contract and the annexes
have the same legal effect.


 






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Article XI Effectiveness of Agreement and
Miscellaneous


 


1.     This agreement comes into force
after the signing or the stamping of the Contract by the legal representatives or authorized representatives of both parties.


 


2.     The acanthopanax
acquisition agreement signed by the parties on July 8, 2010 will continue to be valid. If any term hereof conflicts with that agreement,
this Agreement shall supersede, but the contents in the acquisition agreement will continue to be valid.


 


3.     This agreement
is executed in four counterparts (copies) and each of the parties has two copies. Both have the same legal effect.





Party A: Yichun
Red Star Forestry Bureau in Heilongjiang Province


(stamp)


Legal Reprehensive: Changshun Zhao


Date: Jan. 11, 2011


 


Party B: Harbin
Renhuang Pharmaceutical Co., Ltd.


 


Legal Reprehensive: Shaoming Li


Date: Jan. 11, 2011




 






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