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                                                                    EXHIBIT 10.3

                            2004 STOCK INCENTIVE PLAN

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                          BEIJING MED-PHARM CORPORATION
                           2004 STOCK INCENTIVE PLAN

SECTION 1. PURPOSE.

The purpose of the Plan is to promote the interests of the Company and its
shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, independent contractors and non-employee Directors
capable of contributing to the future success of the Company, to offer such
persons incentives to put forth maximum efforts for the success of the Company's
business and to afford such persons an opportunity to acquire a proprietary
interest in the Company.

SECTION 2. DEFINITIONS.

As used in the Plan, the following terms shall have the meanings set forth
below:

(a)   "Affiliate" shall mean (i) any entity that, directly or indirectly through
one or more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, in each case as determined
by the Committee.

(b)   "Award" shall mean any Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Award, Other Stock Grant or Other Stock-Based
Award granted under the Plan.

(c)   "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.

(d)   "Board" shall mean the Board of Directors of the Company.

(e)   "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any regulations promulgated thereunder.

(f)   "Committee" shall mean a committee of Directors designated by the Board to
administer the Plan. The Committee shall be comprised of not less than such
number of Directors as shall be required to permit Awards granted under the Plan
to qualify under Rule 16b-3, and each member of the Committee shall be a
"non-employee director" within the meaning of Rule 16b-3 and an "outside
director" within the meaning of Section 162(m) of the Code. The Company expects
to administer the Plan to the extent feasible in accordance with the
requirements for the award of "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code.

(g)   "Company" shall mean Beijing Med-Pharm Corporation, a Delaware
corporation, and any successor corporation.

(h)   "Director" shall mean a member of the Board.

(i)   "Eligible Person" shall mean any employee, officer, consultant,
independent contractor or Director providing services to the Company or any
Affiliate whom the Committee determines to be an Eligible Person.

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(j)   "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

(k)   "Fair Market Value" shall mean, with respect to any property (including,
without limitation, any Shares or other securities), the fair market value of
such property determined by such methods or procedures as shall be established
from time to time by the Committee. Notwithstanding the foregoing, unless
otherwise determined by the Committee, the Fair Market Value of Shares as of a
given date shall be, if the Shares are then quoted on The NASDAQ Stock Market,
the average of the high and low sales price as reported on The NASDAQ Stock
Market on such date or, if The NASDAQ Stock Market is not open for trading on
such date or if the Shares are not traded on such date, on the most recent
preceding date when it is open for trading or the Shares are traded; provided,
however, that the Committee may in its discretion designate the actual sales
price as Fair Market Value in the case of disposition of Shares under the Plan.

(l)   "Incentive Stock Option" shall mean an option granted under Section 6(a)
of the Plan that is intended to meet the requirements of Section 422 of the Code
or any successor provision.

(m)   "Non Qualified Stock Option" shall mean an option granted under Section
6(a) of the Plan that is not intended to be an Incentive Stock Option.

(n)   "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option, and shall include Reload Options.

(o)   "Other Stock Grant" shall mean any right granted under Section 6(e) of the
Plan.

(p)   "Other Stock-Based Award" shall mean any right granted under Section 6(f)
of the Plan.

(q)   "Participant" shall mean an Eligible Person designated to be granted an
Award under the Plan. A Participant shall cease to be such under the Plan after
all Awards granted to him or her are no longer exercisable or outstanding.

(r)   "Performance Award" shall mean any right granted under Section 6(d) of the
Plan.

(s)   "Performance Criteria" shall mean objectives stated with respect to (i)
shareholder value based on Fair Market Value, dividends or Fair Market Value and
dividends, (ii) comparative performance against companies in a benchmark index
selected by the Committee, (iii) earnings per share or earnings per share
growth, (iv) return on equity, (v) economic value added, (vi) cash flow or (vii)
return on capital.

(t)   "Person" shall mean any individual, corporation, partnership, association
or trust.

(u)   "Plan" shall mean the Beijing Med-Pharm Corporation 2004 Stock Incentive
Plan, as amended from time to time, the provisions of which are set forth
herein.

(v)   "Reload Option" shall mean any Option granted under Section 6(a)(iv) of
the Plan.

(w)   "Restricted Stock" shall mean any Shares granted under Section 6(c) of the
Plan.

(x)   "Restricted Stock Unit" shall mean any unit granted under Section 6(c) of
the Plan evidencing the right to receive a Share (or a cash payment equal to the
Fair Market Value of a Share) at some future date.

(y)   "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule or regulation.

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(z)   "Shares" shall mean shares of Common Stock, $0.001 par value per share, of
the Company or such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.

(aa)  "Stock Appreciation Right" shall mean any right granted under Section 6(b)
of the Plan.

SECTION 3. ADMINISTRATION.

(a)   Power and Authority of the Committee. The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan and to applicable
law, the Committee shall have full power and authority to: (i) designate those
Eligible Persons who are to be Participants; (ii) determine the type or types of
Awards to be granted to each Participant under the Plan; (iii) determine the
number of Shares to be covered by (or with respect to which payments, rights or
other matters are to be calculated in connection with) each Award; (iv)
determine the terms and conditions of any Award or Award Agreement; (v) amend
the terms and conditions of any Award or Award Agreement and accelerate the
exercisability of Options or the lapse of restrictions relating to Restricted
Stock, Restricted Stock Units or other Awards; (vi) determine whether, to what
extent and under what circumstances Awards may be exercised in cash, Shares,
other securities, other Awards or other property, or canceled, forfeited or
suspended; (vii) determine whether, to what extent and under what circumstances
cash, Shares, promissory notes, other securities, other Awards, other property
and other amounts payable with respect to an Award under the Plan shall be
deferred either automatically or at the election of the holder thereof or the
Committee; (viii) interpret and administer the Plan and any instrument or
agreement, including an Award Agreement, relating to the Plan; (ix) establish,
amend, suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (x) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon any Participant, any holder
or beneficiary of any Award and any employee of the Company or any Affiliate.

(b)   Delegation. The Committee may delegate its powers and duties under the
Plan to one or more Directors or a committee of Directors, subject to such
terms, conditions and limitations as the Committee may establish in its sole
discretion.

(c)   Power and Authority of the Board of Directors. Notwithstanding anything to
the contrary contained herein, the Board may, at any time and from time to time,
without any further action of the Committee, exercise the powers and duties of
the Committee under the Plan.

SECTION 4. SHARES AVAILABLE FOR AWARDS.

(a)   Shares Available. Subject to adjustment as provided in Section 4(c) of the
Plan, the aggregate number of Shares that may be issued under all Awards under
the Plan shall be 2,500,000. Shares to be issued under the Plan may be either
authorized but unissued Shares or Shares acquired in the open market or
otherwise. Any Shares that are used by a Participant as full or partial payment
to the Company of the purchase price relating to an Award, or in connection with
the satisfaction of tax obligations relating to an Award, shall again be
available for granting Awards (other than Options) under the Plan. In addition,
if any Shares covered by an Award or to which an Award relates are not purchased
or are forfeited, or if an Award otherwise terminates without delivery of any
Shares, then the number of Shares counted against the aggregate number of Shares
available under the Plan with respect to such Award, to the extent of any such
forfeiture or termination, shall again be available for granting Awards under
the Plan.

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(b)   Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan.

(c)   Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and type of Shares (or
other securities or other property) that thereafter may be made the subject of
Awards, (ii) the terms and conditions and the number and type of Shares (or
other securities or other property) subject to outstanding Awards and (iii) the
purchase or exercise price with respect to any Award; provided, however, that
the number of Shares covered by any Award or to which such Award relates shall
always be a whole number.

(d)   Award Limitations Under the Plan. No Eligible Person may be granted any
Award or Awards under the Plan, the value of which Award or Awards is based
solely on an increase in the value of the Shares after the date of grant of such
Award or Awards, for more than 400,000 Shares (subject to adjustment as provided
for in Section 4(c) of the Plan), in the aggregate in any calendar year. No
Eligible Person may be granted any Award or Awards under the Plan, the value of
which Award or Awards is not based solely on an increase in the value of the
Shares after the date of grant of such Award or Awards, for more than 100,000
Shares (subject to adjustment as provided for in Section 4(c) of the Plan), in
the aggregate in any calendar year. The foregoing annual limitation specifically
includes the grant of any Award or Awards representing "qualified
performance-based compensation" within the meaning of Section 162(m) of the
Code. The foregoing annual limitations specifically include the grant of any
Award or Awards representing "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code.

SECTION 5. ELIGIBILITY.

      Any Eligible Person shall be eligible to be designated a Participant. An
Incentive Stock Option may only be granted to full or part-time employees (which
term as used herein includes, without limitation, officers and Directors who are
also employees), and an Incentive Stock Option shall not be granted to an
employee of an Affiliate unless such Affiliate is also a "subsidiary
corporation" of the Company within the meaning of Section 424(f) of the Code or
any successor provision.

SECTION 6. AWARDS.

(a)   Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

            (i)   Exercise Price. The purchase price per Share purchasable under
      an Option shall be determined by the Committee; provided, however, that
      such purchase price shall not be less than 100% of the Fair Market Value
      of a Share on the date of grant of such Option.

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            (ii)  Option Term. The term of each Option shall be fixed by the
      Committee but no Option shall be exercisable more than ten years after the
      grant date.

            (iii) Time and Method of Exercise. The Committee shall determine the
      time or times at which an Option may be exercised in whole or in part and
      the method or methods by which, and the form or forms (including, without
      limitation, cash, Shares, promissory notes, other securities, other Awards
      or other property, or any combination thereof, having a Fair Market Value
      on the exercise date equal to the relevant exercise price) in which,
      payment of the exercise price with respect thereto may be made or deemed
      to have been made.

            (iv)  Reload Options. The Committee is hereby authorized to grant
      Reload Options, separately or together with another Option, pursuant to
      which, subject to the terms and conditions established by the Committee,
      the Participant will be granted a new Option (the Reload Option) when
      payment of all or a portion of the exercise price of a previously granted
      option is made by the delivery of Shares owned by the Participant, and/or
      when Shares are tendered or withheld as payment of all or a portion of the
      amount to be withheld under applicable income tax laws in connection with
      the exercise of an option. The Reload Option will be an Option to purchase
      that number of Shares not exceeding the sum of (A) the number of Shares
      used for payment of the exercise price of the previously granted option to
      which such Reload Option relates and (B) the number of Shares tendered or
      withheld as payment of the amount to be withheld under applicable tax laws
      in connection with the exercise of the option to which such Reload Option
      relates. Reload Options may be granted with respect to Options previously
      granted under the Plan or with respect to options under any other stock
      option plan of the Company or may be granted in connection with any Option
      granted under the Plan or under any other stock option plan of the Company
      at the time of such grant. Such Reload Options shall have a per share
      exercise price equal to the Fair Market Value of one Share as of the date
      of grant of the new Reload Option.

(b)   Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants subject to the terms of the Plan and
any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise thereof
the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall determine, at any time during a specified period
before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which price shall not be less
than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan and any applicable
Award Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.

(c)   Restricted Stock and Restricted Stock Units. The Committee is hereby
authorized to grant Restricted Stock and Restricted Stock Units to Participants
with the following terms and conditions and with such additional terms and
conditions not inconsistent with the provisions of the Plan as the Committee
shall determine:

            (i)   Restrictions. Shares of Restricted Stock and Restricted Stock
      Units shall be subject to such restrictions as the Committee may impose
      (including, without limitation, a waiver by the Participant of the right
      to vote or to receive any dividend or other right or property with respect
      thereto), which restrictions may lapse separately or in combination at
      such time or times, in such installments or otherwise as the Committee may
      deem appropriate.

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            (ii)  Stock Certificates. Any Restricted Stock granted under the
      Plan shall be registered in the name of the Participant and shall bear an
      appropriate legend referring to the terms, conditions and restrictions
      applicable to such Restricted Stock. In the case of Restricted Stock
      Units, no Shares shall be issued at the time such Awards are granted.

            (iii) Forfeiture. Except as otherwise determined by the Committee,
      upon termination of employment (as determined under criteria established
      by the Committee) during the applicable restriction period, all Shares of
      Restricted Stock and all Restricted Stock Units at such time subject to
      restriction shall be forfeited and reacquired by the Company; provided,
      however, that the Committee may waive in whole or in part any or all
      remaining restrictions with respect to Shares of Restricted Stock or
      Restricted Stock Units. Upon the lapse or waiver of restrictions and the
      restricted period relating to Restricted Stock Units evidencing the right
      to receive Shares, such Shares shall be issued and delivered to the
      holders of the Restricted Stock Units.

(d)   Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or
other property and (ii) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to the
terms of the Plan and any applicable Award Agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.

(e)   Other Stock Grants. The Committee is hereby authorized, subject to the
terms of the Plan and any applicable Award Agreement, to grant to Participants
Shares without restrictions thereon as are deemed by the Committee to be
consistent with the purpose of the Plan.

(f)   Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants subject to the terms of the Plan and any applicable Award
Agreement, such other Awards that are denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in form or forms (including, without limitation,
cash, Shares, promissory notes, other securities, other Awards or other property
or any combination thereof), as the Committee shall determine, the value of
which consideration, as established by the Committee, shall not be less than
100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.

(g)   General.

            (i)   No Cash Consideration for Awards. Awards shall be granted for
      no cash consideration or for such minimal cash consideration as may be
      required by applicable law.

            (ii)  Awards May Be Granted Separately or Together. Awards may, in
      the discretion of the Committee, be granted either alone or in addition
      to, in tandem with or in substitution for any other Award or any award
      granted under any plan of the Company or any Affiliate other than the
      Plan. Awards granted in addition to or in tandem with other Awards or in
      addition to or in tandem with awards granted under any such other plan of
      the Company or any Affiliate may be

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      granted either at the same time as or at a different time from the grant
      of such other Awards or awards.

            (iii) Forms of Payment under Awards. Subject to the terms of the
      Plan and of any applicable Award Agreement, payments or transfers to be
      made by the Company or an Affiliate upon the grant, exercise or payment of
      an Award may be made in such form or forms as the Committee shall
      determine (including, without limitation, cash, Shares, promissory notes,
      other securities, other Awards or other property or any combination
      thereof), and may be made in a single payment or transfer, in installments
      or on a deferred basis, in each case in accordance with rules and
      procedures established by the Committee. Such rules and procedures may
      include, without limitation, provisions for the payment or crediting of
      reasonable interest on installment or deferred payments or the grant or
      crediting of dividend equivalents with respect to installment or deferred
      payments.

            (iv)  Limits on Transfer of Awards. No Award (other than Other Stock
      Grants) and no right under any such Award shall be transferable by a
      Participant otherwise than by will or by the laws of descent and
      distribution; provided, however, that, if so determined by the Committee,
      a Participant may, in the manner established by the Committee, transfer
      Options (other than Incentive Stock Options) or designate a beneficiary or
      beneficiaries to exercise the rights of the Participant and receive any
      property distributable with respect to any Award upon the death of the
      Participant. Each Award or right under any Award shall be exercisable
      during the Participant's lifetime only by the Participant or, if
      permissible under applicable law, by the Participant's guardian or legal
      representative. No Award or right under any such Award may be pledged,
      alienated, attached or otherwise encumbered, and any purported pledge,
      alienation, attachment or encumbrance thereof shall be void and
      unenforceable against the Company or any Affiliate.

            (v)   Term of Awards. The term of each Award shall be for such
      period as may be determined by the Committee, but in no event more than
      ten years.

            (vi)  Restrictions; Securities Exchange Listing. All Shares or other
      securities delivered under the Plan pursuant to any Award or the exercise
      thereof shall be subject to such restrictions as the Committee may deem
      advisable under the Plan, applicable federal or state securities laws and
      regulatory requirements, and the Committee may cause appropriate entries
      to be made or legends to be affixed to reflect such restrictions. If any
      securities of the Company are traded on a securities exchange, the Company
      shall not be required to deliver any Shares or other securities covered by
      an Award unless and until such Shares or other securities have been
      admitted for trading on such securities exchange.

            (vii) Performance-Based Compensation. Awards under Sections 6(c),
      6(d), 6(e) and 6(f) may be granted upon such terms and conditions as the
      Committee determines is appropriate or advisable in order for such awards
      to qualify as performance-based compensation under Section 162(m) of the
      Code. Without limiting the generality of the foregoing, the terms and
      conditions may be based on the achievement of objectives stated with
      respect to one or more Performance Criteria.

SECTION 7. CHANGE IN CONTROL PROVISIONS.

(a)   Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control:

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All Options and Stock Appreciation Rights outstanding as of the date such Change
in Control occurs shall become fully vested and exercisable.

The restrictions and other conditions applicable to any Restricted Stock,
Restricted Stock Unit, Other Stock Grant or Other Stock-Based Awards, including
vesting requirements, shall lapse, and such Awards shall become free of all
restrictions and fully vested.

The value of all outstanding Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Other Stock Grants and Other Stock-Based Awards
shall, unless otherwise determined by the Committee at or after grant, be cashed
out on the basis of the "Change in Control Price," as defined in Section 7(c),
as of the date such Change in Control occurs or such other date as the Committee
may determine prior to the Change in Control.

Any Performance Award that has been earned but not paid shall become immediately
payable in cash.

(b)   Definition of Change in Control. A "Change in Control" means the happening
of any of the following events:

if (A) any "person" (as such term is used in sections 13(d) and 14(d) of the
Exchange Act other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 40% or more of the
combined voting power of the Company's then outstanding securities (a "40%
Holder"); or (B) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new Director (other
than a Director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clauses (A) or (C) of this
subsection) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least three-fourths (3/4) of
the Directors then still in office who either were Directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Directors of the
Company; or (C) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets;
provided, however, that a Change of Control shall not be deemed to have occurred
under clauses (A) or (C) above if a majority of the Continuing Directors (as
defined below) determine within five business days after the occurrence of any
event specified in clauses (A) or (C) above that control of the Company has not
in fact changed and it is reasonably expected that such control of the Company
in fact will not change. Notwithstanding that, in the case of clause (A) above,
the Board shall have made a determination of the nature described in the
preceding sentence, if there shall thereafter occur any material change in facts
involving, or relating to, the 40% Holder or to the 40% Holder's relationship to
the Company, including, without limitation, the acquisition by the 40% Holder of
1% or more additional outstanding voting stock of the Company, the occurrence of
such material change in facts shall result in a new Change of Control for the
purpose of this Plan. In such event, the second immediately preceding sentence
hereof shall be effective. As used herein, the term "Continuing Director" shall
mean any member of the Board on the date of the adoption of this Plan and any
successor of a Continuing Director who is recommended to succeed the Continuing
Director by a majority of

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Continuing Directors. Notwithstanding any other provision of this Plan to the
contrary, beneficial ownership of securities of the Company representing 40% or
more of the combined voting power of the Company's then outstanding securities
by Abacus Investments Limited shall not constitute a Change in Control.

(c)   Change in Control Price. "Change in Control Price" means the highest price
per share paid in any transaction reported on The NASDAQ Stock Market or paid or
offered in any bona fide transaction related to a change in control of the
Company at any time during the preceding 60-day period as determined by the
Committee, except that, in the case of Incentive Stock Options, such price shall
be based only on transactions reported for the date on which such Incentive
Stock Options are cashed out.

Notwithstanding any other provision of the Plan, upon a Change in Control,
unless the Committee shall determine otherwise at grant, an Award recipient
shall have the right, by giving notice to the Company within the exercise
period, to elect to surrender all or part of the Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Other Stock Grant or Other
Stock-Based Award to the Company and to receive in cash, within 30 days of such
notice, an amount equal to the amount by which the "Change in Control Price" on
the date of such notice shall exceed the exercise or grant price under such
Award, multiplied by the number of Shares as to which the right granted under
this Section 7 shall have been exercised.

SECTION 8. AMENDMENT AND TERMINATION; ADJUSTMENTS.

(a)   Amendments to the Plan. The Board may amend, alter, suspend, discontinue
or terminate the Plan at any time; provided, however, that, notwithstanding any
other provision of the Plan or any Award Agreement, without the approval of the
shareholders of the Company, no such amendment, alteration, suspension,
discontinuation or termination shall be made that, absent such approval:

      (i)   would violate the rules or regulations of The NASDAQ Stock Market or
            any securities exchange upon which the Shares are listed;

      (ii)  would cause the Company to be unable, under the Code, to grant
            Incentive Stock Options under the Plan; or

      (iii) would decrease the grant or exercise price of any Option, Stock
            Appreciation Right, Other Stock Grant or Other Stock Based Award to
            less than the Fair Market Value on the date of grant.

(b)   Amendments to Awards. The Committee may waive any conditions of or rights
of the Company under any outstanding Award, prospectively or retroactively.
Except as otherwise provided herein or in the Award Agreement, the Committee may
not amend, alter, suspend, discontinue or terminate any outstanding Award,
prospectively or retroactively, if such action would adversely affect the rights
of the holder of such Award, without the consent of the Participant or holder or
beneficiary thereof.

(c)   Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.

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SECTION 9. INCOME TAX WITHHOLDING; TAX BONUSES.

(a)   Withholding. In order to comply with all applicable federal or state
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal or state payroll, withholding,
income or other taxes, which are the sole and absolute responsibility of a
Participant, are withheld or collected from such Participant. In order to assist
a Participant in paying all or a portion of the federal and state taxes required
to be withheld or collected upon exercise or receipt of (or the lapse of
restrictions relating to) an Award, the Committee, in its discretion and subject
to such additional terms and conditions as it may adopt, may permit the
Participant to satisfy such required tax obligation by (i) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes or (ii) delivering to the Company
Shares other than Shares assumable upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value equal to the
amount of such taxes. The election, if any, must be made on or before the date
that the amount of tax to be withheld is determined.

(b)   Tax Bonuses. The Committee, in its discretion, shall have the authority,
at the time of grant of any Award under this Plan or at any time thereafter, to
approve cash bonuses to designated Participants to be paid upon their exercise
or receipt of (or the lapse of restrictions relating to) Awards in order to
provide funds to pay all or a portion of federal and state taxes due as a result
of such exercise or receipt (or the lapse of such restrictions). The Committee
shall have full authority in its discretion to determine the amount of any such
tax bonus.

SECTION 10. GENERAL PROVISIONS.

(a)   No Rights to Awards. No Eligible Person, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.

(b)   Award Agreements. No Participant will have rights under an Award granted
to such Participant unless and until an Award Agreement shall have been duly
executed on behalf of the Company and, if requested by the Company, signed by
the Participant.

(c)   No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect
other or additional compensation arrangements, and such arrangements may be
either generally applicable or applicable only in specific cases.

(d)   No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ or service of the
Company or any Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment or service at any time, with or
without cause. In addition, the Company or an Affiliate may at any time dismiss
a Participant from employment or service free from any liability or any claim
under the Plan or any Award, unless otherwise expressly provided in the Plan or
in any Award Agreement.

(e)   Governing Law. The validity, construction and effect of the Plan or any
Award, and any rules and regulations relating to the Plan or any Award, shall be
determined in accordance with the laws of the State of Delaware.

                                      A-10
<PAGE>

(f)   Severability. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

(g)   No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.

(h)   No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee, shall determine whether
cash shall be paid in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.

(i)   Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience, to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

SECTION 11. EFFECTIVE DATE OF THE PLAN.

The Plan was approved by the Board on February 10, 2004, subject to approval by
the shareholders of the Company within twelve (12) months theretofore. Any Award
granted under the Plan prior to shareholder approval of the Plan shall be
subject to shareholder approval of the Plan.

SECTION 12. TERM OF THE PLAN.

No Award shall be granted under the Plan after February 10, 2009 or an earlier
date of discontinuation or termination established pursuant to Section 7(a) of
the Plan. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may extend beyond such
date.

                                      A-11<PAGE>

                                                                    EXHIBIT 10.4

                                                             [EXECUTION VERSION]

                 SHARE TRANSFER AND DEBT RESTRUCTURING AGREEMENT

                                   RELATING TO

                     BEIJING WANWEI PHARMACEUTICAL CO. LTD.

                                     BETWEEN

                       BEIJING WANHUI PHARMACEUTICAL GROUP

                                       AND

                          BEIJING MED-PHARM CORPORATION

                             DATED DECEMBER 15, 2004

<PAGE>

                                     CONTENT

<TABLE>
<CAPTION>
CLAUSE                                                                                                        PAGE
------                                                                                                        ----
<S>                                                                                                           <C>
RECITALS...................................................................................................    1

ARTICLE 1  SHARE TRANSFER..................................................................................    2

ARTICLE 2  DEBT RESTRUCTUING AND CONSIDERATRION FOR THE SHARE TRANSFER.....................................    4

ARTICLE 3  ARRANGEMENTS DURING TRANSITION PERIOD...........................................................    8

ARTICLE 4  REPRESENTATIONS, WARRANTIES AND UNDETAKINGS.....................................................    8

ARTICLE 5  EFFECTIVENESS AND TERMINATION...................................................................   11

ARTICLE 6  FORCE MAJEURE...................................................................................   12

ARTICLE 7  BREACH OF CONTRACT..............................................................................   12

ARTICLE 8  DISPUTE RESOLUTION..............................................................................   13

ARTICLE 9  GOVERNING LAW...................................................................................   14

ARTICLE 10 NOTICES.........................................................................................   14

ARTICLE 11 MISCELLANEOUS PROVISIONS........................................................................   14

SIGNATURE PAGE.............................................................................................   16

SCHEDULE 1.................................................................................................   18

SCHEDULE 2.................................................................................................   22

SCHEDULE 3A................................................................................................   23

SCHEDULE 3B................................................................................................   24

SCHEDULE 3C................................................................................................   25

SCHEDULE 3D................................................................................................   26

SCHEDULE 4.................................................................................................   28

SCHEDULE 5.................................................................................................   38

SCHEDULE 6.................................................................................................   39

SCHEDULE 7.................................................................................................   44

SCHEDULE 8.................................................................................................   51
</TABLE>

<PAGE>

                 SHARE TRANSFER AND DEBT RESTRUCTURING AGREEMENT

This Share Transfer and Debt Restructuring Agreement (this "AGREEMENT") is made
in Beijing on December 15, 2004 by and between:

(1)   BEIJING WANHUI PHARMACEUTICAL GROUP ("WANHUI GROUP"), a wholly state owned
      enterprise organized and existing under the laws of the People's Republic
      of China (the "PRC"), with its domicile at No. 129, Xuanwumen Xi Da Jie,
      Xicheng District, Beijing, legal representative being Zhaoyi Wang;

(2)   BEIJING MED-PHARM COPORATION ("BMP"), a corporation organized under the
      laws of the State of Delaware, the United States, with its domicile at
      1180 Main Street, Coventry, CT 06238, legal representative being Xiaoying
      Gao (Title: Chief Executive Officer and President; Nationality: USA).

Wanhui Group and BMP hereinafter individually referred to as a "PARTY" and
collectively referred to as the "PARTIES".

                                    RECITALS

(1)   WHEREAS, Beijing Wanwei Pharmaceutical Co., Ltd. (the "COMPANY") is a
      limited liability company established under the laws of the PRC, with its
      registered capital being RMB5,880,000.00 yuan. Wanhui Group holds 80% of
      its equity interests, and Wen Xinholds the remaining 20%;

(2)   WHEREAS, meanwhile Wanhui Group is a creditor of the Company. Since the
      Company is not able to discharge its indebtedness due and payable to
      Wanhui Group, Wanhui Group wishes to restructure the debt of the Company
      pursuant to the terms and conditions of this Agreement with the
      participation of BMP and to transfer its equity interests in the Company
      to BMP;

(3)   WHEREAS, BMP agrees to acquire Wanhui Group's equity interests in the
      Company and to participate in the debt restructuring of the Company as per
      the terms and conditions of this Agreement;

(4)   WHEREAS, BMP has entered into a Share Transfer Agreement with Wen Xin, the
      other shareholder of the Company, on the date hereof to acquire [name of
      the other shareholder of the Company]'s equity interests in the Company;

(5)   WHEREAS, Wanhui Group and Wen Xin agree to increase the registered capital
      of the Company from the current RMB5,880,000.00 yuan to US$ 1,750,000, and
      the amount of increased capital US$1,039,000 shall be fully subscribed by
      BMP;

                                     - 1 -
<PAGE>

(6)   WHEREAS, both Parties acknowledge that the contemplated share transfer,
      capital increase and the debt restructuring of the Company shall be
      completed in compliance with the requirements of the relevant laws and
      regulations of the PRC and the provisions of the Articles of Association
      of the Company;

(7)   WHEREAS, the Company has reported to the employees' representative meeting
      in respect of the restructuring of the Company with the participation of
      foreign investment. And Beijing Pharmaceutical Group Co., Ltd., its
      state-owned assets administration entity, has agreed with the contemplated
      debt restructuring and share transfer hereunder.

NOW,  THEREFORE Wanhui Group and BMP hereby agree as follows:

                            ARTICLE 1 SHARE TRANSFER

1.1   Wanhui Group agrees to transfer to BMP and BMP agrees to acquire from
      Wanhui Group the 80% equity interest (the "TRANSFERRED SHARES") held by
      Wanhui Group in the Company on the terms and conditions of this Agreement.

      Wanhui Group agrees that BMP shall fully subscribe the amount of the
      increased capital of the Company (the "AMOUNT OF INCREASED CAPITAL"),
      i.e.US$1,039,000. BMP shall contribute such Amount of Increased Capital to
      the Company in accordance with the provisions of the revised and restated
      Articles of Association of the Company.

1.2   Both Parties agree that from the date when all of the following conditions
      precedent have been satisfied (the "DATE OF TRANSFER"), BMP shall be the
      owner of the Transferred Shares and become the shareholder of the Company:

      (1)   For the purpose of the transactions hereunder, Wanhui Group has been
            provided by Yue Hua Certified Accounting Firm with the Asset
            Evaluation Report (summary attached hereto as Schedule 1) with the
            base date being April 30, 2004 (the "BASE DATE"). And such report
            has been filed with Beijing State-owned Assets Administration Bureau
            or its authorized entity, Beijing Pharmaceutical Group Co., Ltd.;

      (2)   Beijing State-owned Assets Administration Bureau or its authorized
            entity, Beijing Pharmaceutical Group Co., Ltd., has approved the
            terms and conditions of the debt restructuring and share transfer
            provided in this Agreement;

      (3)   Wanhui Group has listed the Transferred Shares at Beijing Equity
            Exchange and BMP has become the transferee of the Transferred
            Shares;

      (4)   The share transfer contemplated under this Agreement, the share
            transfer

                                     - 2 -
<PAGE>

            contemplated under the Share Transfer Agreement between BMP and
            [name of the other shareholder of the Company], and the revised
            Articles of Association of the Company have been approved by the
            Ministry of Commerce or its authorized authority (the "EXAMINATION
            AND APPROVAL AUTHORITY") and the Company has been issued with an
            Approval Certificate of Foreign Investment Enterprise;

      (5)   Beijing Drug Administration Bureau has renewed the Pharmaceutical
            Distribution License of the Company for an additional five years and
            has approved the change of legal representative and other issues (if
            any) thereon;

      (6)   The amendment registration in respect of the share transfer
            contemplated hereunder, the share transfer contemplated under the
            Share Transfer Agreement between BMP and Wen Xin, and the revised
            Articles of Association of the Company has been effected with
            Beijing Administration for Industry and Commerce (the "REGISTRATION
            AUTHORITY"); and

      (7)   There shall have been no material adverse change in the financial
            condition, operations or business prospects of the Company during
            the Transition Period, as such terms are defined in Article 3.1,
            with the exception of any such material adverse change resulting
            from an action or inaction taken by the Company with the approval of
            the Supervision Committee as such terms are defined in Article 3.1.

      Upon the completion of the share transfer hereunder and the share transfer
      as contemplated under the share transfer agreement between BMP and [name
      of the other shareholder of the Company], BMP shall become the sole
      shareholder of the Company, and the Company shall be converted into a
      wholly foreign owned enterprise pursuant to the PRC law.

1.3   Wanhui Group confirms that, prior to the execution of this Agreement, the
      shareholders' meeting of the Company has adopted a valid resolution
      approving the transfer of the Transferred Shares to BMP from Wanhui Group,
      the subscription by BMP of the Amount of Increased Capital and the
      corresponding amendments to the Articles of Association of the Company.

1.4   Wanhui Group confirms that Wen Xin has waived its right of first refusal
      with respect to the Transferred Shares prior to the execution of this
      Agreement, and its consent letter is attached hereto as Schedule 2.

1.5   No later than three (3) months after the date hereof, both parties shall
      cause the Company to submit this Agreement, the revised Articles of
      Association of the Company and an original copy of the duly signed
      resolution referred to in Article 1.3 above together with other necessary
      application documents to the Examination and Approval Authority.

1.6   Both Parties shall take their best endeavour to obtain the approval from
      the Examination and Approval Authority, to assist the Company in going
      through the amendment registration

                                     - 3 -
<PAGE>

      formalities with the Registration Authority and to obtain other government
      approval, verification or registration which are required for the purpose
      to implement the share transfer and debt restructuring hereunder.

      ARTICLE 2 DEBT RESTRUCTUING AND CONSIDERATRION FOR THE SHARE TRANSFER

2.1   Debts to be restructured

      Wanhui Group hereby represents and confirms that the following credit
      rights and debt between the Company and itself shall be restructured in
      accordance with the terms and conditions of this Agreement:

      (1)   RMB50,160,000.00 yuan owing to Wanhui Group by the Company as of the
            Base Date, including the principal and interests accrued thereon,
            the breakdown of which has been confirmed by Wanhui Group and the
            Company in writing and attached hereto as Schedule 3 (A); Wanhui
            Group confirms that such amount has contained all amounts owing to
            it by the Company as of the Base Date, excluding those incurred as a
            result of the normal business transactions with the Company;

      (2)   RMB12,820,000.00 yuan owing to the Company by Wanhui Group as of the
            Base Date (no interest was charged thereon), which does not include
            any debt incurred in its normal course of business with Wanhui
            Group, and the breakdown of which has been confirmed by Wanhui Group
            and the Company in writing and attached hereto as Schedule 3 (B);

      (3)   RMB7,000,000.00 yuan owing to Wanhui Group by the Company incurred
            after the Base Date, excluding any accrued interest thereon, the
            breakdown of which has been confirmed by Wanhui Group and the
            Company in writing and attached hereto as Schedule 3 (C); Wanhui
            Group confirms that such amount has contained all amounts owing to
            it by the Company from the Base Date till the date hereof, excluding
            those incurred as a result of the normal business transactions with
            the Company.

2.2   Debt Restructuring and the Payment of Considerations for Share Transfer

      As conditions to the share transfer hereunder, both Parties agree to have
      the credit rights and debts between Wanhui Group and the Company provided
      in Article 2.1 restructured as follows:

2.2.1 Set-off of the credit rights and indebtedness

      As the pre-condition for BMP to acquire the Transferred Shares from Wanhui
      Group and perform its obligations provided in Articles 2.2.2 and 2.2.3
      herebelow, Wanhui Group

                                     - 4 -
<PAGE>

      agrees that:

      (1)   No interests shall be accrued on the amount owing to Wanhui Group by
            the Company as set forth in Article 2.1(1) from the Base Date;

      (2)   The amount owing to Wanhui Group by the Company under Article 2.1(1)
            shall be set off against the amount owing to the Company by Wanhui
            Group under Article 2.1(2) on the date hereof. The confirmation
            letter issued by Wanhui Group and the Company with respect to their
            mutual acknowledgement to such set-off is attached hereto as
            Schedule 3(D).

      After the set-off mentioned above, the net amount owing to Wanhui Group by
      the Company which shall be restructured in accordance with the provisions
      herebelow shall be RMB 44,340,000.00 yuan or other amount as adjusted as
      per Article 2.4 hereof.

2.2.2 Debt to be paid by BMP on behalf of the Company

      As one of the considerations for transferring the Transferred Shares by
      Wanhui Group to BMP, BMP agrees to pay Wanhui Group as per this Article
      2.2.2.

      (1)   With respect to the net debt owing to Wanhui Group by the Company as
            provided in Article 2.2.1(2), BMP agrees to pay RMB 8 million yuan
            or other amount as adjusted as per Article 2.4 herein (the "DEBT TO
            BE PAID BY BMP") in accordance with the terms and conditions
            hereunder;

      (2)   Within ten (10) working days from the date hereof, BMP shall
            pay,through the Company,Wanhui Group 30% of the Debt to be Paid by
            BMP as down payment ("DOWN PAYMENT").

            Should this Agreement be terminated due to Wanhui Group, Wanhui
            Group shall return BMP the Down Payment plus the interest thereon
            calculated at prevailing deposit interest rate with the same tenure
            within five (5) working days upon the receipt of payment notice from
            BMP.

            Should this Agreement be terminated due to BMP, Wanhui Group will
            not return the Down Payment.

            Should this Agreement be terminated due to reasons neither
            attributable to Wanhui Group nor BMP, Wanhui Group shall return BMP
            the Down Payment plus the interest thereon calculated at prevailing
            deposit interest rate with the same tenure within five (5) working
            days upon the receipt of payment notice from BMP.

      (3)   Subject to the satisfaction of the following conditions, BMP shall,
            through the Company, pay Wanhui Group the rest of the Debt to be
            Paid by BMP within thirty

                                     - 5 -
<PAGE>

            (30) working days after the Date of Transfer:

            (a)   All the Schedules hereof have been executed pursuant to the
                  provided form and have become effective; and

            (b)   Wanhui Group has not violated any of its representations,
                  warranties and undertaking made hereunder.

            Except otherwise mutually agreed in writing, BMP shall be entitled
            to terminate this Agreement if the above conditions fail to be
            satisfied within three (3) months after the Date of Transfer.

      (4)   BMP shall make payment in accordance with this Article 2.2.2 in
            equivalent US dollars amount calculated at the average rate between
            US dollars and RMB promulgated by the People's Bank of China on the
            date of payment. Wanhui Group shall notify BMP in writing of its
            bank account to receive such payments and the payment itinerary in
            advance.

2.2.3 Debt to be paid via loan arranged by BMP

      In addition to Article 2.2.2, as the other consideration for transferring
      the Transferred Shares by Wanhui Group to BMP, BMP agrees to arrange
      entrusted loan to the Company as per this Article 2.2.3 in order to enable
      the Company to repay Wanhui Group in accordance with the following
      provisions.

      (1)   With respect to the net debt owing to Wanhui Group by the Company as
            provided in Article 2.2.1(2), BMP agrees to arrange a lender to
            provide entrusted loan to the Company in order to enable the Company
            to repay RMB7 million yuan (the "DEBT PAID VIA ARRANGEMENT BY BMP")
            to Wanhui Group;

      (2)   The Company, the lender arranged by BMP and CITIC Industrial Bank
            shall enter into an entrusted loan contract substantially complying
            with Schedule 4 hereof on the date hereof. The facility amount shall
            be applied to repay Wanhui Group the amount owing to Wanhui Group
            set forth in Clause 2.2.3(1) within five (5) working days as of the
            date hereof;

      (3)   Should this Agreement be terminated due to Wanhui Group, and the
            Company fail to repay the lender arranged by BMP the principal and
            interest due plus all reasonable expenses incurred by the lender
            arranged by BMP with regard to such entrusted loan, including but
            not limited to the commission fees thereon (if any), Wanhui Group
            agrees that, as the guarantor of the Company, it shall pay the
            lender arranged by BMP any amount payable by the Company on behalf
            of the Company within five (5) working days after the receipt of the
            notice of repayment from CITIC Industrial Bank.

                                     - 6 -
<PAGE>

            Should this Agreement be terminated due to BMP, the Company shall
            not be obligated to repay the lender arranged by BMP the interest
            due and payable. The Company shall repay the lender arranged by BMP
            the principal within two (2) working days after CITIC Industrial
            Bank issues notice of repayment. If the Company fails to repay the
            principal, Wanhui Group agrees that, as the guarantor of the
            Company, it shall pay such principal to the lender arranged by BMP
            on behalf of the Company within five (5) working days after the
            receipt of the notice of repayment from CITIC Industrial Bank.

            Should this Agreement be terminated due to reasons neither
            attributable to Wanhui Group nor BMP, and the Company fail to repay
            the lender arranged by BMP the principal and interest due plus all
            reasonable expenses incurred by the lender arranged by BMP with
            regard to such entrusted loan, including but not limited to the
            commission fees thereon (if any), Wanhui Group agrees that, as the
            guarantor of the Company, it shall pay the lender arranged by BMP
            any amount payable by the Company on behalf of the Company within
            five (5) working days after the receipt of the notice of repayment
            from CITIC Industrial Bank.

2.2.4 Debt to be forgiven

      As a pre-condition to BMP's acquisition of the Transferred Shares from
      Wanhui Group and BMP's performance of its obligations provided in the
      above-mentioned Articles 2.2.2 and 2.2.3, Wanhui Group agrees that, as of
      the date hereof, except for the Debt to be Paid by BMP and Debt Paid via
      Arrangement by BMP, the Company shall be exempted from paying the rest of
      the net debt provided in Article 2.2.1(2), including the principal and
      accrued interests, totalling RMB29,340,000.00 yuan or other amount as
      adjusted as per Article 2.4 herein (the "FORGIVEN DEBT").

2.3   In consideration that BMP performs its obligations under Articles 2.2.2
      and 2.2.3 herein, Wanhui Group agrees and confirms that BMP shall not be
      obligated to pay any additional amount with respect to the Transferred
      Shares.

2.4   Both Parties confirm that the credit and debt amount provided in Articles
      2.1(1) and 2.1(2) are based on the Asset Evaluation Report issued by Yue
      Hua Certified Accounting Firm.

      Both Parties agree that the amounts of the Debt to be Paid by BMP and/or
      the Forgiven Debt shall be adjusted accordingly should substantial
      mistakes be found in the said evaluation report or the net assets of the
      Company changes substantially during the period from the Base Date to the
      date hereof. Where the net assets of the Company changes beyond RMB
      200,000.00 yuan as confirmed by a PRC certified public accountants
      mutually recognized by both parties in accordance with PRC accounting
      system, the amounts of the Debt to be Paid by BMP shall be increased or
      decreased by such amount. However, any change to the net assets arising
      from the debt restructuring shall not be calculated for such

                                     - 7 -
<PAGE>

      purpose.

      Both parties agree that if the Company need pay any tax due to the debt
      restructuring, the Debt to be Paid by BMP shall be reduced accordingly by
      such amount.

                 ARTICLE 3 ARRANGEMENTS DURING TRANSITION PERIOD

3.1   Both Parties shall take all necessary measures to ensure the proper
      operation and smooth transition of the Company between the date hereof and
      the Date of Transfer ("TRANSITION PERIOD"). Both parties agree that BMP,
      Wanhui Group and [the other shareholder] shall appoints respective
      delegates to establish a supervision committee. Such committee shall be
      composed of seven members, with BMP appointing three, Wanhui Group
      appointing three, the other shareholder appointing one. The chairman of
      the supervision committee shall be from the delegates appointed by BMP.
      Any major decisions shall not be concluded unless approved by half
      (inclusive) of all the members of the supervision committee. No major
      business decision of the Company shall be made without prior consent of
      such supervision committee.

3.2   During the Transition Period, Wanhui Group shall not enter into agreement
      or document related to the Transferred Shares with any third party,
      including but not limited to the transfer of the Transferred Shares in
      whatever means, pledge or any kinds of disposal of the Transferred Shares.

3.3   Wanhui Group agrees that the Company will not make dividend distribution,
      in whatever manner, during the Transition Period. BMP shall be entitled to
      delegate its financial personnel to supervise the financial operation of
      the Company.

              ARTICLE 4 REPRESENTATIONS, WARRANTIES AND UNDETAKINGS

4.1   Each Party represents and warrants to the other Party that, on the date
      hereof, the Date of Transfer and each payment date:

      (1)   It has full power and authorization to execute and perform this
            Agreement and its Schedules;

      (2)   This Agreement shall be legally binding on such Party as of the
            Effective Date; the execution and performance of this Agreement and
            its Schedules to which it is a party does not violate its Articles
            of Association or the provisions of any contracts, agreements or
            other legal documents to which it is a party; and

      (3)   No lawsuit, arbitration or other legal or governmental proceeding is
            pending or threatened against it that would affect its ability to
            perform its obligations under this

                                     - 8 -
<PAGE>

            Agreement.

4.2   Wanhui Group hereby represents and warrants to BMP that, on the date
      hereof, the Date of Transfer and each payment date:

      (1)   The Company is legally incorporated and duly existing under PRC law,
            having all powers and government authorization, permit, consent and
            approval which are required for it to carry out its current
            business, which will not be terminated or prejudiced or may be
            terminated due to the transactions hereunder;

      (2)   Wanhui Group is the sole legal owner of the Transferred Shares. The
            Transferred Shares shall be free of any security interest or any
            third party dispute;

      (3)   Except expressly provided in this Agreement and its Schedules, the
            execution and performance of this Agreement and each Schedule to
            which it is a party shall not be subject to any government approval,
            verification or filling requirement, nor requiring any consent,
            permit or approval of any third party;

      (4)   Except for the interest accrued under the loan provided under
            Schedule 3C, the aggregate principal amount and accrued interest
            owed by the Company to Wanhui Group or any of its affiliates is RMB
            57,160,000.00 yuan and after BMP and/or the Company pays an
            aggregate RMB 15,000,000.00 yuan or other amount adjusted as per
            Article 2.4 herein to Wanhui Group in accordance with the terms of
            this Agreement, neither BMP nor the Company shall have any further
            monetary obligations to Wanhui Group or any of its affiliates.
            "Affiliate" in the Agreement means "(i) any entity that, directly or
            indirectly through one or more intermediaries, controls Wanhui Group
            or is controlled by Wanhui Group or controlled by the same one or
            more intermediaries as Wanhui Group does and (ii) any entity in
            which Wanhui Group has an equity interest greater than
            10% (inclusive).

      (5)   Except as set forth on Schedule 5, the Company does not owe any
            principal amount and/or accrued interest to any third party other
            than those arising from normal business transaction.

      (6)   The number of the existing employees of the Company is eighty-two
            (82), among which, five (5) are engaged as per respective service
            agreement. The Company has entered into labor contracts with the
            rest seventy-seven (77) employees. Except for salary, social
            insurance, economic compensation (if any) and service fee which are
            stipulated in relevant labour contracts, service agreement and
            disclosed in Schedule 6, the Company has no monetary obligations to
            current employees.

      (7)   There are no pending or threatened labour disputes between the
            Company and its existing employees and those who used to be employed
            by the Company. And there exist no situations which may give rise to
            labour disputes. The Company has no

                                     - 9 -
<PAGE>

            monetary obligations to any former employees of the Company which
            have been terminated and such employees have no legal right which
            would require the Company to rehire such former employees.

      (8)   Materials provided to BMP by Wanhui Group directly or via the
            Company (list of which is attached hereto as Schedule 6) are true,
            accurate and complete. Such materials truly and fairly reflect the
            whole assets, actual and contingent liabilities including all
            provisions, tax and social welfare, financial situation of the
            Company on relevant date and operation results of relevant periods.
            Such materials have accurately reflected and disclosed all
            particular items. There exist no other rights or liabilities, actual
            or contingent, except for those which have been disclosed in this
            Agreement including the Schedules hereto;

      (9)   There exists no pending or threatened lawsuit, arbitration, and
            government proceedings against the Company. And there have not
            incurred any events prior to the date hereof which may give rise to
            any such lawsuit, arbitration or government proceedings;

      (10)  The Company shall maintain stability of its current management and
            key employees;

      (11)  The Company has been operating lawfully since its incorporation and
            there has been no material violation of law; and

      (12)  It is the legal owner of the offices and warehouse which the Company
            is using for the time being. It has the full right to lease such
            properties to the Company in accordance with the document set forth
            in Schedule 7 and Schedule 8. It will be responsible for obtaining
            all required approvals and going through all relevant registration
            formalities and bearing relevant fees arising therefrom on its own
            cost to make the lease provided in such Schedules legal and valid.

            Should Schedules 8 cannot be performed, in part or in whole, for
            reason not caused by the Company, Wanhui Group shall find the
            Company other premises which will be identically furnished as the
            current warehouse on same or better terms and conditions.

            Should it fail to find such substitute, it shall be obligated to
            compensate all costs and expenses the Company sustains in finding
            such a substitute.

      (13)  The person who execute this Agreement for and on behalf of Wanhui
            Group shall be the legal representative of Wanhui Group or his/her
            authorized representative, and has right to execute this Agreement
            on behalf of Wanhui Group

4.3   BMP hereby represents and warrants to Wanhui Group that:

                                     - 10 -
<PAGE>

      (1)   BMP is legally incorporated and duly existing under the law of
            Delaware, having all powers and government authorization, permit,
            consent and approval which are required for it to carry out its
            current business, which will not be terminated or prejudiced or may
            be terminated due to the transactions hereunder;

      (2)   BMP shall provide all documents required for going through the share
            transfer, and guarantee the truthfulness and legality of such
            documents.

      (3)   After the Date of Transfer, it will cause the Company to select the
            qualified ones from existing key managerial and technical personnel
            and engage them to proper positions to ensure the continuity and
            stability of the management and operation team of the Company;

      (4)   It will cause the Company to allocate the existing employees
            properly in accordance with the labour laws and regulations and
            relevant employment contracts; However, it will cause the Company to
            renew the employment contracts with those employees, the tenure of
            whose employment contracts is less than one year as of the Date of
            Transfer;

      (5)   It shall increase the registered capital of the Company to US$
            1,750,000 as per the revised Articles of Association of the Company;
            and

      (6)   It shall pay the Debt to be Paid by BMP and arrange the entrusted
            loan in accordance with the terms and conditions of this Agreement;
            and

      (7)   The person who executes this Agreement for and on behalf of BMP
            shall be the legal representative of BMP or his/her authorized
            representative, and has right to execute this Agreement on behalf of
            BMP.

4.4   Both Parties confirm that the execution and performance of this Agreement
      by any Party is in reliance on the above representations and warranties.
      Should any Party find any change with respect to the above prior to the
      Date of Transfer or any payment date, it shall promptly inform the other
      Party in writing. Except otherwise provided herein, both Parties shall
      negotiate to find solution.

                     ARTICLE 5 EFFECTIVENESS AND TERMINATION

5.1   Effectiveness

      This Agreement shall be formed upon the signing by the legal
      representatives or the authorized representatives of the Parties and/or
      being affixed with their official chops, and the part related to the share
      transfer will become effective from the date when approved by

                                     - 11 -
<PAGE>

      the Examination and Approval Authority.

5.2   Termination

      This Agreement may be terminated if any of the following situations
      occurs:

      (1)   If the transfer of the Transferred Shares to BMP has not been
            submitted to the Examination and Approval Authority, or the
            application has been rejected within three (3) months after the date
            hereof; or if the application has not been approved by the
            Examination and Approval Authority, or any of the other conditions
            precedent listed in Article 1.2 has not been met within six (6)
            months after the application has been submitted, either party has
            the right to terminate the Agreement upon written notice to the
            other party but that it will take the consent of both parties to
            extend either of the above periods;

      (2)   Wanhui Group may terminate this Agreement should BMP delay the
            payment of the Debt to be Paid by BMP for a period of more than
            thirty (30) days;

      (3)   Should either Party breach its representation, warranties and
            undertakings herein and fail to cure such breach within thirty (30)
            days after the notification by the other Party, the non-breaching
            Party shall be entitled to terminate this Agreement; or

      (4)   Other situations expressly provided herein or agreed by the Parties

5.3   Should the Agreement be terminated pursuant to Article 5.2, Wanhui Group
      shall return to BMP any amount BMP has paid within five (5) working days
      from the termination date, including the interest calculated at the
      prevailing deposit interest rate with the same tenure.

                             ARTICLE 6 FORCE MAJEURE

Neither party shall be held liable in the event this Agreement is suspended, in
part or in whole, due to force majeure. The party such affected shall notify the
other party in writing within seventy-two (72) hours as of the happening of the
force majeure event, and provide the other party relevant evidencing documents
issued by related government departments within seven (7) days as of the
happening of the force majeure event. Where the force majeure event has lasted
for ninety (90) days, both parties shall negotiate on the performance of this
Agreement, including whether to terminate this Agreement. For the purpose of
this Agreement, any significant adverse change to the business financial and/or
operation of the Company between the date hereof and the Date of Transfer caused
or to be caused by change of law shall be recognized as one type of force
majeure.

                          ARTICLE 7 BREACH OF CONTRACT

Subject to other provisions of this Agreement, one Party shall be deemed to have
violated this

                                     - 12 -
<PAGE>

Agreement if it fails to fulfill any obligations under this Agreement, or any of
its representations and/or warranties under this Agreement is proved to be
untrue or materially incorrect. The breaching Party shall correct its violation
at its own cost within the period required by the other Party in the breaching
notice, in no event more than thirty (30) days since it receives such notice
from the other Party. Except for the other remedies provided in this Agreement,
should the violation have not been corrected after the period requested in the
breaching notice or thirty (30) days, the non-breaching Party shall have the
right to terminate this Agreement and the Party at default shall compensate the
other Party all economic losses incurred from or suffered due to such violation.
The losses will include but not limited to all costs arising from the execution
of this Agreement and the arbitration cost, legal fee, identification fee,
travelling allowances and communication fee related to requiring the party at
default for performance and claiming for liquidated damages.

                          ARTICLE 8 DISPUTE RESOLUTION

8.1   Friendly Consultations

      In the event of any dispute, controversy or claim (collectively,
      "DISPUTE") arising out of or relating to this Agreement, the Parties shall
      attempt in the first instance to resolve such Dispute through friendly
      consultations.

8.2   Arbitration

      (1)   If the Dispute is not resolved by friendly consultations within
            thirty (30) days after the commencement of such friendly
            consultations, then at any time either party may submit the Dispute
            to Hong Kong International Arbitration Center (the "HKIAC") in
            accordance with the United Nations Commission on International Trade
            Law Arbitration Rules (the "UNCITRAL") presently in force, which
            rules are deemed to be incorporated by reference into this clause.

      (2)   The place of arbitration shall be Hong Kong and the arbitration
            shall be conducted in English.

      (3)   The arbitration award shall be final and binding on both Parties,
            and both parties agree to be bound thereby and to act accordingly.

      (4)   The costs of arbitration shall be borne by the Party or Parties as
            designated in the arbitration award.

8.3   Continuing Rights and Obligations

      When any Dispute occurs and is the subject of friendly consultations,
      joint conciliation or arbitration, the Parties shall continue to exercise
      their remaining respective rights, and fulfil their remaining respective
      obligations, under this Agreement, except in respect of those matters
      under Dispute.

                                     - 13 -
<PAGE>

                             ARTICLE 9 GOVERNING LAW

The validity, interpretation and implementation of this Agreement and dispute
resolution shall be governed by the laws of the PRC which are published and
publicly available.

                               ARTICLE 10 NOTICES

Any notice or written communication in connection with this Agreement by any
Party to the other shall be made in both Chinese and English by courier service
or by facsimile. The date of receipt of a notice or communication hereunder
shall be deemed to be seven (7) working days after the letter is given to the
courier service in the case of a courier service delivered letter and two (2)
working days after successful dispatch in the case of a facsimile. All notices
and communications shall be sent to the address set forth below, until the same
is changed by notice given in writing to the other Party:

                   WANHUI GROUP:

                   No. 129, Xuanwumen Xi Da Jie, Xicheng District, Beijing
                   Attention:
                   Facsimile No:

                   With a copy to

                   Beijing Pharmaceutical Group Co. Ltd.

                   No. 30, Hetao Yuan, Guandongdian Bei Jie, Chao Yang
                   District, Beijing
                   Attention:
                   Facsimile No:

                   BMP:

                   Beijing Med-Pharm Corporation
                   1180 Main Street, Coventry, CT 06238
                   Attention: Edvin Norse
                   Facsimile No: 001-860-742-1598

                       ARTICLE 11 MISCELLANEOUS PROVISIONS

11.1  Neither Party may assign this Agreement without the written consent of the
      other Party.

11.2  This Agreement is executed in Chinese and English, each in eight (8)
      originals. Both

                                     - 14 -
<PAGE>

      language versions shall be equally authentic.

11.3  Unless otherwise provided in this Agreement, this Agreement is severable
      in that if any provision hereof is determined to be illegal or
      unenforceable, the invalid provisions shall be deemed deleted without
      affecting the remaining provisions of this Agreement. The Parties shall
      attempt to replace the invalid provisions with valid provisions as closely
      aligned with the original intent of the Parties as possible.

11.4  This Agreement including the Schedules hereof constitutes the entire
      agreement between the Parties with respect to the subject matter hereof,
      supersedes any prior expression of intent or understanding relating hereto
      and may only be modified or amended by a written instrument signed by the
      authorized representatives of the Parties.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their legal representatives or authorized representatives on the date first
set forth above.

                                     - 15 -
<PAGE>

                                 SIGNATURE PAGE

BEIJING WANHUI PHARMACEUTICAL GROUP     BEIJING MED-PHARM CORPORATION

By: ILLEGIBLE                               By: XIAOYING GAO
    -----------------------------           -----------------------------

Name:                                   Name:
Title:                                  Title:
Nationality:                            Nationality:

                                     - 16 -
<PAGE>

          CONFIRMATION LETTER OF BEIJING PHARMACEUTICAL GROUP CO., LTD.

As the sole shareholder of Beijing Wanhui Pharmaceutical Group ("WANHUI GROUP")
and the state owned assets administrator as authorized by Beijing State-owned
Asset Administration Commission, with respect to the Share Transfer and Debt
Restructuring Agreement entered into by and between Wanhui Group and Beijing
Med-Pharm Corporation ("BMP") dated December 15, 2004, we confirm as follows:

1.    We fully acknowledge the content of the above Share Transfer and Debt
      Restructuring Agreement, including its Schedules, and hereby approve the
      execution and performance of such Agreement (including its Schedules) by
      Wanhui Group;

2.    Should Wanhui Group be dissolved or merged, or lose the capacity to
      perform the above-mentioned agreement (including its Schedules), we shall
      automatically take the place of Wanhui Group and become a party to the
      aforementioned agreement (including its Schedules) to perform all its
      duties and be responsible for all its obligations therein. Meanwhile, we
      shall enjoy all its rights thereunder.

3.    This confirmation letter shall become effective upon being signed by our
      authorized representative and affixed with our official chop.

                                           BEIJING PHARMACEUTICAL GROUP CO. LTD.
                                           (Seal)

                                           BEIJING PHARMACEUTICAL GROUP CO. LTD.
                                           By:

                                           Date: December 15, 2004

                                     - 17 -
<PAGE>

                                   SCHEDULE 1

                     SUMMARY OF THE ASSET EVALUATION REPORT

                         YUE PING BAO ZI [2004] NO. 035

      This summary highlights selected information contained elsewhere
      in the Asset Evaluation Report. If you want to know all the
      information related to the evaluated project, you should
      carefully read the entire Asset Evaluation Report.
      This summary has the same legal effective as the main body of
      the Asset Evaluation Report.

As entrusted by Beijing Wanwei Pharmaceutical Co. Ltd (hereinafter referred to
as "ENTRUSTING PARTY"), in accordance with regulations related to asset
evaluation and based on the working principles of independence, objectivity and
science, following recognized methods of assets evaluations, Yuehua Certified
Public Accountants Co. Ltd (hereinafter referred to as the "COMPANY") has
conducted evaluation on the assets and liabilities which are entrusted to be
evaluated for the purpose of shares transfer by adopting cost method. The
appraisers of the Company have gone through necessary evaluation formalities,
including making on site visit to check and verify the assets and liabilities,
and conducting necessary market investigations and inquiry, and have reached
fair findings with respect to the market value of the entrusted assets and
liabilities as dated April 30, 2004, the base date of the evaluation. The assets
evaluation results are as following:

As of the Base Date, the book value of the entrusted assets is RMB 76,782,600
yuan, the liabilities are RMB 106,892,700 yuan, and the net asset is minus RMB
30,110,100.00 yuan; after adjustment, the book value of the asset of the Company
is RMB 76,782,600 yuan, the liabilities are RMB 106,892,700 yuan, and the net
asset is minus RMB 30,104,000.00 yuan; Assuming that the Company shall be
operated as an on-going concern and the net assets shall be transacted at fair
market value, the appraisal value of the assets of the Company as of the Base
Date shall be RMB 85,361,800,000.00 yuan, the liabilities are RMB
106,892,700,000.00 yuan, the net asset is minus RMB 21,530,900.00 yuan.

The appraisal results of all types of assets and liabilities are indicated in
the below Consolidated Sheet of the Assets Evaluations Results:

              CONSOLIDATED SHEET OF THE ASSETS EVALUATIONS RESULTS

                                                       Base Date: April 30, 2004

The name of unit occupying the assets: Wanwei Pharmaceutical Co. Ltd

                                - 18 -
<PAGE>

                                                         (RMB, in ten thousands)
<TABLE>
<CAPTION>
                                                           Appraisal    Adjusted   adjustment
                            Book net value  adjustment      Value        Balance      rate%
                            --------------  ----------     ---------    --------   ----------
  Items                          A              B              C          D=C-B     E=D/Bx100
  -----                     --------------  ----------     ---------    --------   ----------
<S>                   <C>   <C>             <C>            <C>          <C>        <C>
Current assets        1        7,229.16       7,229.77      7,982.50      752.73        10.41
Long-term             2          145.00         145.00        272.97      127.97        88.26
investments
Fixed assets          3          185.85         185.85        160.89      -24.96       -13.43
Amid: Buildings       4
      Equipments      5          185.85         185.85        160.89      -24.96       -13.43
      Projects        6
under constructing
Invisible assets      7           22.13          22.13         23.70        1.57         7.09
Amid: Land use        8
   right

Other assets          9           96.12          96.12         96.12
    TOTAL ASSETS      10       7,678.26       7,678.87      8,536.18      857.31        11.16
Current debts         11      10,687.27      10,687.27     10,687.27
Long-term debts       12           2.00           2.00          2.00
    TOTAL DEBTS       13      10,689.27      10,689.27     10,689.27
     NET ASSETS       14      -3,011.01      -3,010.40     -2,153.09      857.31        28.48
</TABLE>

Please refer to the evaluation breakdown for the detailed information of the
appraisal conclusions.

This Report is just provided to the Entrusting Party for the purpose indicated
herein. In accordance with the provisions of the state-owned assets
administrations, the Report shall be effective after the filing with the
state-owned assets administrations authority.

The Report shall be valid for a period of one year as of the base date of April
30, 2004.

The following matters herein should raise special attention to the users of this
Report:

1.    The adjustment and appraisal to the assets and liabilities in the Report
      is made merely for the purpose of reflecting the assets value of entrusted
      assets. The Company does not intent to request the Entrusting Party to
      conduct relevant accounting treatment pursuant to this Report. The
      superior financial and tax competent authority of the Entrusting Party
      shall decide whether and how relevant account treatment shall be
      conducted.

2.    Through the on-site check, the value of 10 of the entrusted assets
      increase. This Report is made pursuant to the inventory check, and does
      not adjust the income tax thereof.

                                     - 19 -
<PAGE>

3.    The Report involves inventories located at places outside of Beijing
      amounting RMB 7,130,400 yuan. Since the appraisers of the Company did not
      make on-site check, the value of such assets is made pursuant to relevant
      financial materials provided by the enterprise, the descriptions and
      undertakings by the asset users, and by reference to the price standard as
      of the Base Date.

4.    The assets and liabilities entrusted by the Entrusting Party have been
      audited by the Company, and an Audit Report numbered as Yue Zong Sheng Zi
      [2004] No. A518 has been issued. The Report is based on such audit of the
      Company.

5.    The revenue for the principal operating of the Entrusting Party and the
      cost thereof interperiodly booked, which may affect the accounts
      receivables. Due to many reasons, we could not decide the amount such
      affected.

6.    As of April 30, 2004, the Wait deal intangible assets loss of the
      Entrusting Party is minus RMB 320,641.75 yuan, which is mainly caused by
      RMB 4,981,308.65 yuan of uncollectible accounts receivables, and RMB
      5,301,950.40 yuan of account payable. The uncollectible accounts
      receivable means those amounts that have been confirmed as uncollectible
      after review. However, RMB 1,394.58 yuan therein has been collected during
      the period from February to April of 2004; the issues of those accounts
      payables relate to those beyond statue limitation or those, upon inquiry,
      is owed to a party which is controlled by the same investor as the
      Entrusted Party, to whom the Entrusted Party also owes accounts payables.
      Due to the uncertainty of the above situations, we maintain the figures of
      such assets as they were. It shall be adjusted after the enterprise
      provides evidences. The amount of the net assets such affected is RMB
      10,283,259.05 yuan.

7.    Other receivables related to Li Wenming is RMB 5,594,271.00 yuan. We could
      not reach reasonable conclusion with respect to the collectivibilty of
      such amount based on the materials provided by the Entrusted Party. Hence,
      we maintain the figure as it is. This event was submitted to the
      Prosecutors' Office of Beijing Xicheng district in 2002, and then
      transferred to the Beijing First Prosecutors' Office. As of the report
      date of the Report, Beijing First Prosecutors' Office has filed lawsuit to
      Beijing Intermediate People's Court. Since this case is still pending, the
      result shall be adjusted in light of the court judgment. The amount of the
      net assets such affected is RMB 5,594,271.00 yuan.

Legal Representative:

Registered Asset Appraiser:

Registered Asset Appraiser:

Beijing Yuehua Certified Public Accountants Co. Ltd.

                                     - 20 -
<PAGE>

Beijing China

June 16, 2004

                                     - 21 -
<PAGE>

                                   SCHEDULE 2

                CONSENT LETTER ON WAIVING OF FIRST REFUSAL RIGHT

To:   BEIJING MED-PHARM CORPORATION

To whom it may concern:

    RE: THE TRANSFER OF 80% SHARES OF BEIJING WANWEI PHARMACEUTICAL CO., LTD.

1.    I, owning 20% shares of the Beijing Wanwei Pharmaceutical Co., Ltd.
      (hereinafter the "COMPANY"), hereby unconditionally:

2.    consent Beijing Med-Pharm Corporation ("BMP")'s acquisition of the 80%
      equity interest (hereinafter the "TRANSFERRED SHARES") in the Company held
      by Wanhui Pharmaceutical Group ("WANHUI GROUP") in accordance with the
      Share Transfer and Debt Restructuring Agreement (hereinafter the "SHARE
      TRANSFER AGREEMENT") entered into between BMP and Wanhui Group. This
      Letter of Consent shall become one appendix to the Share Transfer
      Agreement;

3.    expressly declare to waive the right of first refusal to the Transferred
      Shares;

4.    undertakes to provide all assistances necessary to complete the
      transaction under the Share Transfer Agreement.

This Letter of Consent shall come into effect upon signing.

This Letter of Consent shall be executed in both Chinese and English. Both
versions shall be equally authentic.

By: Wen Xin

Date: December 15, 2004

                                     - 22 -
<PAGE>

                                   SCHEDULE 3A

      LIST OF DEBT OWING TO WANHUI GROUP BY THE COMPANY AS OF THE BASE DATE

1.    The principal of loan owed to Wanhui Group by the Company, totaling RMB
      40,300,000.00 yuan;

2.    The interests of the loan owed to Wanhui Group by the Company, totaling
      RMB 3,760,000.00 yuan;

3.    RMB 6,000,000.00 yuan paid to Tianjin Taipin (Group) Co., Ltd. by Wanhui
      Group on behalf of the Company;

4.    RMB100,000.00 yuan payable to Wanhui Group with respect to cost for
      discipline inspection.

In total: RMB50,160,000.00 yuan

BEIJING WANHUI PHARMACEUTICAL GROUP       BEIJING WANWEI PHARMACEUTICAL CO. LTD.

Authorized Representative:                Authorized Representative:

Date: December 15, 2004                   Date: December 15, 2004

                                     - 23 -
<PAGE>

                                   SCHEDULE 3B

      LIST OF DEBT OWING TO THE COMPANY BY WANHUI GROUP AS OF THE BASE DATE

1.    RMB12,660,000.00 yuan receivable from Beijing Ruizhan Pharmaceutical
      Material;

2.    RMB 150,000.00 yuan receivable from Wanhui Drug Store;

3.    RMB 10,000.00 yuan receivable from Wanhui Group.

In total: RMB 12,820,000.00 yuan

BEIJING WANHUI PHARMACEUTICAL GROUP      BEIJING WANWEI PHARMACEUTICAL CO. LTD.

Authorized Representative:               Authorized Representative:

Date: December 15, 2004                  Date: December 15, 2004

                                     - 24 -
<PAGE>

                                   SCHEDULE 3C

  LIST OF DEBT OWING TO WANHUI GROUP OR ITS AFFILIATES BY THE COMPANY FROM THE
                        BASE DATE TILL THE SIGNING DATE

  RMB 7,000,000.00 yuan loan advanced by Wanhui Group to the Company on July 9,
                                      2004

BEIJING WANHUI PHARMACEUTICAL GROUP      BEIJING WANWEI PHARMACEUTICAL CO. LTD.

Authorized Representative:               Authorized Representative:

Date: December 15, 2004                  Date: December 15, 2004

                                     - 25 -
<PAGE>

                                   SCHEDULE 3D

    ACKNOWLEDGEMENT OF THE DEBT RESTRUCTURING BY WANHUI GROUP AND THE COMPANY

In connection with the Share Transfer and Debt Restructuring Agreement between
Beijing Wanhui Pharmaceutical Group ("WANHUI GROUP") and Beijing Med-Pharm
Corporation dated December 15, 2004 (the "SIGNING DATE"), Wanhui Group and
Beijing Wanwei Pharmaceutical Co. Ltd. ("THE COMPANY") hereby confirm:

1.    As of the base date set forth in the Asset Evaluation Report issued by
      Yuehua Certified Accounting Firm (the "BASE DATE"), except the amount
      incurred during the normal business transactions between both parties, the
      total amount owing to Wanhui Group by the Company (including the principal
      and interests thereon) is RMB 50,160,000 yuan. Both parties have confirmed
      the breakdown thereof as set forth in Schedule 3(A) of the Share Transfer
      and Debt Restructuring Agreement. Wanhui Group confirms that such amount
      has contained all amounts owing to it by the Company as of the Base Date,
      excluding those incurred as a result of the normal business transactions
      with the Company;

2.    As of the Base Date, except the amount incurred during the normal business
      transactions between both parties, the total amount owing to the Company
      by Wanhui Group is RMB12,820,000.00 yuan. There is no interest accrued on
      such amount. Both parties have confirmed the breakdown thereof as set
      forth in Schedule 3(B) of the Share Transfer and Debt Restructuring
      Agreement. The Company confirms that such amount has contained all amounts
      owing to it by Wanhui Group as of the Base Date, excluding those incurred
      as a result of the normal business transactions with Wanhui Group;

3.    From the Base Date to the Signing Date, the principal amount of loan newly
      advanced by Wanhui Group to the Company is RMB7,000,000.00 yuan. Wanhui
      Group confirms that such amount contained all principal amount owing to it
      or any of its Affiliates by the Company from the Base Date to the Signing
      Date, excluding those incurred as a result of the normal business
      transaction;

4.    Both parties confirm that the amount owing by the Company to Wanhui
      provided in above 1 and the amount owing by Wanhui Group to the Company
      provided in above 2 shall be set off on the Signing Date as contemplated
      in the Share Transfer and Debt Restructuring Agreement.

5.    The Company acknowledges the restructuring arrangements with respect to
      the net amount of debt owing to Wanhui Group as contemplated in the Share
      Transfer and Debt Restructuring Agreement, and will take all actions
      necessary for implementation of such restructuring arrangements.

6.    This acknowledgement shall become effective upon being signed by the
      authorized representative of the Parties and affixed with their official
      chops.

                                     - 26 -

<PAGE>

BEIJING WANHUI PHARMACEUTICAL GROUP      BEIJING WANWEI PHARMACEUTICAL CO. LTD.

Authorized Representative:               Authorized Representative:

Date: December 15, 2004                  Date: December 15, 2004

                                     - 27 -

<PAGE>

                                   SCHEDULE 4

                             ENTRUSTED LOAN CONTRACT

Party A: Beijing Med-pharm Market Calculating Co. Ltd. (principal)
Domicile: 2002, Capital Mansion, No. 6 South Xinyuan Road, Chaoyang
          District, Beijing China
Post Code: 10004
Telephone: 84862122
Fax: 84862121
Legal Representative:
Account Bank and Account Number:

Party B: China International Trust and Investment Industrial Bank (entrusted
         party)

Domicile:
Post Code:
Telephone:
Fax:
Legal representative/Person in Charge:
Account Bank and Account Number:

Party C: Beijing Wanwei Pharmaceutical Co. Ltd. (the party using the loan)
Domicile: No. 25, A Dong Hua Shi Bei Li, Chongwen District, Beijing, China
Post Code: 100062
Telephone:
Fax:
Legal representative/Person in charge: Guo Yong
Account Bank and Account Number:

Signature place of the contract: Beijing

Signature date of the contract: December 15, 2004

                                     - 28 -

<PAGE>

In order to utilize its own fund more efficiently, Party A entrusted Party B to
advance a loan to Party C. In accordance with the Contract Law and other
relevant laws and regulations, after the equal consultation, Party A, Party B
and Party C mutually agreed on the following terms:

ARTICLE 1 KIND OF CURRENCY, AMOUNT AND TERM OF THE ENTRUSTED LOAN

Party A entrusts its own fund to Party B to advance a loan to Party C, and shall
recover the principal and obtain the interest within the agreed period. The
currency of the loan under this Contract is RMB; the amount of the loan is seven
million (in words); the term of the loan is nine months starting from _____,
2004 to _______ 2005.

ARTICLE 2 COMMISSION FEES

1.    The rate of commission fees determined by Party B as per the actual amount
      and term of the loan provided shall be 2%.

2.    Method of collecting the commission fees

      Within three days after the effectiveness of this Contract, such fees
      shall be paid by Party C to Party B in a lump sum or be directly deducted
      from the account of Party C in lump sum.

3.    Collection of such commission fees shall not be affected by whether the
      entrusted loan has been repaid or is early repaid.

ARTICLE 3 USAGE OF THE LOAN

1.    Party C will use the principal under this Contract for the repayment of
      the indebtedness due and payable to Beijing Wanhui Pharmaceutical Group
      ("WANHUI GROUP"), but Party B shall not take any responsibility for
      utilization of such loan by Party C.

2.    Without the written consent by Party A, Party C shall not change the usage
      of the loan.

ARTICLE 4 ACCOUNT OF PARTY A

1.    Party A shall open a savings account of the entrusted loan with Party B
      within two days after the signing of this Contract.

2.    Party A shall deposit the full amount of the entrusted loan in the amount
      of RMB seven million yuan into the savings account of the entrusted loan
      in a lump sum within three days after the signing of this Contract.

3.    Under no circumstances shall the amount of each drawdown by Party C exceed
      the balance amount in the account of Party A.

ARTICLE 5 ACCOUNT OF PARTY C

1.    After effectiveness of this Contract but before using the loan, Party C
      shall open the loan account, the RMB settlement account with Party B or
      its branches, in order to handle the formalities for drawdown, repayment
      of the principal, payment of interests and payment of fees, etc.

2.    Party C shall deposit sufficient sum into the account for the payment by
      no less than 5 days before each due date of principle and interest.

                                     - 29 -

<PAGE>

3.    Party B or its branches shall be given the first priority to deal with the
      settlement for transactions between Party C and Wanhui Group or its
      affiliates on the same conditions.

ARTICLE 6 INTEREST RATE OF THE ENTRUSTED LOAN AND METHOD OF INTEREST CALCULATION

1.    The interest rate of the entrusted loan is 5.2 %. If Party A and Party C
      adjust the interest rate or change the method of interest calculation
      during the term of performing the Contract, Party A shall inform Party B
      in writing, and Party B shall calculate the interest in accordance with
      the adjusted interest rate from the second business day after receipt of
      the notice. The agreed interest rate shall not violate the provisions of
      the People's Bank of China.

2.    The method of interest calculation: The interest is computed on the basis
      of the actual amount of drawdown and number of days elapsed from the first
      date of drawdown by Party C. The calculation is based on there are 360
      days per year.

3.    Payment of interests: Party C shall make payment for interest on quarterly
      basis, the interest payment dates being March 21, June 21, September 21
      and December 21 each year. Except otherwise provided herein, if the last
      repayment date of the loan principal does not fall on an interest payment
      date, Party C shall pay off all the interest payable on the last repayment
      date of loan principal. Party B must make payment for interest on each
      interest payment date, or Party B may directly deduct the sum from the
      savings account of Party C. If Party C fails to pay interest in full on
      time and the balance amount of the savings account of Party C is not
      sufficient for payment of the interest due, Party B has the right to
      charge liquidated damages on the unpaid amount of interest falling due at
      the rate of 0.1 % per day on behalf of Party A.

ARTICLE 7 INTEREST OVERDUE

If Party C fails to make repayment in accordance with the repayment schedule or
reach any agreement on extension of the loan, it shall constitute overdue loan.
Party B shall have right to charge the overdue interest on the amount of the
loan overdue in accordance with the interest rates stipulated by the People's
Bank of China on behalf of Party A. If the People's Bank of China changes the
interest rates, such changed rates shall apply.

ARTICLE 8 CONDITIONS PRECEDENT TO DRAWDOWN

Party C can make drawdown only after the following conditions are satisfied in
full:

1.    Party C has opened loan account and relevant settlement account with Party
      B or its branches.

2.    This Contract has become duly effective.

3.    Party C has submitted Party B the name list and specimen signatures of the
      personnel(s) who has the right to execute this Contract and the documents
      and instruments hereunder for and on behalf of itself.

4.    Party B have received the "application for drawing the entrust loan"
      submitted by Party C.

5.    The conditions to drawdown agreed by the parties hereto.

ARTICLE 9 DRAWDOWN PLAN

After effectiveness of this Contract, Party C must apply for using the loan
under this Contract within five working days in lump sum. If Party C needs to
make an early drawdown, it must

                                     - 30 -

<PAGE>

obtain the consent from Party A and Party B.

ARTICLE 10 REPAYMENT AND EARLY REPAYMENT

1.    Party C must repay the principal of the loan under this Contract within
      five working days upon the expiration of this Contract.

2.    Should the Share Transfer and Debt Restructuring Agreement between Beijing
      Med-pharm Corporation and Wanhui Group executed on the same day as this
      Contract (the "SHARE TRANSFER AND DEBT RESTRUCTURING AGREEMENT") be
      approved by the examination and approval authority prior to the expiration
      of this Contract, Party C shall arrange the repayment of the loan
      hereunder promptly upon the receipt of advance payment notice from Party B
      providing Beijing Med-pharm Corporation has become the shareholder of
      Party C and has input the amount of capital increase to Party C.

3.    Should the Share Transfer and Debt Restructuring Agreement be terminated
      for reasons not attributable to Beijing Med-pharm Corporation, the
      principal and interests hereunder shall become due immediately. Party C
      shall repay all the principal, interests and fees within two working days
      upon the receipt of advance payment notice from Party B.

4.    Should the Share Transfer and Debt Restructuring Agreement be terminated
      for reasons attributable to Beijing Med-pharm Corporation, the Contract
      shall be terminated. Party C shall repay the principal hereunder within
      two working days upon the receipt of advance payment notice from Party B.

ARTICLE 11 CERTIFICATE OF INDEBTEDNESS

Party B shall record all the principal, interest, expenses and any other sums
owed by Party C under this Contract in the internal account book of Party B.
This record and the instruments and receipts normally occurred and maintained by
Party B in the course of its handling the drawdown, repayment of principal and
payment of interest by Party C shall be the valid evidence of the credit right
and debt between Party A and Party C.

ARTICLE 12 SECURITY

The security of the principal and interest (including default interest and
relevant expenses) shall be provided separately in the Share Transfer and Debt
Restructuring Agreement.

ARTICLE 13 REPRESENTATIONS AND WARRANTIES OF PARTY A

1.    Party A hereby represents as follows:

      (1)   The loan supplied by Party A belongs to its own lawful funds which
            it may freely disburse.

      (2)   Party A shall have the right to undertake the activities under this
            Contract in the light of the laws, policies and its own rules and
            systems.

      (3)   Party A executes and performs this Contract voluntarily, which
            represent its true intention and have obtained all necessary lawful
            authorizations, and the formalities necessary for execution and
            performance of this Contract by Party A have been completed.

      (4)   The borrower of the entrusted loan under this Contract is designated
            by Party A; the usage, interest rate and term of the loan are all
            confirmed by Party A.

                                     - 31 -

<PAGE>

      (5)   The risks of loan losses under this Contract shall be borne by Party
            A. Party B shall not bear any risks of loan losses.

2.    Party A hereby warrants as follows:

      (1)   It will deposit its own funds into savings account of the entrusted
            loan in accordance with Article 4 of this Contract, and guarantee
            that balance of the account shall be no less than the fund that
            Party C will draw upon under this Contract.

ARTICLE 14 REPRESENTATIONS AND WARRANTIES OF PARTY B

1.    Party B hereby represents as follows:

      (1)   Party B is eligible to execute this Contract and the relevant
            documents, and has the right to perform the rights and obligations
            under this Contract.

      (2)   Execution of this Contract by Party B shall not be deemed as
            providing security for Party C by Party B.

2.    Party B hereby warrants as follows:

      (1)   It will assist Party A in examining Party C's credit and handling
            relevant lending formalities.

      (2)   It will advance the loan as per the provisions of this Contract and
            assist Party A to recover the principal and interest of the loan.

      (3)   It undertakes that it will not increase interest at will or do so in
            a disguised form.

ARTICLE 15 REPRESENTATIONS AND WARRANTIES OF PARTY C

1.    Party C hereby represents as follows:

      (1)   Party C has the civil legal capacity and capacity for civil acts
            required for execution and performance of this Contract, and can
            independently assume the civil responsibilities.

      (2)   Party B executes and performs this Contract voluntarily, which
            represent its true intention and have obtained all necessary lawful
            authorizations. The above-mentioned authorization and execution and
            performance under such authorization does not breach the Articles of
            Association of Party C or any laws and regulations or contract
            binding on Party C. And the formalities necessary for execution and
            performance of this Contract by Party C have been legally and
            validly completed.

      (3)   All documents, information, statements and vouchers provided by
            Party C to Party A and Party B for obtaining the loan under this
            Contract are precise, true, complete and valid.

      (4)   Party C does not hide any event occurred or threatening to occur
            which may make Party A disagree to provide the loan under this
            Contract.

2.    Party C hereby warrants as follows:

                                     - 32 -

<PAGE>

      (1)   It will use the loan in accordance with the purpose provided in this
            Contract, and will not occupy the loan by way of misappropriation or
            inappropriate disbursement.

      (2)   It will repay the principal and pay the interest as well as relevant
            expenses in accordance with the repayment schedule under this
            Contract.

      (3)   It will provide credit certification and/or the most updated
            financial statements as requested by Party B.

      (4)   No matter that Party C has entered into or will enter into any
            counter security agreement or like agreement with the security
            provider regarding the latter's obligations of providing security,
            such agreement shall prejudice any right and interest of Party A
            under this Contract in law or in fact.

      (5)   It shall accept the credit inspection and supervision by Party B,
            and provide sufficient assistance and cooperation.

      (6)   It will not reduce its registered capital by any means; will not
            conduct any material change in ownership or any adjustment of its
            method of business operation without the written consent from Party
            A.

      (7)   It will inform Party A and Party B in a timely manner if it provides
            any credit guarantee or creates any mortgage or pledge over its own
            assets for a third party.

      (8)   The order of priority of the debt repayment by Party C under this
            Contract shall not be lower than that of the debts of same kind
            owing other creditors.

      (9)   Party C undertakes to inform Party A and Party C within 3 days after
            the following events occur:

                  an event of default occurs under this Contract and any loan
                  contract or security contract it entered into with any
                  department or branch of the CITIC Industrial Bank, other banks
                  or non-banking financial institutions or entities;

                  any change in the subordination relationship of Party C or
                  its senior management, amendment to its Articles of
                  Association, or any adjustment of its organizational
                  structure;

                  Party C encounters severe difficulty(ies) in its business
                  operation or its financial situation deteriorates;

                  material dispute on credit right and debt incurred by Party C
                  leading to law suit or arbitration, etc.

3.    The representations and warranties made by Party C in this Article shall
      be continuously valid and shall be deemed as being repeated by Party C
      when this Contract is amended, supplemented or modified.

4.    Party C acknowledges that the execution of this Contract by Party A and
      Party B is based on the confidence in the above-mentioned representations
      and warranties.

ARTICLE 16 EVENT OF BREACH AND LIABILITY OF BREACH

1.    Any of the following events constitutes a default by Party C under this
      Contract:

                                     - 33 -

<PAGE>

      (1)   Party C fails to use the loan in accordance with the usages provided
            in this Contract;

      (2)   Party C fails to pay the commission fee to Party B on time in
            accordance with this Contract;

      (3)   Party C fails to repay the amount of principal or pay the amount of
            interest falling due or other sums payable in accordance with this
            Contract;

      (4)   Party C violates any warranty made in Article 15 or any of its
            representations is untrue.

      (5)   Party C violates any other provisions in respect of its obligation
            under this Contract.

2.    In case of occurrence of the above-mentioned events of default, Party C
      shall notify Party A and Party B in time, and Party B may, upon obtaining
      consent from Party A, take the following actions individually or
      simultaneously:

      (1)   to demand Party C to correct its acts of default within limited
            period of time;

      (2)   to deduct the unpaid commission fee owned by Party C to Party B;

      (3)   to declare immediate maturity of the principal and the interest
            under this Contract in whole, and demand Party C to immediately pay
            off the principal and interest of the loan and the expenses owed;

3.    Party B's events of default and consequence thereof

      (1)   Party B rejects Party C's drawdown in accordance with the provision
            of this Contract without due reason;

      (2)   violation of any provision agreed in Article 14 of this Contract.

4.    In the event of the above-mentioned events of default on the side of Party
      B, Party A or Party C has the right to take the following actions
      individually or simultaneously:

      (1)   to demand Party B to correct its act of default;

      (2)   Party C has the right of early repayment.

5.    Occurrence of the following events shall constitute default by Party A
      under this Contract:

      (1)   failure to deposit or remit the sufficient amount of fund to the
            savings account of the entrusted loan opened with Party B in
            accordance with the provisions of this Contract;

      (2)   the source of the entrusted loan is illegal or not regulatory.

6.    In case of occurrence of the above-mentioned events of default, Party B or
      Party C has the right to take one or more actions as follows:

      (1)   Party B or Party C has the right to demand Party A to correct the
            circumstances mentioned above within limited period of time;

      (2)   Party C has the right to refuse to handle the entrusted loan
            business for Party A;

                                     - 34 -

<PAGE>

      (3)   Party C has the right of early repayment;

      (4)   in case of any losses caused to Party B and Party C, it has the
            right to demand compensation from Party A.

ARTICLE 17 TAXATION

Party B shall withhold Party A's business tax and surcharge in accordance with
law. In case of any adjustment of business tax and surcharge during the term of
this Contract, Party B shall withhold the business tax and surcharge pursuant to
the adjusted tax rate.

ARTICLE 18 EXPENSES

All the expenses (including but not limited to notary expense) in connection
with this Contract shall be borne by Party C, unless otherwise stipulated by law
or agreed in this Contract.

ARTICLE 19 ASSIGNMENT OF DEBT

1.    Party C shall not assign any rights or obligations under this Contract to
      any third person without prior consent in writing by Party A.

2.    Party C may, upon the prior consent in writing by Party A, assign the
      rights and obligations under this Contract to a third person, and the
      third person shall unconditionally observe all terms under this Contract.

ARTICLE 20 PERFORMANCE OF THE OBLIGATIONS AND WAIVER OF RIGHTS

1.    Unless otherwise stipulated in this Contract, obligations of Party C under
      this Contract are independent and shall not be affected by the
      relationship between any party hereto and a third person.

2.    Any tolerance, grace period or favor granted to Party C by Party A or
      deferred exercising of any rights under this Contract by Party A shall not
      affect, prejudice or limit all rights and interests enjoyed by Party A in
      accordance with this Contract, the laws and regulations, and shall not be
      deemed as any waiver of the rights and interests of Party A and Party B
      under this Contract.

ARTICLE 21 DISPUTE, JURISDICTION AND IMMUNITY

1.    The PRC law shall be applicable to the execution, validity, interpretation
      and performance of this Contract and settlement of disputes. During the
      term of this Contract, any dispute or controversy arising out of or in
      connection with the performance of this Contract may be solved by
      consultation between the parties thereto. In case of failure to be solved
      by consultation, the three parties agree to accept the jurisdiction of the
      people's court in the locality of Party B.

2.    All the provisions of this Contract shall be remain valid during the
      course of litigation. Party C shall not refuse to perform its obligations
      under this Contract by using settlement of the dispute as its excuse.

3.    The execution and performance of this Contract by Party C and any
      activities related to this Contract carried out by it shall be civil acts.
      Party C is not and will not be entitled to take any economic or
      administrative measures against Party B or raise objection to or challenge
      any jurisdiction, trial and enforcement by reason that its organizations,
      conducts or assets enjoy any immunity rights.

                                     - 35 -

<PAGE>

ARTICLE 22 NOTICES

1.    Any notices, request for payment and all kinds of communications under
      this Contract shall be delivered to the counterparty in accordance with
      the addresses and fax numbers under this Contract.

2.    In case of any change to the address of any party, it shall promptly
      notify the other two parties.

3.    Any notice, request or other correspondence given to Party A and Party C
      by Party B, including but not limited to those by way of telex, telegraph,
      facsimile or other means, shall be deemed as delivered once it has been
      dispatched; the mail shall be deemed as delivered on the third day from
      the date when the relevant letter has been registered and posted; where
      the correspondence is sent in person, it shall be deemed as having been
      delivered when the recipient signs the return receipt.

ARTICLE 23 CONDITIONS TO THE EFFECTIVENESS OF THE CONTRACT

This Contract shall come into force once the following conditions are satisfied
at the same time and the term of validity shall run until the repayment of
principal and payment of the interest of loan and other related expense
hereunder in full:

1.    this Contract has been signed by the legal representatives or authorized
      representatives of the three parties hereto and chopped with the official
      chops thereof;

2.    the security contract has become effective, if applicable.

ARTICLE 24 MISCELLANEOUS

1.    This Contract may be amended and supplemented as agreed to by the three
      parties in writing; any amendment and supplement hereto shall constitute
      integral part of the Contract and shall have the equal legal effect with
      this Contract.

2.    In case any provisions of the Contract become illegal, invalid or
      unenforceable due to any change in laws, regulations or judicial practice,
      and the legality, validity or enforceability of the remaining provisions
      of this Contract shall not be affected. Where the above occurs, the three
      parties shall cooperate closely to amend the relevant provisions of the
      Contract that have become illegal, invalid or unenforceable as soon as
      possible.

3.    This Contract shall be five originals, each party holding one original,
      Wanhui Group and Beijing Med-pharm Corporation each holding one. All the
      originals shall have equal binding force.

                                     - 36 -

<PAGE>

PARTY A (official chop)                         By Legal Representative
                                                (or Authorized Representative):

PARTY B (official chop)                         By Legal Representative
as the entrusted party                          (or Authorized Representative):

PARTY C (official chop)                         By Legal Representative
                                                (or Authorized Representative):

                                     - 37 -

<PAGE>

                                   SCHEDULE 5

                     PRINCIPAL AND ACCRUED INTERESTS OWED TO
             THIRD PARTY OTHER THAN WANHUI GROUP AND ITS AFFILIATES

The aggregate amount and accrued interest owing by the Company to any third
party other than Wanhui Group and its Affiliates is RMB 4.020,000.00 yuan as of
the Base Date, and RMB 4,097,250.00 yuan as of September 30, 2004.

                                     - 38 -

<PAGE>

                                   SCHEDULE 6

                   LIST OF DOCUMENTS PROVIDED BY WANHUI GROUP

1.    INFORMATION OF THE COMPANY

1.1   Documents evidencing the establishment of Beijing Wanwei Pharmaceutical
      Co. Ltd. (the "COMPANY")

      1.1.1       Promoter agreement entered by and between the Material
                  Supplying Company of Beijing Pharmaceutical General
                  Corporation (in Chinese, (Chinese Characters)) ("MSC") and
                  Beijing Weierkang Pharmaceutical Information Consultation Co.
                  Ltd. (in Chinese, (Chinese Characters)) ("WRK") as of November
                  25, 1998;

      1.1.2       Shareholders' name list of the Company;

      1.1.3       The name list of the Company's board members, manager, and
                  supervisors;

      1.1.4       The approval issued by Beijing Municipal Pharmaceutical
                  Administrative Bureau ("BJPAB") to Beijing Wanhui
                  Pharmaceutical Group ("WANHUI GROUP")[(98) Jing Yiyaoju Shang
                  Guan Zi No. 318] on December 1, 1998, on the incorporation of
                  the Company by MSC and WRK;

      1.1.5       The confirmation letter issued by Beijing Municipal
                  State-owned Assets Administrative Bureau ("BJSOAAB") (Jing
                  Guozigu [1998] No. 631) on December 31,1998, regarding the
                  appraisal result on the assets to be contributed into the
                  Company by MSC;

      1.1.6       The reply issued by Beijing Health Bureau ("BJHB")(Jing Wei
                  Yao Zi [1999] No. 9) on January 11, 1999, regarding its
                  approval with respect to the change of the name by MSC from
                  the Material Supplying Company of Beijing Pharmaceutical
                  General Corporation into Beijing Wanwei Pharmaceutical Co.
                  Ltd.

      1.1.7       The capital verification report issued by Fangyuan Certified
                  Public Accountants dated January 5,1999 with respect to the
                  contribution of both shareholders of the Company, i.e. MSC and
                  WRK;

1.2   Documents evidencing the change of the share structure and existing of the
      Company

      1.2.1       Share transfer agreement entered by and between MSC and Wanhui
                  Group as of August 15, 2000 with respect to the transfer by
                  MSA of all its equity interest in the Company to Wanhui Group;

      1.2.2       Shareholders' meeting resolution dated August 15, 2000, with
                  respect to the share transfer from MSC to Wanhui Group as
                  provided in 1.2.1 above;

      1.2.3       Registration documents filed with the registry authority with
                  respect to the above

                                     - 39 -

<PAGE>

                  shareholder change dated August 21, 2000;

      1.2.4       The amended Articles of Association of the Company evidencing
                  the change of shareholders;

      1.2.5       Amended Shareholders' name list of the Company;

      1.2.6       The registration document filed with the registry authority
                  with respect to the newly-elected board member, Mr. Wang
                  Yuexing, including that of the Shareholders' Meeting, and
                  newly-engaged manager, Mr. Guo Yong;

      1.2.7       The name list of the Company's board members, manager, and
                  supervisors as amended;

      1.2.8       The amended Articles of Association of the Company filed with
                  the registry authority evidencing the increase of director,
                  with the number of directors being six;

      1.2.9       The registration document filed with the registry authority
                  with respect to the newly-elected board member, Mr. Guo Yong;

      1.2.10      The amended Articles of Association of the Company filed with
                  the registry authority evidencing the increase of director,
                  with the number of directors being seven;

      1.2.11      Brief information of the directors of the Company which are
                  registered with registry authority as of February 9, 2003;

      1.2.12      The business license (Registration No. 1101031514657(2-1)) of
                  the Company evidencing that the Company has passed the annual
                  inspection of the year of 2003; and

      1.2.13      Documents with respect to the share transfer from Beijing
                  Weierkang Pharmaceutical Information Consultation Co. Ltd. to
                  Wenxin.

1.3   Governmental approval certification relating to the Company;

      1.3.1       State-tax registration certificate (Jing Guo Shui Zi No.
                  110103700215459) issued on August 25, 1999;

      1.3.2       Local-tax registration certificate (Jing Di Shui Zi No.
                  110103700215459000) issued on August 14, 2002;

      1.3.3       The Medicine Distribution Permit of the Company issued by
                  Beijing Drug Administration Bureau ("BJDA") on October 8, 2002
                  (Jing 100021);

      1.3.4       The Medical Appliances Distribution Permit of the Company
                  issued by BJDA on December 20, 2002;

      1.3.5       The GSP Certificate of the Company issued by State Food & Drug
                  Administration Bureau ("SFDA") (No. A-BJ02-010) on April 3,
                  2003

2.    FINANCING ARRANGEMENT

                                     - 40 -

<PAGE>

2.1   Facility advanced by Wanhui Group

      2.1.1       Facility agreement between the Company and Wanhui Group on the
                  advancing of RMB 800,000.00 yuan working capital dated March
                  8, 2000;

      2.1.2       Facility agreement between the Company and Wanhui Group on the
                  advancing of RMB 9,000,000.00 yuan working capital dated March
                  9, 2000;

      2.1.3       Facility agreement between the Company and Wanhui Group on the
                  advancing of an 11-month facility of RMB 30,000,000.00 yuan
                  dated May 14, 2000;

      2.1.4       Facility agreement between the Company and Wanhui Group on the
                  advancing of a three-month facility of RMB 8,500,000.00 yuan
                  dated August 14, 2000.

      2.1.5       Facility agreement between the Company and Wanhui Group on the
                  advancing of RMB 7,000,000.00 yuan dated July 9, 2004.

      2.1.6       List of all credit and debts between the Company and Wanhui
                  Group or its affiliates (up to April 30, 2004).

2.2   Fund-raising from Employees.

      2.2.1       Four copies of receipts regarding fund raising from employees.

      2.2.2       Copies of confirmation letter given by relevant employees
                  regarding the principal, amount outstanding and the interest
                  up to September 30, 2004.

2.3   Other credits and debts

      List of all other credits and debts between the Company and other third
      party, in addition to above 2.1. and 2,2.

3.    MATERIAL AGREEMENTS

3.1   Real Estate Lease Agreement

      3.1.1       Agreement between Wanhui Group and the Company with respect to
                  the joint-use of the office building and warehouse owned by
                  Wanhui Group. The title certificates of relevant land and
                  buildings.

      3.1.2       the Warehouse sub-lease Agreement between the Company and
                  Shiyao Group Zhongnuo Pharmaceutical (shijiazhuang) Co. Ltd.

3.2   Agreement with important customers

      3.2.1       Master purchase agreement between the Company and Shandong
                  Zhengda Furuida Pharmaceutical Co, Ltd. for the year of 2004;

      3.2.2       The purchase and sale agreement between the Company and
                  Beijing Wanhui

                                     - 41 -

<PAGE>

                  Shuanghe Pharmaceutical Co. Ltd from March 1, 2004 to February
                  28, 2005;

      3.2.3       The purchase and sale agreement between the Company and
                  Beijign Shuanghe Pharmaceutical Co. Ltd. for the year of 2004;

      3.2.4       The exclusive agent agreement between the Company and Beida
                  Pharmaceutical Co. Ltd. for certain products in the area of
                  Beijing for the year of 2004;

      3.2.5       The purchase and sale agreement between Guangzhou
                  Pharmaceutical Co. Ltd. and the Company related to the
                  distribution by the Company of the drugs distributed by
                  Guangzhou Pharm for the year of 2004;

      3.2.6       The commercial agent agreement between Beijing Shuangji
                  Pharmaceutial Co. Ltd. ("SHUANGJI PHARM") and the Company with
                  respect to the exclusive distribution by the Company of
                  certain drugs of Shaugnji Pharm in the area of Beijing in the
                  year of 2004;

      3.2.7       The distribution agreement between the Company and Chengdu
                  Dekun Pharmaceutical Co. Ltd. for the year of 2004;

      3.2.8       The exclusive distribution agreement between the Company and
                  Guizhou Weimen Pharmaceutical Co. Ltd. for the year of 2004;

      3.2.9       The exclusive distribution agreement between the Company and
                  Shandong Shanda Kangnuo Pharmaceutial Co. Ltd. for certain
                  product in the area of Beijing for the year of 2004;

      3.2.10      The sales agreement between the Company and Sichuan Tianqi
                  Pharmaceutical Co. Ltd. for the year of 2004;

      3.2.11      The Purchase and Sale Agreement entered by and between the
                  Company and Beiing Fengkecheng Pharmaceutical Co. Ltd. for the
                  year of 2004;

      3.2.12      The Purchase and Sales Agreement entered by and between the
                  Company and Beijing Kaixing Pharmaceutical and Technology
                  Development Center for the year of 2004;

      3.2.13      The Agency Agreement entered by and between the Company and
                  Shenzhen Ruilin Pharmaceutical Co. Ltd. for the year of 2004.

3.3   Service agreements of the Company

      Software service agreement between the Company and Beijing Chuangtianyuan
      Computer Co. Ltd in 2004 to provide software service, hardware service and
      additional service with

                                     - 42 -

<PAGE>

      the term from May 1st 2004 to April 30th 2005 at the service fee of 8,000
      RMB.

4.    FINANCIAL INFORMATION

4.1   the balance sheet, cash-flow statement and profit and profit distribution
      statement of the fiscal year of 2002 of the Company;

4.2   the balance sheet, cash-flow statement and profit and profit distribution
      statement of the fiscal year of 2003 of the Company;

4.3   the cash-flow statement and profit and profit distribution statement of
      the fiscal quarter of 2004 of the Company;

4.4   audit report for the years of 2001, 2002 and 2003;

4.5   the balance sheet of the Company on the day of the execution date [TO BE
      PROVIDED].

5.    HUMAN RESOURCES

5.1   General description of the human resources of the Company, including the
      total number of employees and number of categories (divisions and
      functions), education background and ages of the employees, and employee
      benefit;

5.2   Instruction on various positions, including that of salesman, senior sales
      representative, junior sales representative, middle-ranking clerk,
      purchasing representative;

5.3   Resumes of key employees;

5.4   Documents related to the dismissal of 47 employees by the Company;

5.5   The commercial insurance agreement with one PRC insurer on the complex
      insurance to employees;

5.6   Samples of current employment contracts and labor service agreement and
      summary of all such documents.

6.    DOCUMENTS RELATED TO THE SUBSIDIARIES OF THE COMPANY

6.1   Business Licenses of the three subsidiaries;

6.2   Articles of Association of the three subsidiaries;

6.3   The latest financial reports of the three subsidiaries.

                                     - 43 -

<PAGE>

                                   SCHEDULE 7

                          OFFICE LEASE AGREEMENT (FORM)

LESSOR:  BEIJING WANHUI PHARMACEUTICAL GROUP (hereinafter referred to as the
         "PARTY A")
             Registered Address: 30 Hetao Yuan, Guandongdian Bei Jie,
                                 Chaoyang District, Beijing
             Legal Representative: Wang Zhao Yi
             Title: General Manager
             Telephone Number: [        ]
             Postcode: [         ]

LESSEE:  BEIJING WANWEI PHARMACEUTICAL CO. LTD (hereinafter referred to as the
         "PARTY B")
           Legal Representative; 25 A, Beilizhongqu, Dong Huashi,
                                 Chongweng District, Beijing
           Legal Representative: [        ]
           Title: [        ]
           Telephone Number: [        ]
           Postcode: [        ]

WHEREAS:

(1)   Party A owns the title to the office referred herein. Such office is being
         occupied and used by Party B pursuant to an agreement ("PREVIOUS
         AGREEMENT") entered by and between Party A and Party B dated October
         20th 1999;

(2)   For the purpose to further regulate the relationship between Party A and
         Party B, both Parties desire to replace the Previous Agreement with
         this Agreement.

Upon the amicable negotiation between Party A and Party B, the following
provisions have been agreed to regarding the lease of the office, located at 25
A Building, Beilizhongqu, Dong Huashi, Chongweng District, Beijing, own by Party
A (hereinafter referred to as the "OFFICE") to Party B:

ARTICLE 1.     Party A shall lease Party B the properties located at 25 A
               Building, Beilizhongqu, Dong Huashi, Chongweng District, Beijing
               for the purpose of conducting its business. The occupied area of
               the Office is 399 square meters and the floor area is 1,037
               square meters (among which 778 square meters over ground and 259
               square meters under ground).

1.1   The drawing and detailed map of the Office shall be attached hereto and
      constitute integral part to this Agreement.

1.2   Party B warrants that it shall use the Office only for conducting its
      business and without the prior written consent from Party A, Party B shall
      not change the usage of the Office nor sub-lease the Office to any third
      party.

                                     - 44 -

<PAGE>

ARTICLE 2. TERM OF THE LEASE

2.1   Party A and Party B agree that the term of the lease is three years,
      commencing from January 1, 2005 , ending on December 31, 2007.

2.2   Party A shall continue to lease the Office to Party B from the execution
      date of this Agreement in accordance with the terms and conditions of this
      Agreement. Party A and Party B acknowledge hereby that Party A has
      performed its obligation under this Article 2.2.

2.3   After the expiration of the term of the lease as provided in the above
      Article 2.1, if Party B has not breached any provisions herein during the
      lease term, in case Party A still desires to lease the Office, Party B
      shall has the pre-emptive right to rent it.

2.4   Party A and Party B acknowledge hereby that after the expiration of the
      term of the lease provided hereunder, all of the decoration and the
      equipments and facilities as invested, added and replaced by Party B upon
      the fact that the Office shall belong to Party A free from extra charge.

2.5   Party B shall empty the Office and return it to Party A 10 days following
      the expiration of the term of the lease provided herein. In case Party B
      delays to return the Office, Party B shall pay Party A for the delay
      period the rental calculated on the daily basis with the same price and
      method provided herein. In case Party B delays to return the Office over
      60 days, Party A shall have the right to expropriate all the deposit paid
      by Party B for renting the Office.

2.6   In case Party B desires to continue to rent the Office after the
      expiration of the term of the lease provided under Article 2.1, it shall
      inform Party A in writing 30 days prior to the expiration of the term of
      the lease. Having obtained the written consent from Party A, both Parties
      may enter into a separate agreement on the renewal.

ARTICLE 3. RENTAL AND RENTAL PAYMENT, TAXATION AND THE TAX PAYMENT

3.1   Party A and Party B agree that within ten days following the execution
      date of this Agreement, Party B shall pay Party A the deposit equal to
      three-month rental at the sum of RMB141,660.00. Should there is no breach
      of this Agreement by Party B during the lease term, Party B shall empty
      the Office and return it to Party A upon the expiration of the term of the
      lease in accordance with the terms and conditions in this Agreement. Where
      Party B furnishes Party A at the same time with the evidence as its full
      payment of all kinds of expense in relation to using of the Office
      (including water, power, heating, property management and whatsoever at
      Party B's expense), Party A shall refund the deposit to Party B within ten
      days free from any extra charge. Should Party B breaches any

                                     - 45 -

<PAGE>

      of the provisions herein during the lease term, Party A shall have the
      right to retain the deposit upon the expiration of this Agreement.

3.2   Party A and Party B agree that within the term of the lease, the rental of
      the Office shall be RMB 2.00 per square meter (for the floor area) per day
      for the over-ground part and RMB 1.00 per square meter (for the floor
      area) per day for the under-ground part. The monthly rentals shall be
      calculated and paid by Party B on the basis of 30 days. According to this
      method, Party B shall pay the rental to Party A at the amount of RMB 54450
      per month, and accumulatively RMB 1,969,920.00 throughout of the term of
      the lease.

3.3   Party B warrants that except as otherwise provided in this Agreement,
      within the term of the lease, Party B shall bear all the expenses of
      water, power, property management, gas, telephone and heating arising from
      its using of the Office. Party B shall pay the expenses of water, power,
      gas and telephone on the monthly basis, based on the respective volumes it
      actually used in the previous month and at the rates provided by the
      Beijing Municipal Government regarding the industrial using of water,
      power, gas and telephone.

3.4   Party A and Party B shall bear all kinds of levies and taxes respectively
      in respect of the property lease in accordance with the relevant
      regulations promulgated by the Beijing Municipality.

3.5   Party A and Party B agree that from the execution date of this Agreement,
      Party B shall, within the first 7 days of the first month of each quarter,
      pay the rentals of that quarter to Party A at the amount of RMB 164160 in
      a lump.

ARTICLE 4. MAINTENANCE AND DECORATION OF THE OFFICE DURING THE LEASE TERM

4.1   During the term of the lease, Party B can at its own discretion decorate
      the Office, or install any equipments or facilities as necessary for
      conducting its business. Party B shall notify Party A in writing before
      the construction and furnish the decoration schedule and the construction
      drawing for Party A's record. Only having obtained the prior written
      consent from Party A, Party B shall apply with the relevant authorities to
      complete all the related formalities to the construction.

4.2   During the term of the lease, Party B shall be responsible for the repair
      of the Office during the lease term at its own cost.

ARTICLE 5. CHANGE AND TERMINATION OF THE LEASE TERM

5.1   During the term of the lease, except as otherwise agreed in this
      Agreement, neither Party A nor Party B shall terminate this Agreement
      unilaterally.

5.2   Except as otherwise agreed in this Agreement, in case Party B fails to pay
      the rental as provided in Article 3, Party A shall have the right to
      deduct the equal amount from the deposit paid by Party B. In case Party B
      fails to pay the rental over 30 days after the

                                     - 46 -

<PAGE>

      deposit is deducted to zero, Party A shall have the right to terminate
      this Agreement and take the Office back.

5.3   During the term of the lease, if Party A intends to sell the Office, Party
      B shall have the pre-emptive right to purchase the Office under the equal
      conditions.

ARTICLE 6. RIGHTS AND OBLIGATIONS OF PARTY A:

6.1   Party A undertakes to make the Office available to Party B at the date as
      provided in this Agreement.

6.2   Party A warrants that during the term of the lease, it shall not to
      interrupt the use of the Office by Party B.

6.3   Except as otherwise agreed in this Agreement, during the term of Party B's
      using of the Office, Party A shall not withdraw Party B's use right of the
      Office nor request Party B to share the Office with any third party,
      otherwise Party A shall compensate Party B for all the loss it suffered as
      a result.

6.4   I Party A warrants that it possesses the integrity ownership upon the
      Office.

ARTICLE 7. RIGHTS AND OBLIGATIONS OF PARTY B

7.1.1 After the expiration of the term of the lease provided herein, this Office
      shall be returned to Party A on time without detriment to any equipment
      and/or facility of this Office.

7.2   Party B shall, on time, pay the rental, and all the expenses of water,
      electricity, gas, telephone, heating, etc. in respect of this Office.

7.3   During the term of the lease, Party B shall guarantee that it will use
      this Office safely and take good care of the facilities of this Office.

7.4   During the term of the lease, Party B shall assume the liabilities and
      debts occurred during the usage of this Office.

7.5   During the term of the lease, Party B shall, without the prior written
      consent from Party A, have no right to sub-lease, and/or lend, and/or
      transfer this Office to any third party for use, nor use the Office for
      any other purposes.

7.6   During the term of the lease, Party B has no right to create any mortgage,
      pledge, lien or other third party's right in any form on the office.

                                     - 47 -

<PAGE>

7.7   Party B shall strictly comply with the provisions specified in the
      relevant laws, regulations and local regulations in Beijing and various
      stipulations provided by Party A. In case of the breach of the above
      provisions, it shall compensate Party A all losses arising therefrom.

7.8   Party B shall, without the prior written consent by Party A, not affix,
      hang logos and advisement on the outside wall, door and window, and public
      area. In case of the breach of this obligation, Party A shall have the
      right to remove the hangings and advisement. Thus, all the expenses for it
      shall be assumed by Party B on its own.

7.9   Party B shall not contact with third party in the name of Party A.

7.10  Party B shall be liable to all matters in detriment to the Office during
      the term of the lease.

ARTICLE 8.    In case that any force majeure events cause the Agreement to be
              delayed in performance in part or in full, the parties shall not
              liable to this delay. However, the party sufferring this force
              majeure shall inform in writing the other party of this event
              within 24 hours from the moment when such force majeure occurrs,
              and provide the other party the relevant evidence documents issued
              by the competent authority within 7 days from the date the event
              happened. If the performance of this Agreement is delayed more
              than 90 days due to such force majeure events, the parties shall
              otherwise consult about the performance of this Agreement.

ARTICLE 9.    The parties agree that they shall keep secret for the business
              and technology secrecy acquired from performing this Agreement or
              obtained pursuant to its current knowledge and experience, and for
              all relevant matters concerning this Agreement and its schedule
              (hereinafter collectively referred to as the "Business Secrets").
              Without the prior written consent from other party, any party
              shall not disclose the Business Secrets to any third party, and /
              or take any method to use the Business Secrecy to conduct
              competitive business with other party, and / or use the Business
              Secrets to achieve profits for its own or third party. The
              stipulation specified herein shall continue to be effective after
              the termination of this Agreement.

ARTICLE 10.   Any notice and /or other written documents during performing
              the Agreement shall be sent to the following addresses by hand,
              and / or by fax, and / or by express:

Party A: Beijing Wanhui Pharmaceutical Group

Registered Address:
Post Code:
Telephone Number:
Facsimile Number:

                                     - 48 -

<PAGE>

Person for contact:

Party B: Beijing Wanwei Pharmaceutical Co. Ltd.

Registered Address:
Post Code:
Telephone Number:
Facsimile Number:
Person for contact:

In the case of any notice and / or written documents sent by hand, the date of
service is the next day when they are delivered to the above addresses. In the
case of any notice and / or written documents sent by fax, the date of service
is the date when they are faxed out. In the case of any notice and / or written
documents sent by express, the date of service is the fifth day from the next
date when the express is sent out.

In case of any changes on the matters concerning the above contact method of any
one party during performing this Agreement, the party shall notify the other
party within 3 days from the date such changes occurred. If the other party is
not notified overdue, it shall, in terms of this article, be deemed to have sent
to the party by sending the notice and / or written documents to the above
address.

ARTICLE 11.   Where any one party or two parties did not perform, or not
              properly perform, or not perform according to the terms and
              conditions of this Agreement the any obligations or
              responsibilities, including action or omission, such actions shall
              be constituted the breach. Accordingly, the non-default party
              shall have the right to require the default party to pay
              liquidated damages to it by the following methods. If the
              liquidated damages paid by the default party fails to make up the
              losses suffered by non-default party, the non-default party shall
              have the right to continue to request the default party to
              indemnify the potion of loss beyond the liquidated damages
              suffered by it.

11.1  Should Party B fail to pay the rent beyond 10 days in accordance with this
      Article 3, Party A shall have the right to deduct the relevant amount from
      the deposit paid by Party B and keep the remaining as liquidated damages.
      Even after the expiration of this Agreement, Party A has the right to
      refuse to return any of such deposit.

11.2  If Party A fails to deliver Party B the Office to use in accordance with
      the terms and conditions of this Agreement, it shall be reliable to pay
      the liquidated damages at the rate of at the rate of 0.21% of the total
      rent of that month overdue on daily basis.

11.3  In case of termination of this Agreement by Party B during the term of the
      lease, Party A shall not refund the rentals that have been paid by Party
      B. Meanwhile, Party A shall have the right to expropriate all the deposits
      paid by Party B.

                                     - 49 -

<PAGE>

ARTICLE 12.   The parties agree that the Agreement signed on October 20,
              1999 by and between Party A and Party B shall be immediately
              terminated from the date this Agreement comes to effect.

ARTICLE 13.   The parties agree that any amendment and termination of this
              Agreement shall be made by both parties with their consents after
              consultation. Any one party shall have no right to modify or
              terminate this Agreement unilaterally or by entering into any
              contract or other documents with other parties, unless set forth
              otherwise in this Agreement.

ARTICLE 14.   Any disputes arising from this Agreement shall be resolved
              through the amicable consultation between both Parties. If the
              consultation fails, each party has the right to refer the dispute
              to the competent people's court where the Office is located.
              During the process of such actions, the parties shall continue to
              perform the provisions of this Agreement other than those under
              disputes and actions.

ARTICLE 15.   The attachments hereto shall be the integral parts of this
              Agreement and have the same legal effect and force.

ARTICLE 16.   This Agreement shall become effective upon it is signed by the
              authorized representative of both Parties.

ARTICLE 17.   Any matters not provided by this Agreement shall be resolved
              separately by both Parties through mutual consultation and
              supplementary agreements. Such supplementary agreements shall be
              the integral parts of this Agreement and have the same legal
              effect and force. Such supplementary agreements shall prevail in
              the case of any not inconformity with this Agreement.

ARTICLE 18.   This Agreement shall be in two originals. Each party shall hold
              one with the same legal force.

THE LANDLORD: BEIJING WANHUI PHARMACEUTICAL GROUP

Authorized representative

Date of signature

THE TENANT: BEIJING WANWEI PHARMACEUTICAL CO. LTD

Authorized representative:

Date of signature

                                     - 50 -

<PAGE>

                                   SCHEDULE 8

                        WAREHOUSE LEASE AGREEMENT (FORM)

LANDLORD:  BEIJING WANHUI PHARMACEUTICAL GROUP (hereinafter referred to as
           "PARTY A")
               Domicile: No. 129, West Xuanwumen Road, Xicheng District, Beijing
               Legal Representative: Wang Zhaoyi
               Title: General Manager
               Telephone Number: [        ]
               Postcode: [        ]

TENANT:    BEIJING WANWEI PHARMACEUTICAL CO. LTD (hereinafter referred to as
           "PARTY B")
               Domicile: 3/F, 25 A, Beilizhongqu, Donghuashi, Chongwen District,
                         Beijing
               Legal Representative: Guo Yong
               Title: Chairman
               Telephone Number: [        ]
               Postcode: 100062

WHEREAS:

(1)   Party A owns the title to the warehouse referred herein. Such warehouse is
      being occupied and used by Party B pursuant to an agreement ("PREVIOUS
      AGREEMENT") entered by and between Party A and Party B dated October 20th
      1999;

(2)   For the purpose to further regulate the relationship between Party A and
      Party B, both Parties desire to replace the Previous Agreement with this
      Agreement.

Upon the amicable negotiation between Party A and Party B, the following
provisions have been agreed to regarding the lease of the warehouse, located at
Xidian Village, Majuqiao Town, Tongzhou District, Beijing, owned by Party A
(hereinafter referred to as the "WAREHOUSE") to Party B:

ARTICLE 1.

Party A shall lease to Party B the properties located at Xidian Village,
Majuqiao Town, Tongzhou District, Beijing for the purpose of warehousing. The
occupied land area of the Warehouse is 18,126 square meters and the floor area
is 7,015 square meters.

1.1   the layout and detailed location map of the Warehouse shall be attached
      hereto and constitute integral part of this Agreement.

                                     - 51 -

<PAGE>

1.2   Party B warrants that it shall use the Warehouse only for warehousing and
      without the prior written consent from Party A, Party B shall not change
      the usage of the Warehouse nor sub-lease the Warehouse to any third party.

ARTICLE 2. TERM OF THE LEASE

2.1   Party A and Party B agree that the term of the lease is three (3) years,
      commencing from January 1, 2005, ending on December 31, 2007.

2.2   Party A shall tender the Warehouse to the use of Party B from the
      execution date of this Agreement in accordance with the terms and
      conditions of this Agreement. Party A and Party B hereby acknowledge that
      Party A has performed its obligation under this Article 2.2.

2.3   After the expiration of the term of the lease as provided in the above
      Article 2.1, in case Party A still desires to lease the Warehouse and
      there has been no default of any kind on the part of Party B during the
      term of the lease, Party B shall has the pre-emptive right to rent it on
      the same conditions.

2.4   Party A and Party B hereby acknowledge that after the expiration of the
      term of the lease provided hereunder, all of the decoration and the fixed
      equipments and facilities as invested, added and replaced by Party B
      during the term of the lease shall belong to Party A free of extra charge.

2.5   Party B shall empty the Warehouse and return it to Party A within 10
      working days following the expiration of the term of the lease provided
      herein. In case Party B delays in returning the Warehouse, Party B shall
      pay Party A for the delay period the rental calculated on the daily basis
      at the same the rate and in the same method provided herein. In case Party
      B delays in returning the Warehouse over 60 days, Party A shall have the
      right to expropriate all the deposit paid by Party B for renting the
      Warehouse.

2.6   In case Party B desires to continue renting the Warehouse after the
      expiration of the term of the lease provided under Article 2.1, it shall
      inform Party A in writing 30 days prior to the expiration of the term of
      the lease. Having obtained the written consent from Party A, both Parties
      may enter into a separate agreement on the renewal.

ARTICLE 3. RENTAL AND RENTAL PAYMENT, TAXATION AND THE TAX PAYMENT

3.1   Party A and Party B agree that within ten days following the execution
      date of this Agreement, Party B shall pay Party A the deposit equal to
      three-month rental in the sum of RMB170,464.5. Should there is no breach
      of this Agreement by Party B during the lease term, Party A shall return
      such deposit to Party B without paying any interests thereon within 10
      days upon the expiration of the term of the lease. Should Party B breaches
      any of

                                     - 52 -

<PAGE>

      the provisions herein during the lease term, Party A shall have the right
      to retain the deposit upon the expiration of this Agreement.

3.2   Party A and Party B agree that within the term of the lease, the rental of
      the Warehouse shall be RMB 0.27 per square meters (for the floor area) per
      day for the Warehouse. The monthly rentals shall be calculated and paid by
      Party B on the basis of 30 days. According to this method of calculation,
      Party B shall pay the rental to Party A in the amount of RMB 56,821.5 yuan
      per month, and in aggregate RMB 2,045,574 throughout of the term of the
      lease.

3.3   Party B warrants that except as otherwise provided in this Agreement,
      within the term of the lease, Party B shall bear all the expenses of
      water, power, property management, gas, telephone and heating arising from
      its using of the Warehouse. At the same time when Party B empties the
      Warehouse, it shall provide Party A with the evidence that there are no
      outstanding expenses payable.

3.4   Party A and Party B shall bear all kinds of levies and taxes respectively
      in respect of the property lease in accordance with the relevant
      regulations promulgated by the Beijing Municipality.

3.5   Party A and Party B agree that from the execution date of this Agreement,
      within the first 7 days of the first month of each quarter, Party B shall
      pay the rentals of that quarter to Party A in the amount of RMB 170,464.5
      in a lump sum.

ARTICLE 4. MAINTENANCE AND DECORATION OF THE WAREHOUSE DURING THE LEASE TERM

4.1   During the term of the lease, Party B may in its own discretion decorate
      the Warehouse, or install any equipments or facilities as necessary for
      conducting its business. Party B shall notify Party A in writing before
      the construction work and furnish the decoration schedule and the
      decoration and construction drawing for Party A's record. Only after
      having obtained the prior written consent from Party A, Party B shall
      apply with the relevant authorities to complete all the related
      formalities for the construction.

4.2   During the term of the lease, Party B shall be responsible for the repair
      of the Warehouse during the lease term at its own cost.

ARTICLE 5. CHANGE AND TERMINATION OF THE LEASE TERM

5.1   During the term of the lease, except as otherwise agreed in this
      Agreement, neither Party A nor Party B shall terminate this Agreement
      unilaterally.

5.2   Except as otherwise agreed in this Agreement, in case Party B fails to pay
      the rental as provided in Article 3, Party A shall have the right to
      deduct the equal amount from the deposit paid by Party B. In case Party B
      fails to pay the rental over 30 days after the

                                     - 53 -

<PAGE>

      deposit is deducted to zero, Party A shall have the right to terminate
      this Agreement and take the Warehouse back.

5.3   During the term of the lease, if Party A intends to sell the Warehouse,
      Party B shall have the pre-emptive right to purchase the Warehouse under
      the equal conditions. The purchase price shall be determined on the basis
      of the evaluation by an evaluation institution with required qualification
      recognized and appointed by the parties.

ARTICLE 6. RIGHTS AND OBLIGATIONS OF PARTY A

6.1   Party A undertakes to make the Warehouse available to Party B on the date
      as provided in this Agreement.

6.2   Party A warrants that during the term of the lease, it shall not interrupt
      the use of the Warehouse by Party B in compliance with the laws and this
      agreement.

6.3   Except as otherwise agreed in this Agreement, during the term of Party B's
      using of the Warehouse, Party A shall not withdraw Party B's right to use
      the Warehouse nor request Party B to share the Warehouse with any third
      party, otherwise Party A shall compensate Party B for all the loss it
      suffered therefrom.

6.4   If due to the fact the parcel of land where the Warehouse is located is
      allocated by the State and therefore Party A may have to pay any fees in
      respect of the lease, Party A warrants that it will pay such fees and the
      payment thereof will not prejudice the provisions of this Agreement.

6.5   If this Agreement can not be performed or fully implemented due to the
      reasons attributable to Party A, Party A shall procure for Party B a site
      with same conditions as the Warehouse (i.e. with GSP Qualification
      Certificate) and enable Party B to lease such site with the same or more
      favorable terms and conditions. If Party A fails to procure such
      replacement site, it shall bear all the expenses incurred by Party B in
      order to obtain such replacement site.

ARTICLE 7. RIGHTS AND OBLIGATIONS OF PARTY B

7.1   After the expiration of the term of the lease provided herein, this
      Warehouse shall be returned to Party A on time without detriment to any
      equipment and/or facility of this Warehouse.

7.2   Party B shall pay the rentals and all the expenses of water, electricity,
      gas, telephone, heating, etc. in respect of this Warehouse on time,.

7.3   During the term of the lease, Party B shall guarantee that it will use
      this Warehouse safely and take good care of the facilities of this
      Warehouse.

                                     - 54 -

<PAGE>

7.4   During the term of the lease, Party B shall assume the liabilities and
      debts occurred during the usage of this warehouse.

7.5   During the term of the lease, Party B shall, without the prior written
      consent from Party A, have no right to sub-lease, and/or lend, and/or
      transfer this Warehouse to any third party for use, nor use the Warehouse
      for any other purposes.

7.6   During the term of the lease, Party B shall have no right to create any
      mortgage, pledge, lien or other third party right in any form on the
      Warehouse.

7.7   Party B shall strictly comply with the provisions specified in the
      relevant laws, regulations and local regulations of Beijing and various
      stipulations provided by Party A. In case of the breach of the above
      provisions, it shall compensate Party A all losses arising therefrom.

7.8   Party B shall not contact with third party in the name of Party A.

7.9   Party B shall take good care of the items stored in the Warehouse, and it
      shall not store any items flammable, explosive, erosive or with special
      smell and any illegal items such as guns, ammunitions and drugs,
      otherwise, any economic and legal responsibilities arising therefrom shall
      be assumed by Party B solely.

7.10  Party B shall not affix or hang logos or advisements on the outside walls,
      doors and windows or any public area of the Warehouse without the prior
      written consent by Party A. In case of the breach of this obligation,
      Party A shall have right to remove such hanging items and advisements, all
      the expenses incurred therefor shall be assumed by Party B on its own..

ARTICLE 8.

In case that any force majeure events cause delay in performance of the
Agreement in part or in full, the parties shall not be liable to such delay.
However, the party suffering this force majeure shall inform in writing the
other party of this event within 24 hours from the moment when such force
majeure occurrs, and provide the other party with the relevant evidence
documents issued by the competent authority within 7 days from the date the
event happened. If the performance of this Agreement is delayed for more than 90
days due to such force majeure events, the parties shall otherwise consult with
each other on the performance of this Agreement.

ARTICLE 9.

The parties agree that they shall keep secret the business and technology
secrecy acquired from performing this Agreement or deduced pursuant to its
current knowledge and experience, and for all relevant matters concerning this
Agreement and its schedule (hereinafter collectively referred to as the
"BUSINESS SECRETS"). Without the prior written consent from other party, any
party shall not

                                     - 55 -

<PAGE>

disclose the Business Secrets to any third party, and/or use the
Business Secrecy by any means in business activities competitive with the other
party, and/or use the Business Secrets to gain profits for its own or third
party. The stipulation specified herein shall continue to be effective after the
termination of this Agreement.

ARTICLE 10.

Any notice and/or other written documents during performing the Agreement shall
be sent to the following addresses by hand, and / or by fax, and / or by express
mail:

Party A:  Beijing Wanhui Pharmaceutical Group

          Address: No. 129, West Xuanwumen Road, Xicheng District, Beijing
          Post Code:
          Telephone Number:
          Facsimile Number:
          Attention:

Party B:  Beijing Wanwei Pharmaceutical Co. Ltd.

          Domicile: 3/F, 25 A, Beilizhongqu, Donghuashi, Chongwen District,
                    Beijing
          Post Code: 100062
          Telephone Number:
          Facsimile Number:
          Attention:

In the case of any notice and/or written documents sent by hand, the date of
service is the next day when they are delivered to the above addresses. In the
case of any notice and/or written documents sent by fax, the date of service is
the date when they are faxed out. In the case of any notice and/or written
documents sent by express mail, the date of service is the fifth day from the
next date when the express mail is dispatched.

In case of any changes on the matters concerning the above contact method of any
party during performing this Agreement, the party shall notify the other party
within 3 days from the date such changes occurred. If the other party is not
notified in time, the notice and/ or documents sent by such party to the
above-mentioned addressee in accordance with this Article shall be deemed being
served to the party whose address changes.

ARTICLE 11.

Any failure by any party or two parties to perform, or properly perform, or
perform according to the terms and conditions of this Agreement any obligations
or responsibilities hereof, including action or omission, shall constitute a
default under this Agreement. Accordingly, the non-default party shall have the
right to request the default party to pay liquidated damages to it by the
following methods. If

                                     - 56 -

<PAGE>

the liquidated damages paid by the default party fails to make up the losses
suffered by non-default party, the non-default party shall have the right to
continue to request the default party to indemnify the potion of loss beyond the
liquidated damages suffered by it. The losses as mentioned above shall include,
without limitation to, arbitration costs, attorney's fees, penalty, verification
fees, fees for traveling and communication paid by the non-default party in
connection with its request for default party's ceasing default acts and payment
of the relevant liquidated damages, and/or any liquidated damages, compensation,
penalty, verification fees, fees for traveling and communication paid by the
non-default party to a third patty due to the default by the default party,
together with such costs and fees for litigation or arbitration or attorney's
fees so causes.

11.1  Should Party B fail to pay the rent beyond 10 days in accordance with this
      Article 3, Party A shall have the right to deduct the relevant amount from
      the deposit paid by Party B and keep the remaining as liquidated damages.
      Even after the expiration of this Agreement, Party A has the right to
      detain any of such deposit

11.2  In case of termination of this Agreement by Party B during the term of the
      lease, Party A shall not refund the rentals that have been paid by Party
      B. Meanwhile, Party A shall have the right to expropriate all the deposits
      paid by Party B.

ARTICLE 12.

The parties agree that the Agreement signed on October 20, 1999 by and between
Party A and Party B shall be immediately terminated from the date when this
Agreement comes to effect.

ARTICLE 13.

The parties agree that any amendment to and termination of this Agreement shall
be made by both parties after reaching agreement thereon. Neither party shall
have right to modify this Agreement on its own or by entering into any contract
or other documents with third parties, or terminate this Agreement unilaterally,
unless otherwise agreed in this Agreement.

ARTICLE 14.

Any disputes arising from this Agreement shall be resolved through the amicable
consultation between both Parties. If the consultation fails, each party has the
right to refer the dispute to the competent people's court where the Warehouse
is located. During the process of such actions, the parties shall continue to
perform the provisions of this Agreement other than those under disputes and
actions.

ARTICLE 15.

The attachments hereto shall be the integral parts of this Agreement and have
the same legal effect and force.

                                     - 57 -

<PAGE>

ARTICLE 16.

This Agreement shall become effective upon it is signed by the authorized
representative of both Parties.

ARTICLE 17.

Any matters not provided by this Agreement shall be resolved separately by both
Parties through mutual consultation and supplementary agreements. Such
supplementary agreements shall be integral parts of this Agreement and have the
same legal effect and force. Such supplementary agreements shall prevail in the
case of any inconformity with this Agreement.

ARTICLE 18.

This Agreement shall be signed in two originals. Each party shall hold one
original, which shall have the same legal force.

THE LANDLORD:
BEIJING WANHUI PHARMACEUTICAL GROUP

Authorized representative:

Date of signature:

THE TENANT:

BEIJING WANWEI PHARMACEUTICAL CO. LTD

Authorized representative:

Date of signature:

                                     - 58 -

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