Short Term Domestic Credit Insurance      

 
Insurance Policy
 

Insurance policy No.:11619000901010000001
Contract No.: 259653/10
Insurer:  China Ping An Insurance Co., Ltd
Address: Xinghe Development Centre Plaza, Fuhua Road, Futian District, Shenzhen
City, China

Insurant: Kunming Shenghuo Pharmaceuticals Co., Ltd
 Address: No. 2 Jing You Road, Kunming National Economy & Technology
Developing District, Kunming, China, 650217

This insurance contract consists of this insurance policy, the supplementary
provisions attached hereto, the “Basic provisions of Short Term Domestic Credit
Insurance of China Ping An Insurance Co., Ltd” and the “Domestic Credit
Insurance Application Form” submitted by insurant.

Please see the definition of the words in bold type in the “Basic provisions of
Short Term Domestic Credit Insurance of China Ping An Insurance Co., Ltd”.

Insurer provides credit insurance and related services according to this
insurance contract. This contract applies to all sales which are conducted by
insurant in PRC and within the coverage of this contract.

1-
Insurance Coverage – Percentage Of The Insurance Coverage – The Fees Of
Insurance And Related Services

1.1
Business insured

Sales of Drugs

1.2
The country and area insured

People’s Republic of China

1.3 
Percentage of the Insurance Coverage

90% (including VAT)

1.4
The Rates of Insurance Premium

0.40%

1.5
The minimum premium

   RMB 720,000.00

 

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The insurer understands that financing need is one of the reasons that the
insurant purchases the insurance, but the insurer signs this insurance contract
based on the risk valuation and risk management on the insurant’s annual credit
sale business and the insurant has fully realized this and promises that it will
not ask for surrender midway due to the changes in the insurant’s financing
need. The insurant understands that even if the insurant unilaterally asks for
surrender midway, it must pay the insurer the full amount of the minimum
premium.

1.6
Service fees

   See the provision F58.01.

2-
Maximum compensation liability

40 times of the premium paid in the duration of the insurance.

3-
The Longest credit period

120 days following the date of the invoices of sold goods or services provided.

4-
The longest term of opening invoices

10 days from the date of delivery of goods or services provided.

5-
The longest term of informing the insurer the occurrence of overdue debts and
application for the insurer’s involvement

150 days following the date when the invoices are draw up for the goods sold or
services provided.

If the pay day is extended, within the scope of the Article 14 under the “Basic
provisions of Short Term Domestic Credit Insurance of China Ping An Insurance
Co., Ltd”, the term of informing the occurrence of overdue debts will be no late
than 30 days following the extended pay day.

6-
The term of informing the overdue debts

Besides fulfilling other obligations regulated in this contract, when any buyer
doesn’t make the payment more than 60 days after the initial pay day whatever
the reason is (including the condition that the insurant has extended the term
of buyer’s payment), the insurant must inform the insurer immediately, unless
the insurant has sent the insurer the overdue debts notice, or must send the
insurer the overdue arrearages notice based on the provisions of this insurance
contract.

If the insurant has not fulfilled this obligation, the insurer doesn’t need to
take the indemnification responsibility or the indemnification responsibility on
the losses related the delivery, transportation or service occur after the date
of the overdue arrearages notice.

7-
Applicable currency

The applicable currency of this contract is RMB.

8-
Contract Term

This contract becomes effective from May 5, 2010 and the first insurance period
will expire on May 4, 2011.

 

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Except for the Article No. 30 under the Basic Provisions and other related
provisions, if the insurant doesn’t pay the full or part amount of the premium
and doesn’t pay the full amount of the premium due with 15 days after getting
the statement of account from the insurer, this contract will be terminated and
the insurer will not return the received premium.

9-
Supplementary provisions

The supplementary provisions below are part of this contract.

B1504 – Line of credit

@ rating of credit

@rating X
0
@rating NR
0
@rating R
RBM 80,000
@rating @
RMB150,000
@rating @@
RMB400,000
@rating @@@
RMB800,000
@rating @@@@
RMB800,000

The percentage of the insurance coverage:  90% of the net of debts (the value
added tax included). The percentage of the insurance coverage towards certain
buyers who holds @ rating certification can be 100%.

If a buyer’s credit rating is @@@@, it can be granted a line of credit which is
more than RMB 800,000 by application.

When loss incurs, we will convert the line of credit corresponding to the @
rating of credit into applicable currency according to the exchange rate at the
date when the insurant informs the occurrence of overdue arrearages.

C102 – Comprehensive recovery services

D 101 – Relative deductible
  Relative deductible: RMB 3,000.

F 304 –Premium and Quarterly declaration of revenue
Term of declaration: before 15th in the current month of every declaration
period.
· Declare revenue quarterly.
· Fully pay the yearly premium at one time.

 

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F5001-Profit Sharing
Proportion of fixed insurance fee: 40%
Proportion of returned profit: 15%
Proportion of increased insurance fee: 15%

F5801- Standard of charges
Fees for managing the line of credit:

For the buyer who holds an effective line of credit, the fee for managing the
line of credit is RMB 828/year for each buyer, which should be paid before the
insurer’s investigation on the buyer’s line of credit.

In the end-of-period adjusting to the insurance policy, if the insurer rejects
to approve the line of credit according to the actual amount of the effective
line of credit and the investigation on the line of credit, the fee is RMB
414/year for each buyer.

In the condition that the insurance policy has been renewed, as to the effective
line of credit applied for 45 days before the expiration date of the insurance
policy, the insurer shall not charge the fees for managing the line of credit
and related fees will be charged within next insurance period.

Fees for registering a case to claim: RMB 1000 for each case.

10-
Amount of recovery

Regardless of the provisions in the Comprehensive Recovery Services and Article
24 of “Basic provisions of Short Term Domestic Credit Insurance of China Ping An
Insurance Co., Ltd”, once the insurant trade with its customer at the line of
credit exceeding which is granted by the insurer and as of the date when the
insurant submitted its “Notice of occurrence of overdue debts and application
for the insurer’s involvement ” the actual debt (no matter whether it has
matured or not)of its customer is equivalent to or exceeds 130% of the
customer’s line of credit which is granted by the insurer, then both the
insurant and insurer shall share the charges occurred (including those charges
occurred by taking any legal or illegal measures) in negotiated proportion. The
indemnification get for recovery before or after the indemnity shall also be
distributed in negotiated proportion.

11-
Place of arbitration

Pursuant to the section 10 of insurance clauses, if the two parties of this
contract have any dispute, the place of arbitration will be Beijing, China.

This contract is done in duplicate and is entered into on May 4, 2010 in Kunming
city, Yunnan Province, China.

Authorized signatory: Yi Qing
 
Authorized signatory: Feng Lan
China Ping An Insurance Company
 
Kunming Shenghuo Pharmaceutical (group) Co., Ltd.
(Seal)
  
(Seal)

 

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