Document:

Purchase Agreement

 

Party A: Beijing Tong Ren Tang Technologies Co. Ltd. (Operation Branch)

Legal representative or the authorized personnel (signature): Wu Yue

Tel: 010-87632353

Fax: 010-67681635

Bank of deposit: Dongtiejiangying Office, Fangzhuang Branch, Industrial and Commercial Bank of Beijing

Account No.: 0200000409007005552

Registration No. of tax payer: 110192722600841

Address: No. 16 North Tongji Road, Economic and Technological Development Zone, Beijing City

Mailing address: No. 20 South 3rd Ring Road, Fengtai District, Beijing City

Post code: 100079

Date:

Party B: Shandong Hua Wei Pharmaceutical Co., Ltd.

Legal representative or the authorized personnel (signature):

Tel:

Fax: 0536-8297686

Bank of deposit: Nanguan Branch, Industry and Commercial Bank of China, Weifang City

Account No.: 1607001109022504186

Registration No, of tax payer: 370705706202237

Address: No. 258, East Fushou Street, Kuiwen District, Weifang City

Post code: 261041

Date: January 1, 2011

To maintain the product price of Tong Ren Tang and guarantee the smooth channel and market order of the first class distributors, the two parties reached this Contract based on the principle of mutual cooperation, equality, mutual benefits and through friendly negotiation.

Article 1: Conditions of distributors

	
1.

	
Possessing the Business License for Legal Person, Operation Permit for Pharmaceutical Products, Goods Supply Practice, which shall be within the valid period, and all the columns of contents shall be consistent; if the above materials are changed, it shall be update timely.

	
2.

	
Possessing the drugs operation ability; the warehouse standard and Party B’s management shall meet the requirements of GSP, to guarantee Party A’s drugs quality during the storing period.

	
3.

	
Purchasing the categories according to the requirements and complete the distribution index according to the progress. It is based on the principle of paying before receiving the goods.

	
4.

	
The operation rate for distributing the products of Tong Ren Tang Technologies Co. Ltd. shall reach above 95%., and the top 35 products regulated in the operation company shall be sold and promoted at first.

  

  

  

Article 2: Annual distribution index

The distribution amount for Chinese patent medicine of Party A distributed by Party B during the agreement term shall reach RMB 15 million.

Article 3: Sales term, region, settlement way and rewards

	
1.

	
The sales term is from Jan. 1, 2011 to Dec. 30, 2011.

	
2.

	
The sales region is in Shandong Province.

	
3.

	
Settlement way:

	
(1)

	
Party B shall settle the goods payment in the ways like cash, bank draft and cheque, and Party B shall settle all the payments of Party A before Nov. 30, 2011of that year.

	
(2)

	
If Party B settles the goods payment in the way of bank acceptance, which is only limited in the acceptance bill of Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of Communications. Party A will charge certain proportion of bank discount costs according to the period and face value of the bank acceptance bill. If the bank acceptance bill period is within three months, it shall charge the handling fees according to the face value of           , and charge the handling fees according to the face value of           if the bank acceptance bill period exceeds three months.

	
(3)

	
Party B shall pay according to the cash acceptance ratio of 6:4 according to the company’s regulations; if the acceptance bill exceeds the regulated proportion, the exceeding part shall be deducted and fined by 5%. On principle, the Company only charge the acceptance bill without the endorsement within three months, if it has the endorsement, which shall not exceed the fourth endorsement, and it shall fill the name of “Beijing Tong Ren Tang Technologies Co. Ltd.” to prevent its loss.

	
4.

	
Rewards:

	
(1)

	
Party B completely assumes the agreement clauses, and there is no cross-regional and over-range sales and the situation that violating the price system.

	
(2)

	
Party B shall provide the actual flow and storing information timely and freely to Party A.

	
(3)

	
Party A shall make the reward according to the annual sales situation of Party B, and Party B shall not deduct awards from the goods payment in any forms.

	
(4)

	
The rewards shall be based on the returned money, and the payment time shall be based on the payment time agreed in the agreement.

	
(5)

	
Party A will give the awards at the end of the year if meeting the above requirements. (The awards shall have clear discount on the value-added invoice)

Article 4: Quality standard

Party A shall provide the products complying with the regulations and standard of Chinese Pharmacopoeia or the standards issued by the relevant department.

Article 5: Supply category and acceptance

	
1.

	
Party B shall make order according to the agreed price, and the purchasing amount of each time shall not be less than RMB 30,000, and it requires ordering the products from Party A in the way of signing the sales contract.

  

  

  

	
2.

	
Party B shall make the acceptance within 7 days after receiving the goods, if the products category, specification, quantity and quality fails to comply with the agreement specifications or the agreements of the two parties, it shall propose the objections to Party A within the specified acceptance period; meantime, it shall keep well the goods. Party A shall appoint the personnel to handle within ten days or the two parties negotiate to solve. If Party B doesn’t propose the objections within the acceptance period, which will be deemed as that the ownership has been transferred to Party B. It shall not return the goods except for the quality problems.

Article 6: Responsibility of Party B

	
1.

	
Party B shall purchase the products from Party A, and it shall not purchase the products of Tong Ren Tang from other distributors; if Party A has no goods, it can purchase from this region or other first-class distributors, and it shall notify Party A in the written form before purchasing. Once Party A can supply the goods normally, Party B shall stop the adjustment and recover the purchase from Party A.

	
2.

	
Party B shall make sales in this region, and the cross-regional selling is forbidden. The second-class distributors shall not make the cross-regional sales.

	
3.

	
Party B shall sell the goods with the price that is higher than 3& of the supply price of Party A. As for the customers without invoices, it shall sell the goods with the price that is higher than 6% of the supply price (excluding the delivery price of dominant products). It shall restrict the second class distributors and terminal distributors to maintain the price commonly.

	
4.

	
Party B promises to provide the sales flow situation of the categories in the agreement freely to Party A within five working days of each month according to the format requirements of Party A, including the selling unit, product name, sales quantity, sales price, sales amount, sales lot No.; the inventory information includes the commodities’ name, specification, quantity and inventory lot No. It shall send the electronic version of sales flow situation to the appointed mailbox.

As the distributor of Party A, Party B has obligations to accept four times of spot inspection for the category inventory of Tong Ren Tang during the agreement period, and the inspection includes drug name, lot No. and quantity; meantime, the accountant of Party B has right to provide purchase, sales and inventory data and memorandum account of all the categories to Party A.

	
5.

	
Party B shall accept the First-class Distributors Sales & Inventory Service System of Beijing Tong Ren Tang Technologies Co. Ltd. Operation Branch; Party A shall offer the scanning instruments of the electronic supervision code of the products freely; it shall upload the sales and inventory materials of Party A’s products according to the requirements.

	
6.

	
Party B shall not make false and exaggerated advertisement and propaganda for the product effectiveness of Party A’s products, and it shall be responsible for all the results aroused herein.

Article 7: Penalties for violating the agreement price, cross-regional sales and failing to complete the agreement

Party B shall comply with the price regulated in the agreement to sell the goods; otherwise, Party B will be deemed as breach of the contract by Party A and has the following penalties:

	
1.

	
1st time: Party A shall make the warning to Party B and provide the limited period to Party B for price adjustment.

  

  

  

	
2.

	
2nd time: Party A shall fine the year-end award of RMB 2,000 to RMB 5,000 of Party B.

	
3.

	
3rd time: Party B’s qualification for distributing this product will be canceled, and the year-end award of this category will be not paid.

	
4.

	
If the lower class distributors provided by Party B violate the goods supply price of Party A, which will be deemed as violating the policy and shall be handled by the regulations of Article 3.

	
5.

	
The products of “Tong Ren Tang” shall be sold in the regulated scope. If Party B violates the regulations of Party A to sell the goods out of the regulated scope (including the second class of cross-regional sales), which will be punished once being investigated.

1st time: Party A shall make the warning to Party B and request Party B to take back the cross-regional sold products.

2nd time: Party A shall fine the year-end rebating of RMB 2,000 to RMB 5,000 of Party B.

3rd time: Party B’s qualification for distributing this product will be canceled, and the year-end award of this category will be not paid.

	
6.

	
If it fails to complete the sales agreement, the year award will not be paid.

Article 8: Others

	
1.

	
The unsettled matters herein shall be solved through negotiation by the two parties.

	
2.

	
This Agreement has five copies, with the distributor holding one, Operation Company holding two and the business operation Dept. and Market Management Dept. holding one respectively.

	
3.

	
The Agreement will take effect after signing and sealing of the two parties, with the valid period of one year.Purchase Agreement

2011

         

Purchaser (Party A): Shandong Hua Wei Pharmaceutical Co., Ltd.

Supplier (Party B): Beijing Tong Ren Tang Technologies Co. Ltd. (Branch of New Products)

The two parties reached this Contract based on the principle of mutual cooperation, equality and mutual benefits through friendly negotiation, in accordance with the Contract Law of the People’s Republic of China and relevant laws and regulations.

Article 1: Party B confirms that Party A is the regional distributor of Party B’s products in 2011, distributing the products supplied by Party B in Shandong Province (the Gelatinum Asini products are excluded). The two parties have the purchase and sales relations within the fixed period, and they operate independently as well as assume the respective legal responsibilities.

Article 2: Conditions of distributors:

	
1.

	
The distributors operating the Chinese patent medicine shall possess Business License for Legal Person, Operation Permit for Pharmaceutical Products, Goods Supply Practice, Tax Registration Certificate and Organization Code Certificate;

	
2.

	
The distributors operating food and health food shall possess the Food Circulation Permit and Sanitation License;

	
3.

	
Possessing adequate medicine operation ability and operation scale, focusing on the business reputation and observing the market behaviors standard;

	
4.

	
Having complete channels in the specified region, having strong distribution ability and logistics delivery ability as well as good terminal network.

Article 3: Responsibility and obligations of Party A and Party B:

	
(1)

	
Responsibility and obligations of Party A:

	
1.

	
Seriously observing the market regulations and rules.

	
2.

	
The operation rate of Party A for Party B’s products shall achieve 80%.

	
3.

	
The retail market coverage rate for the category sold in distributor’s place shall achieve above 80%.

	
4.

	
Party A shall bring Party B’s category to hospitals in its locating city or region.

	
5.

	
Party A shall affirm the distributors in the third level counties and cities in its province, and the sales coverage rate of the retail terminals in distributor’s place shall achieve above 70%.

	
(2)

	
Responsibility and obligations of Party B:

	
1.

	
Party B shall provide the licenses and relevant procedures needed for the operation to Party A.

	
2.

	
Party B shall guarantee the normal supply and quality of the drugs, if the drugs have the quality problems, Party B shall return timely once being verified.

  

  

 

Article 4: Annual distribution index

	
1.

	
The total amount of the products of Party B sold by Party A during this year is RMB 5 million (tax included); the amount for the first quarter is of RMB____, for the second quarter is of RMB____, for the third quarter if of RMB____, for the fourth quarter is of RMB____. The agreement amount of the single category is of RMB____(tax included).

	
2.

	
The sales agreement index of this year shall not be lower than the index of last year.

Article 5: Way of ordering

Party A shall provide the copies of ID card of the salesman with the ordering right, certificates copies and authorized power of attorney of marketing personnel; the salesman of Party A shall make ordering to Party B by means of written ways (including ordering, letter, fax and telegraph, etc.)

The written ordering shall have the signature of authorized salesman or seal of Party A’s company, clarifying the category, specification, quantity, delivery period, delivery way and settlement way.

Article 6: Way of supply

Party B shall arrange the goods supply according to the annual and quarter plans submitted by Party A. If needed the adjustment, it shall notify Party A in advance of one month by written or oral forms. Once Party B delivers the goods to the warehouse of Party A, Party A shall not request changing or canceling the ordering.

Article 7: Quality standard: The products provided by Party B shall comply with the state pharmacopeia regulations or the standards issued by the relevant department.

Article 8: Packing standard: The packing for the goods provided by Party B shall adapt to the requirements of drugs quality, to facilitate the storage, transportation and usage.

Article 9: Way of delivery, way of transportation, place of delivery and assuming of transportation fees

	
1.

	
Goods delivering: Party B shall deliver the goods to Huawei Warehouse, Pharmaceutical Logistics Park, Zhuangjian Road, Weifang City of Party A within ____working days, and the transportation fees shall be assumed by Party B.

	
2.

	
Picking up the goods by Party A itself: Party A picks up the goods in from the warehouse of Party B, and Party A shall assume the transportation fees.

	
3.

	
If the delivery place of Party A is changed, it shall notify Party B in the written from.

Article 10: Price and deduction rate:

	
1.

	
The supply price of Party B’s products is_____according to the sales policy of 2011 of Party B.

	
2.

	
The single category and ordering products category are included in the Agreement.

	
3.

	
Party B has right to report the retail price and supply price commonly adjusted and approved by the prices management department.

	
4.

	
The sales price of Party A shall not be lower than the supply price provided by Party B to Party A (The supply price of single category and ordering products category are included in the Agreement) .

	
5.

	
Party A must maintain the products and enterprise image of Tong Ren Tang, and execute the sales price affirmed by the two parties.

  

  

 

	
6.

	
Party A shall not make dumping, underselling and cross-regional selling of Party B’s products, and provide the detailed information such as supply unit, supply deduction rate, supply price and date to Party B without conditions in each month/end of the quarter. If it violates the Article, Party B has right to terminate the agreement, and Party A shall assume the responsibility for breach of the contract.

Article 11: Ordering category and single category

	
1.

	
Party B shall guarantee the goods resource supply of the products during the agreement period, and Party B shall deliver the goods monthly; meantime, it shall also enhance the market supervision in accordance with the entire Lot. No. to deliver the goods or deliver the goods according to the Lot. No.;

	
2.

	
If Party B fails to guarantee the goods supply for the ordering category, which causes that Party A fails to fulfill the schedule agreed in the Agreement, Party B shall negotiate with Party A to adjust the agreement quantity in the written form;

	
3.

	
Party A shall introduce the categories as the main categories, and strengthen the promotion of OTC and medical market;

	
4.

	
Party A has the responsibility to supervise the market in this region, if it finds that other distributors have the low-price selling or cross-regional selling behaviors in this region, it shall collect the relevant information timely and notify to Party B in the written form;

	
5.

	
Party A and Party B shall commonly coordinate to make the second-time distribution for this category in the agreement region; Party B shall guarantee the smooth sales channel;

	
6.

	
Party B has responsibility to request for the product sales price of the second-class distributors, and that the retail price shall not be lower than the minimum price regulated in the Agreement.

Article 12: Brand protection:

	
1.

	
Party A shall maintain the brand and enterprise image of Tong Ren Tang; without the permission of Party B, Party A shall not make the propaganda in Party B’s name in any forms;

	
2.

	
Without the written permission of Party B, it shall not use the products sold by Party B in network marketing.

Article 13: Way of settlement: Party A shall settle the goods payment in the ways like cash, bank drafts, bank telegraphic transfer and cheque. The goods payment of Party A at the end of the year shall be make zero clearing. As for the way of telegraphic transfer, the payment date shall be the date that the payment transferring to the account of Party B (or the account appointed by Party B); as for the way of drafts, the payment date shall be the paying completion date.

Article 14: Limit of credit: According to the credit appraisal result of Party A made by Party B, the credit rating of Party A is determined as______; the limit of credit is RMB ______, which shall be make the zero clearing at the end of the quarter or end of the year according to the requirements of Party B.

Article 15: Sales awards:

	
1.

	
Party B’s products (including the single category) shall be supplied according to the sales policy of 2011, and Party A enjoys the sales discounts after completing the agreement.

  

  

 

	
2.

	
Party B shall make the quarter review and annual awards for Party A. Party A shall complete 50% of the quantities in this agreement within half a year, otherwise, Party B will deduct the year-end awards of Party A.

Article 16: Acceptance: Party A shall make the acceptance within 5 days after receiving the goods. If it finds that the quality category, specification, quantity and quality fail to meet the agreement regulations or the provisions of the two parties, it shall propose the objections before the acceptance period expires; meantime, Party A shall keep well the goods. Party B shall appoint the personnel to dispose within 3 days or the two parties shall negotiate to solve. If Party A fails to propose the objections during the acceptance period, which will be deemed as that the goods ownership has been transferred to Party A, and the goods shall not be returned owing to the reasons except for quality problems.

Article 17: Responsibility for breach of the Agreement

	
1.

	
If Party A fails to execute according to the clauses of the Agreement, Party B will cancel all the reward policies.

	
2.

	
If Party A fails to pay off the goods payment during the term agreed in this Agreement, for each overdue day Party A shall pay the liquidated damages to Party B of 5/10,000 of the defaulted goods payment. Other default behaviors of the two parties shall comply with the regulations of the Contract Law.

	
3.

	
If Party A violates the regulations of brand protection, Party B has right to investigate the legal responsibility.

Article 18: Penalties for breach of the agreement price and cross-regional sales:

	
1.

	
Party A shall seriously comply with the price agreed to sell the goods during the distribution process, and it shall not repay a debt or barter with Party B’s products, and take the guidance and supervision for the delivery price of the second class distributors in this region and the retail price of the terminal stores, otherwise, Party A will be deemed as breach of the Contract by Party B.

	
2.

	
Party A shall make sales according to the region regulated in the Agreement, if there are cross-regional behaviors, Party A will be deemed as breach of Contract of Party B.

	
3.

	
If the lower class distributors of Party A violate the agreement to sell the goods in a low price or have the cross-regional sales behaviors, and Party A fails to prevent timely, which will be deemed as breach of the Contract.

	
4.

	
Penalties for breach of the Contract

	
(1)

	
Party B proposes the warning to Party A and make national notification, and it shall make the fine with 2 to 5 times of total delivery amount of this lot of medicines, and Party B shall request Party A to adjust the price within the regulated period.

	
(2)

	
If Party A has the default behaviors again, except for the above penalties, Party B has right to cancel the distribution qualifications of the product for Party A, and will not pay any awards of this category.

Article 19: Disputes solution:

Any disputes aroused in this Agreement shall be submitted to the People’s Court located at Party B’s place.

  

  

 

Article 20: Valid period: This Agreement will take effect since January 1, 2011, with the valid period of one year. Since December 25 of last year, Party A’s ordering is adaptive to the regulations of this Agreement.

Article 21: The unsettled matters herein shall be negotiated to solve and signed the supplementary agreement. The supplementary agreement has the same legal effect with this Agreement.

Article 22: This Agreement has two originals, with Party A and Party B holding one respectively, and ____copy for the responsible department of the two parties.

Article 23: The addresses of the two parties listed in this Agreement will be deemed as the recipient addresses for receiving the notice. If one party changes the address, it shall notify the other party in the written form; otherwise, it shall assume the relevant responsibilities for failing to deliver the notice.

Party A: Shandong Hua Wei Pharmaceutical Co., Ltd.

Legal representative or authorized personnel (signature):

Address:

Post code:               Fax:       Tel:

Fax:

Bank of deposit and account No.:

Registration No. of tax payer:

Party B: Beijing Tong Ren Tang Technologies Co. Ltd.

Legal representative or authorized personnel (signature):

Address: No. 20 South 3rd Ring Road, Fengtai District, Beijing City

Post code: 100079

Cable address:                 Fax: 010-67654305              Tel:

Bank of deposit and account No.: Beijing Muxiyuan Branch of Bank of Communications  110060901018010019495

Telegraphic transfer:

Registration No. of Taxpayer: 110192722600841

Jan.1, 2011

  

  

 

Annual Sales Agreement of Ordering Catogery

	
 0

Project

Product name

	 	
Wholesale

price (RMB)

	 	
Minimum sales

price (RMB)

	 	
Actual selling

pieces of 2010

	 	
Growth

proportion of

2011

	 	
Sales target

value pieces of

2011

	 	
Agreement

amount (RMB

10,000)

	 
	
Liuweidihuang Pill (120 pieces*10 bottles)

	 	
13.00/bottle

	 	
15.00

	 	
992

	 	  	 	
1100

	 	
2608320

	 
	
Rendan (30 pieces*100 bags)

	 	
87.00/box

	 	
100.00

	 	
70

	 	  	 	
100

	 	
182700

	 

 

Annual Sales Agreement of Single Category

	
Project

Product name

	 	
Bill issuing

deduction

rate

	 	
Bottom Price

deduction

rate

	 	
Supply

Bottom Price

	 	
Minimum

sales price of

first-class

distributor

	 	
Minimum

retail price of

terminal

distributor

	 	
Agreed

quantity

(box)

	 	
Agreed

amount

(RMB

10,000)

	 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	
Total

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