Contract on Daphne Co., Ltd. Japan Signed

        On August 4, 2004, a Cooperative Agreement was signed by the Daphne Pharmaceutical Co., Ltd. Yunnan and Nippon Sanwa Int'l Co., Ltd. at the office of the Daphne Pharmaceutical Co., Ltd. Yunnan. Pursuant to the Agreement, each party will invest RMB 10 million yuan to form a joint venture named Daphne Co., Ltd. in Yokohama, Japan for joint development and sales of panax pseudoginseng health food. This move forms a basis for the Company to develop the international market and establish an international marketing network. It is an important strategic step toward moving to the international market. 
        This agreement was signed in the wake of the company's investigation and reasoning for a long period of time. Finally, on August 4, 2004, the Company and Japan Sanwa Int'l Co., Ltd. agreed by written instrument to co-sponsor a joint venture in Yokohama, Japan. The Chinese panax pseudoginseng and Japanese technology and intellectual property will be combined perfectly for joint development and production of panax pseudoginseng series health food.

        The guests present at the signing ceremony: Mr. Fu Jiaxing, vice Party chief of the Wenshan Prefecture and leader of Wenshan Prefectural Management Team for Panax Pseudoginseng Industry, Mr. Wang Yunling, standing vice governor of Wenshan prefectural people's government, Mr. Li Guo'an, member of the prefectural standing committee and chief of prefectural CPC Communication Department, Mr. Li Wenrong, vice governor of the prefectural people's government, Mr. Chen Mingshan, governor assistant, Mr. Hu Rong, governor assistant, Mr. Chen Guozhong, the Wenshan County government sheriff, and executives from the members of the Prefectural Management Team for Panax Pseudoginseng Industry.

        At the ceremony, Mr. Fu Jiaxing gave detailed statement about the status quo and vision of the Wenshan panax pseudoginseng business. Chairman Tang Xiuwen gave detailed introduction to the full process of the project of the Daphne Co., Ltd. Japan. Mr. 贺正嗣, president of the Japanese Sanwa Co., Ltd., gave introduction to the evolvement history and status quo of their company. He also expressed their confidence in the joint venture.