Equity Pledge Agreement


                       Equity Pledge Agreement

                         (English Version)




This Equity Pledge Agreement (the "Agreement") is entered into as of 

December 20, 2006, among the following three parties:

 

PARTY A: Longdan International Inc.

Legal Address: Renaissance Trust Ltd, Solomon Building, P. O. Box 636, 

Main Street, Charlestown, Nevis.  




PARTY B: Hubei Longdan Biological Medicine Technology Co. Ltd.

Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road, 

Wuchang District, Wuhan, Hubei, China, 430070                  




PARTY C: Zhilin Zhang, Chairman and an authorized person to represent  

shareholders of Party B, who collectively own more than 50% of the 

outstanding equity interests in Party B.

Legal Address: No.1, 2nd Floor, 308 Qing Tai Road, Hanyang, Wuhan, 

Hubei China

                

WHEREAS, Party A, ( the Pledgee ) is a business company incorporated 

under the laws of Nevis, and has entered a series of agreement, 

collectively the "Main Agreements" , which include "Exclusive Consult 

and Services Agreement", "Operating Agreement" and "Exclusive Option 

Agreement", and "Proxy Agreement", with Part B, or Part B and Part B's 

shareholders together, concurrently with this Agreement.

  

WHEREAS, Party B is a company with exclusively domestic capital 

registered in the People's Republic of China, and is engaged in the 

business of Chinese medicine development, manufacturing, sale, and 

pharmacy management distribution network;




WHEREAS, Party C ( the Pledgor ) represents more than 50% equity 

interest of Party B, and agrees to provide security of pledge over the 

equity interests for the performance of payment obligations of Party B 

under the "Exclusive Consult and Services Agreement", and Party A 

agrees to accept such security of pledge.




WHEREAS,  "Agreement Letter for Equity Pledge Agreement" as showed in 

the appendix is an integral part of this Agreement and has the same 

legal effects as the other parts of the Agreement. Part C will legally 

represent any shareholder of Part B, who signs the "Agreement Letter 

for Equity Pledge Agreement", in this Agreement.




NOW THEREFORE, Party A, Part B and Part C through negotiations hereby 

agree as follows through mutual negotiations:

         

1.   Pledge     

     

     1.1 In order to ensure that Part B will perform its payment to 

Part A under Exclusive Consult and Services Agreement and other 

obligation under the Main Agreements, Party C (the Pledgors) agrees to 

provide security of pledge over 100% of the equity interests it holds 

in Party B ("Pledged Equity Interests") to Party A (the Pledgee). 

Pledge under this Agreement refers to the rights owned by the Pledgee, 

who shall be entitled to a priority in receiving payment by the 

evaluation or proceeds from the auction or sale of the equity interests 

pledged by the Pledgors to the Pledgee. 




     1.2 The Parties confirm that all members in Party C undertake the 

obligations under the security pledge independently. Such members shall 

not be jointly and severally liable for such obligations.  




2.   Term of Pledge     

     

     2.1 This Agreement shall be effective from the date when all 

parties sign the Agreement and the said equity interests pledges are 

recorded in the register of shareholders of Party B and the term is two 

(2) years until all the obligations of Party B under Main Agreements 

(including all amendments and supplementary contracts to Main 

Agreements) are fulfilled. 




     2.2 During the term of pledge, in the event that Party B fails to 

perform any obligations under Main Agreements, Party A shall have the 

right to sell or dispose of the pledged assets in accordance with 

relevant laws. 




3.   Registration




     3.1 Party C guarantees to Party A that its implementation of its 

obligations under this Agreement have been formally approved and/or 

will be formally approved by the shareholders meeting of Party B. 




     3.2 After this Agreement effective, Party C will register equity 

interests pledge hereof with the shareholder register of Party B. 

     

     3.3 Party C shall deliver to Party A Party C's physical possession 

of their investment certificates in Party B and shareholders register 

of Party B. 

     

     3.4 The Party A shall be entitled to collect any and all dividends 

for declared or paid in connection with the equity interests.




4.   Party C's Representation 




     4.1  Party C is the legal owner of the equity interests pledged.




     4.2  Party C has not placed any other pledge on the pledged equity 

interests, except for the pledge provided hereunder.

     

5.   Party C's Warrants and Undertakings




     In the term of this Agreement, Party C guarantees to Party A that 

the Pledgors will:

     

     5.1 Not transfer the pledged equity interests, or establish or 

permit the creation of any guaranty on the pledged equity interests, 

unless otherwise agreed by both Parties, or with Party A's prior 

written consent;




     5.2 Comply with and implement all the People's Republic of China's 

Laws and regulations concerning the pledge of rights, and in the case 

of receiving any notice, order or suggestion made by the governmental 

authority, provide to Party A within 5 calendar days upon receiving 

them, and pursuant to Party A's reasonable requests or with Party A's 

consent comply with, or suggest arguments and representations against 

such notice, order or suggestion.




     5.3 Upon Party A's request, honestly sign, and urge other persons 

with interests to the pledge to sign, all certificates of rights, 

agreements and covenants in connection with the performance of this 

Agreement, and encourage other persons with interests to the pledge to 

take any action in relation to the enforcement of this Agreement and 

facilitate Party A's exercising of its rights under this Agreement. 




     5.4 Perform all the guarantees, covenants, and warranties as 

specified in Main Agreements, for the benefits of the Part A. The Part 

C shall compensate all the losses suffered by the Part A for the 

reasons that the Part C does not fully perform the guarantees, 

covenants, and warranties as specified in Main Agreements.

     

6.   Transfer




     6.1 Party B shall not have the right to donate or transfer any 

rights and obligations under this Agreement unless with Party A's prior 

written consent.




     6.2 This Agreement shall be binding upon Party C and its 

successors, and also binding upon Party A and its successors.




     6.3 Party A, at any time, may assign all or any of its rights and 

obligations under this Agreement, to a designated person, or persons. 

Where Party A transfers its rights and obligations under this Agreement, 

Party B and Part C shall, upon Party A's request, execute agreements 

concerning said transfer.

     

7.   Confidentiality




     The Agreement itself and relevant materials of this Agreement 

shall be held confidential by all the Parties and shall not be 

disclosed to any third party excluding senior officers, directors, 

shareholders, agents and professional consultants. If any Party is 

required by People's Republic of China Laws or other jurisdictional 

laws to disclose any information in connection with this Agreement to 

the public, or to file this Agreement with the regulatory authorities 

involved, that Party shall not be subject to this Article. 

    

     This Article shall survive any amendment, supplementary or 

termination of this Agreement

     

8.   Language




     This Agreement is written in both Chinese and English, and 

executed in Chinese only, and the executed Chinese language Agreement 

shall prevail in all cases. This Agreement is executed in three 

originals and each Party holds one original. Each original has the same 

legal effect. 




9.   Amendments and Supplementary Agreements 




     Parties may negotiate and enter any amendments of this Agreement, 

or supplementary agreements on matters not agreed upon herein. Any 

amendments of this Agreement, or supplementary agreements shall be 

valid only when made in writing and signed by all parties. Any 

amendments of this Agreement, or supplementary contracts have equal 

effect as this Agreement.

 

10.  This Agreement shall be governed by, and construed in 

accordance with the laws of the People's Republic of China.




11.  Settlement of Dispute

   

     The parties shall strive to settle any dispute arising from, out 

of or in connection with the interpretation or performance of this 

Agreement through friendly negotiation. In case no settlement can be 

reached through negotiation within six months, each party can submit 

such matter to China International Economic and Trade Arbitration 

Commission (the "CIETAC"). The arbitration shall follow the current 

rules of CIETAC. The arbitration award shall be final and binding upon 

the parties and shall be enforceable in accordance with its terms.




12.  Force Majeure




     Force Majeure means any event that is beyond the party's 

reasonable control and cannot be prevented with reasonable care, such 

as the acts of nature: earthquake, flood, typhoon, fire, explosion, and 

acts of governments, war, and acts of terrorism or other civil unrest 

means. If a Force Majeure event exists and affects the performance of 

this Agreement, the affected party shall immediately notify the other 

parties by means of telegraph, e-mail or other electronic forms, and 

shall furnish sufficient evidence in writing of the occurrence of the 

Force Majeure event within twenty (20) calendar days thereafter. 

According to the impact of the Force Majeure on the performance of this 

Agreement, the Parties determine whether to release this Agreement. 

After the event of Force Majeure is removed, all parties agree to 

resume performance of this Agreement with their best efforts.  




13.  Capable of Severing 




     Any of the provisions of this Agreement will be deemed as capable 

of severing in the jurisdiction where it conflicts with the laws in 

such jurisdiction. The invalid or unenforceable effect of such 

provision in one jurisdiction should not be affected that in other 

jurisdictions.
















           (A Signature Page Follows)



















               










                 Signature Page










IN WITNESS WHEREOF the Part A, Part B and Part C hereto have caused 

this Agreement to be duly executed on their behalf by a duly authorized 

representative as of the date first written above.




Party A (Pledgee):  Longdan International Inc.

          

By: /s/ Zhilin Zhang

Zhilin Zhang

Chairman







Party B:  Hubei Longdan Biological Medicine Technology Co. Ltd.

          

By: /s/ Zhilin Zhang 

Zhilin Zhang

Chairman







Party C (Pledgors):  Shareholders of Part B




By: /s/ Zhilin Zhang 

Zhilin Zhang

An authorized representative of the majority shareholders

 
















                   (An Appendix Page Follows) 



































































Appendix: Form of Agreement Letter for Equity Pledge Agreement

             

             Agreement Letter for Equity Pledge Agreement

               ( English Version, for Reference only )




To:

 Hubei Longdan Biological Medicine Technology Co. Ltd. and Longdan 

International Inc.




     I, as the shareholder of Hubei Longdan Biological Medicine 

Technology Co. Ltd., hereby agree and confirm as follows: 

 

    I have read the full text of Equity Pledge Agreement, and I fully 

agree to all contents of this agreement.




     I assign Zhilin Zhang, Chairman of Hubei Longdan Biological 

Medicine Technology Co. Ltd. to represent me with the Common stock 

shares specified at the bottom of this agreement, together with Hubei 

Longdan Biological Medicine Technology Co. Ltd. to sign the Equity 

Pledge Agreement with Longdan International Inc.




     I agree to sign or provide necessary documents to perform the 

Equity Pledge Agreement.




Signature:                          

Print Name:

Identity Card Number:

Information of Possession of Common Stocks of Hubei Longdan Biological 

Medicine Technology Co. Ltd. :

Class of Common Stocks:                  Number of Shares:

Percentage of Voting Power:

Date: December 20, 2006