Exhibit 10.7

[Letterhead of Biogan International, Inc.]

July 19, 2002

Hechi Industrial Co., Ltd.No. 386, Xinjian Road, Hechi CityGuangxi Zhuang Autonomous RegionPeople's Republic of ChinaDear Sirs:

        We refer to our asset purchase agreement (the "Agreement") made effectiveJuly 1, 2000 in respect of the proposed acquisition by Biogan International,Inc. ("Biogan") of certain assets and liabilities of Hechi Industrial Co. Ltd.("Hechi"). We confirm that, after entering into the Agreement, we were advisedby legal counsel that the transactions contemplated in the Agreement did notcomply with certain regulatory laws of the People's Republic of China. As aresult, we wish to record our agreement to and confirmation of the following:

1.    None of the transactions contemplated by the Agreementhave been consummated and the Agreement is hereby terminated. Without limitingthe foregoing, the parties confirm that the 31,300 shares of Biogan's Series AConvertible Preferred Stock and 16,800,000 Shares of Biogan's Common Sharesproposed to be issued by Biogan to Hechi pursuant to the agreement have not beenissued to Hechi.

2.    This letter agreement supercedes all prior discussions andagreements between the signatories hereto with respect to the Agreement. 

3.    In addition to this letter agreement, each of Biogan andHechi hereto shall, from time to time at the request of the other, execute anddeliver such other documents and shall take such other action as may benecessary or proper to more effectively carry out the terms of this letteragreement.

Please sign the duplicate copy of this letter and return it to theundersigned to confirm your agreement with the foregoing.

 

|   | Yours truly,                                                                                   |
|--------|------------------------------------------------------------------------------------------------|
|   |                                                                                           |
|   | **BIOGAN INTERNATIONAL, INC.**                                                                 |
|   | a Delaware corporation                                                                         |
|   |                                                                                           |
|   | By: /s/ Gilles Laverdiere                                                                      |
|   |      Gilles Laverdiere,     Vice-Chairman of the Board |
|   |                                                                                           |
|   | Business Address:                                                                              |
|   |                                                                                           |
|   | 813 Beriault Suite 203    Longueil, Quebec    Canada J4G 1X7    Attn: Vice-Chairman            |
|   |                                                                                           |
|   | Telephone: (450) 651-6701    Facsimile: (450) 651-8049                                         |
|   |                                                                                           |

Agreed this 19th day of July, 2002.

HECHI INDUSTRIAL CO., LTD.a company organized under the laws of thePeople's Republic of China

By: /s/ Kuang Yihuai                             Kuang Yihuai,    Chairman of the Board

Business Address:

No. 386, Xinjian Road, Hechi CityGuangxi Zhuang Autonomous RegionPeople's Republic of China

Telephone: 86-778-2285376Facsimile: 86-778-2293361