Document:

United States Securities and Exchange Commission Edgar Filing

Exhibit 10.20

Drug Procurement Contract

Contract No.

Demanding Party:Xi’an Qinba Pharmaceuticals Co., Ltd.(demand party)

Supplying Party:Xi’an Tianyi Biotechnology Co., Ltd.(supply party)

Date of Excecution:December 26, 2007

The parties communicated and engage into this contract about the listed drugs in the appendix based on the principle of cooperation and equality.

 

I. supplying method:

1.demand party send orders to supply in form of order notification, supply party shall supply such drugs as the orders required. 

2.supply party send confirmation letter back to demand party after received the orders,if encounter any difficulties, supply party should let demand party know immediately or will be seemed as default. 

3.demand party has the right to adjust the quality standard and amount in accordance with drug quality and amount that supply party have supplied, supply party has the obligation to cooperate with it. 

4.to ensure the drug amount, supply party shall provide 1-3% consumable supplies for free and other patch up materials. 

II. quality requirement of drug:

1.supply party supply drugs that demand party notified and shall not change and standard of the drug or manufacturing place without demand party’s confirmation. 

2.supply party shall strictly obey the standards required by demand party, if any changes, the parties shall communicate to settle. 

3.supply party guarantee that all drugs supplied have met the state relevant standards and standards of the industry. 

III. quality assurance:

1.supply party shall guarantee that all drugs provided are met with the requirements of demand party, if any changes of ore materials, supply party shall have demand party’s confirmation. 

2.supply party shall setup effective quality control system to satisfy demand party’s requirement,demand party has the right to check and supervise.

3.supply party shall examine by itself before supply,items to be examined 

should not be less than standards and regulations made by demand party, attached with written record. 

4.if demand party made any suggestions or quality requirement,supply party has to settle,if not,demand party has the right to terminate to cooperate with supply party.

IV. package requirement:

supply party has to pack drugs as demand party’s requirement,and make notes of permission no., drug name, material, type, specification, color, amount, suitable vehicles, long trip delivery, damp proof, shock proof, dust proof info on the package.

V. delivery place and transportation, terminal fee:

1.delivery place:demand party appointed place

2. transportation, terminal fee:supply party pay 

VI. price and payment:

1.the parties shall continue to improve and lower costs and price through higher effectiveness and quality to benefit customers, endeavour to maintain the tendency and analyze the price once a year. 

2.supply party’s offer price contain mould, after demand party’s purchase of certain amount the price should be lowered automatically.

3.the parties agree that obey the approved price under conditions regulated within the contract. 

4.payment term:within 60 days after demand party’s received drugs,account days will be after supply party had delivered the drugs and since demand party’s receiving the invoice provided by supply party(invoice date would be the signed date)。

VII. delivery and acceptance:

1.supply party has to deliver the drugs as demand party’s requirement to certain places appointed by demand party in time, attaching a delivery list and self examine report or certificate(provide report from the 3rd party if needed)to let demand party check. The delivery list shall have written order no. and drug material info (production no., drug name, material, specification, color, 

amount and so on).

2.demand party shall check the drugs by standards engaged and make judgment that whether the drugs are qualified.

3. if not qualified , demand party shall inform supply party immediately,supply party,if dissent exist, shall issue for reexamination in written form, or it will be seemed as acceptance. 

4.though checked and accepted,if not qualified products were checked out during demand party’s usage,supply party shall take responsibilities,and cooperate timely to solve and make up to satisfy demand party’s manufacturing

5.demand party’s check will not make supply party’s responsibilities exempted.

VIII. Liability for breach of contract of supply party:

1. Where supply party cannot deliver goods, it shall pay party A  % of the part payment which can’t be delivered(standard components, general drugs is 3-5%, non-standard components, and special components is 10-30%), and it shall also pay demand party the loss incurred.

2. for drugs delivered by supply party, if the drug variety, types, specification, color are not in accordance with contract terms, if demand party agrees to use, then the price shall be set according to the quality; if demand party can’t use, then according to the specific status, supply party is responsible for choosing , repair, or exchange, supply party shall undertake the the fees incurred; if it is urgent choose, repair for use, then supply party shall organize to choose, repair immediately or demand party directly organize to choose and repair, then supply party shall undertake expenses incurred(labor cost: 10 Yuan/hour.person); if supply party can’t repair or exchange, then it shall be dealt as non-delivery.

3. Drug package is not in accordance with regulations, it must be repair or re-packed, supply party shall be responsible for repair or re-package, and undertake the costs; while demand party doesn’t need repair or re-package and asks for compensation, supply party shall pay the amount equal to the value of lower part of unqualified packages than qualified ones, for goods destroy and loss due to unqualified package, supply party shall bear the compensation.

4. For supply party’s delay delivery, supply party shall contact demand party in advance, and explain the reason and solving method, and implement it after it obtains demand party’s approval, and shall pay demand party penalty fees for delay delivery, penalty fees shall be calculated in accordance with the corresponding loan interest rate stipulated by the People’s Bank of China, supply party shall pay the compensation for the loss caused to demand party.

5. For the drugs delivered in advance, drugs delivered excessively, and drugs 

type, varieties, specifications, color are not in accordance with the regulations, for the keeping and maintenance expenses paid by party A instead, and the loss not due to improper keeping, supply party shall be responsible for the fees. If supply party deliveries the goods in advance, after demand party receives goods, the payment may be settled within the delivery time specified in the contract, if the contract states goods shall be delivered by itself, then demand party may reject to deliver the goods in advance.

6. choosing, repair or exchange of goods due to unqualified drug materials, and it causes demand party to stop manufacturing to wait for materials, demand party has right to fine according to the severity, for each working day, al least 1000 Yuan may be fined, if it delays demand party to deliver goods, and then demand party may resort to air transportation, or the clients of demand party claim for compensation for delay delivery, then the fees shall be paid by supply party.

7. if the clients of demand party make complain and it is caused by the quality problems of drug materials provided by supply party, for the loss incurred to demand party, then demand party shall check and calculate tangible damages (expenses, claims) and intangible damages (company reputation), it shall notice in written form, after supply party clarifies quality problem and deduct from payment for goods, if supply party holds different opinion towards quality problem, it may submit for quality evaluation in Administration of Quality an Technology Supervision which locates in signing place.

IX. Liability for breach of contract of demand party:

Where demand party can’t pay supply party within the payment period, it shall communicate with supply party to explain reason and solving method; after it obtains supply party’s approval and pay penalty fees, penalty fees shall be calculated in accordance with the corresponding loan interest rate stipulated by the People’s Bank of China.

X. Confidentiality terms

1.

Without the permits from both parties, the content in this contract shall not be disclosed or publicized to the third party.

2.

Without the approval of demand party, the documents, specifications, technical documents, moulds and samples which supply party obtains from demand party, supply party shall not transfer, publicize, disclose, or be utilized to third party.

3.

Supply party is forbidden to transfer  documents, technical documents, moulds and samples supplied by demand party to the third party for processing, manufacturing drugs for sale, supply party shall be responsible for all the consequences incurred.

4.

This term keeps valid after this contract expires.

XI. Termination of contract

1.

If supply party has the following items, demand party may terminate this contract immediately without any notice:

A.

Behaviors and facts which breach the terms in this contract;

B.

During the supply period, supply party can’t meet the amount and quality standard;

C.

Operation are stopped by government, or punished or qualifications are Stopped canceled;

2.

Once the contract is terminated, after supply party receives demand party’s notice, supply party shall return the moulds, documents, technical documents supplied by demand party, and shall pay all the debts.

3.

for the losses of demand party due to breach of contract terms, demand party has right to require supply party to compensate the loss.

XII. Settlement of disputes

Disputes arising from this contract shall be settled through both parties’ negotiations, if it can’t be settled through negotiations, they can sue for court located in the signing place.

XIII. Contract validity

This contract takes effect since the seals of both parties. This contract is in duplicate, each party holds one.

Contract validity: from January 1, 2008 to December 31, 2010

In light of long-term cooperation and stability of both parties, within 3 months before this contract expires, if one party wants to extend contract validity, after the other party’s approval, then the contract validity may be extended.

XIV. The appendixes are the indispensable parts of this contract, and with the same legal effects. 

For other terms not mentioned, they should be solved by negotiation of both parties as supplementary contracts and with the same legal effects. 

		
	Demand party (seal): 

	Supply party (seal):

	Company name

	Company name

	Company address

	Company address

	Authorized

	Authorized

	 
	 

	Representative(signature):

	Representative(signature):

	 
	 

	Zhang Lin

	Huang Wenxiong

	    

	 

	Delegated person:

	Delegated person:

	 
	 

	Date:December 24,2007

	Date:December 24,2007United States Securities and Exchange Commission Edgar Filing

Exhibit 10.21

Purchase Contract of Medicine Packaging Materials

Contract No.:

Party A: Xi’an Qinba Pharmaceuticals Co.,Ltd.

Party B: Shaanxi Daxin Plastics Co.,Ltd.

The parties hereto, in accordance with Contract Law of the People's Republic of China, through amicable negotiations, sign this contract.

I. Goods name, quantity & price, etc. (Please refer to Appendix)

The agreed goods unit price in this contract contains whole expenses incurred from goods purchase and after-sale service, including, but not limited to transportation expenses, insurance expenses, unloading expenses, ancillary data expenses, package probationary expenses, expenses of reagent consumables materials during inspection and acceptance, compulsive inspection expenses from third party supervision and inspection organization, training expenses, and after-sale service expenses, and etc. Goods unit price keeps steady during the implementation of this contract, except that altered by both parties in written form.

II. Requirements of goods quality 

1.

Goods provided by Party B shall corresponds with national standard of the People's Republic of China, industry standard, local standard, product quality standard of goods manufacturer, relevant technical specifications formulated by related departments, quality status and functional performance stated in product instructions.

2.

Goods provided by Party B shall be brand-new, equipped with certificate of inspection, and from legal supplying channel.

3.

Goods provided by Party B shall meet the following technical indications and parameters: requirements in notice documents, product instructions; refer to appendix; descriptions here

III. Goods Delivery & Acceptance

1.

Delivery place(detailed) and date: the specified place in Party A’s notice document

2.

Party B shall supply Party A with the corresponding and complete technical documents of the goods under this contract.

3.

Party B shall guarantee that goods package meets the requirements of transportation, and to protect goods from being rusted, destroyed or loss in transportation process.

4.

Party B is responsible for transporting and delivering goods to Party A at the agreed place, and shall pay all the costs incurred from transportation, this includes, but not limited to, transportation expenses, insurance expenses, unloading expenses, and so on.

5.

Party B shall delegate technicians to guide on site and supply all the technical support of goods usage.

6.

After the delivery, Party A shall inspect and accept goods within 10 days. Inspection and acceptance content shall includes, but not limited to: (1) specifications, quantity and appearances; (2) the attached technical documents of goods; (3) goods components and configuration; (4) goods functions, performance and various technical parameters and standards.

7.

Inspection and acceptance standards: the specifications under this contract the delivery sample under notice document(if available ) 

8.

Where Party A accepts all the purchased goods, Party A shall confirm and issue Certificate of Approval, then it can be regarded as qualified.

9.

Where Party A finds that goods are not in accordance with the agreement, Party A shall have the right to reject goods and issue Notice of Rejection within 5 days. Party B shall re-supply goods in accordance with the agreement; otherwise, Party B will be regarded as delay delivery.

10.

Where Party B holds different opinion on the inspection result, Party B may delegate commodity inspection department where Party A is governed to recheck. If recheck result shows that goods is not in accordance with the agreement, then the recheck fees shall be paid by Party B; if recheck result shows that goods is in accordance with the agreement, then the recheck fees shall be paid by Party A.

IV. Payment 

The fees shall be paid in full amount within 60 days after goods are accepted as qualified.(applicable for total amount less than RMB 100,000 Yuan)

V. After-sale service terms

1.

Guarantee period: Party B’s guarantee period for free is 30 days (guarantee period starts from issuing date of Certificate of Approval, for amount more than RMB 100,000 Yuan, it depends on Party A’ functional departments’ clarification, and its issuance of acceptance report )

2.

Guarantee method: door-to-door service. Other terms depends on the promised terms in tender document.

3.

When guarantee period expires, if Party A needs Party B to continue to offer maintenance service, it may be negotiated by both parties.

(whether to reserve this term  is depended on both parties’ negotiations,  and detailed terms shall be specified ) 

VI.Liability for breach of contract:

1.

Both parties shall implement this contract, any party which could not fulfill its duty shall undertake liability for breach. Breaching party shall undertake the loss incurred to observant party, it includes, but not limited to, direct economic loss, indirect economic loss, and attorney fees, travel fees as well as transportation fees incurred from observant party to investigate responsibility.

2.

Where goods supplied by Party B is not in accordance with the agreement, and will not exchange goods, Party A has right to reject to accept, and Party B shall pay Party A penalty fees equal to 5% of total payment.

3.

Party A rejects to receive goods with due reason, Party A shall pay Party B penalty fees equal to 5% of total payment.

4.

For Party B’s delay delivery, it shall pay Party A penalty fees equal to 3‰ of total payment.Where delay period exceeds 5 days, purchaser has right to terminate contract.

5.

Where Party B doesn’t provide maintenance service in accordance with terms in this contract, Party A has right by itselt to delegate the third party to supply needed technical support and after-sale service, the entire fees incurred shall be paid to Party B, if losses are incurred due to this, then Party B shall undertake compensation liability.

VII.Security Ability for Defects of Right

1.

For the goods delivered, Party B shall guarantee Party A not be claimed any rights from the third party.

2.

Where the third party claims ownership on subject matter in this contract, to claim for infringement of intellectual property, Party A has right to terminate contract, and may hold Party B liable for breaching contract.

3.

During the implementation of this contract, Party A has adequate proofs to prove that the third party possibly claim right on subject matter in contract, Party A has right to terminate the corresponding payment, except that guaranteed reasonably by Party B.

4.

For disputes arising from  third party’s claim for right, Party B shall undertake the corresponding legal liabilities and litigation fees, attorney fees, and other fees for settling disputes, and the economic loss caused to Party A.

VIII. Assumption of risk

1.

The risk of goods destroy or loss, Party B shall undertake before Party A’ inspection and acceptance, Party A shall undertake the risk after inspection and acceptance.

2.

Where Party A rejects to accept goods or terminate contract due to goods quality not in accordance with the contract, Party B shall undertake the risk of goods destroy or loss。

3.

Where Party A undertakes the risk of goods destroy or loss, and it doesn’t influence Party B to fulfill its duty, Party A shall requires Party B to undertake the breaching liability.

4.

Where Party B undertakes the risk of goods destroy or loss, if goods are destroyed or lost, Party B shall re-supply goods in accordance with the contract within  days, otherwise, Party B will be regarded as delay delivery.

5.

Where Party A undertakes the risk of goods destroy or loss, it won’t exempt Party A from payment.

IX. Disputes arising from this contract shall be settled through both parties’ negotiations, if it can’t be settled through negotiations, they can sue for court located in the signing place.

X. This contract is in quintuplicate(Party A’s functional departments keep 2 for record, user keeps 1, Party B keeps 2), each of them is regarded as original with the same legal effects. For other terms not mentioned, they should be solved by negotiation of both parties.

XI. Contract validity: January 1, 2008 to December 31, 2010

Notes: this contract takes effect since the seals of both parties.  

               

		
	Party A (seal): 

	Party B (seal):

	 
	 

	Authorized Representative(signature):

Zhang Lin

	Authorized Representative(signature):

Wang Guixiang

	    

	 

	Responsible Person of user :

	 

	Date:December 26,2007

	Date:December 26,2007

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