c59401_ex10-3.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing









Exhibit 10.3


Kunming Shenghuo Pharmaceutical (Group) Limited Inc.


Domestic Short Term Credit Insurance

	 
	
Insurance Policy	
	 






	
Insurance No.:      		
11619030901009000001	
	 	
	
Contract No.:		
259653		 	
	 	
	
Insurer:		
Ping An Property & Casualty Insurance of China, Ltd	
	 		
Address:      		
Xinghe Development Centre Plaza	
	 	 	Fuhua Road, Futian District
	 		 		
Shenzhen, China	
	 	
	
Insured:		
Kunming Shenghuo Pharmaceutical (Group) Co., Ltd	
	 		
Address:		
No. 2 Jingyou Road	
	 		 		
Kunming Economy & Technology Development District	





This insurance contract consists of this insurance policy, the supplementary provisions attached hereto, the “Basic Provisions of China Ping An Domestic Short Term Credit Insurance,” endorsement, and the
“China Ping An Domestic Credit Insurance Bills” submitted by the Insured. 


For the definition of the bold words shown on the contract, please see the “Basic Provisions of China Ping An Domestic Short Term Domestic Credit
Insurance.” 


Insurer provides Insured with credit insurance and other related services according to this insurance contract.  This contract applies to all sales by the Insured within the territory of PRC and within the coverage of this
contract. 


	1-     	Insurance Coverage – Underwriting
    Ratio – Fees Incurred from Insurance and Related Services
	 	 	 	 
	 	      	1.1       	Insured Business
	 	 	 	 
	 	 	 	Sales of Medicines
	 	 	 	 
	 	 	1.2	Insured Country
    and Region
	 	 	 	 
	 	 	 	People’s Republic
    of China


 












	 	 	
1.3      	
Underwriting Ratio
	
	 
	 	 	 	
90%

	
	 
	 	 	
1.4	
Premium Rate
	
	 
	 	      	 	
0.333%

	
	 
	 	 	 	
If the loss ratio (the indemnity paid by the Insurer / the amounts of the premium the Insured paid) exceeds or equals 65% during the term of this policy, the premium rate will be adjusted up by 10%, which is
retroactively applicable to the effective date of this contract.

	
	 
	 	 	
1.5	
Minimum Premium
	
	 
	 	 	 	
RMB 639,400

	
	 
	 	 	
1.6	
Service fees
	
	 
	 	 	 	
See Provision F58.01 for details.

	
	 	 	 	 
	2-	Maximum Indemnity Liability 
	 	 
	 	30 times the premium paid during
    the term of the policy.
	 	 
	3-	Maximum Credit Duration
	 	 
	 	120 days following the date of the
    invoices for goods sold or services rendered.
	 	 
	4-	Maximum Term for Opening Invoices 
	 	 
	 	Within 10 days after delivery of
    goods or rendering of services.
	 	 
	5-	Deadline to Inform the Insurer
    of the Occurrence of Overdue Arrearages 
	 	 
	 	150 days following the date of the
    invoices issued for the goods sold or services rendered.
	 	 
	 	If the due date is extended, according
      to the Article 10 of “Basic Provisions of China Ping An Domestic Credit
      Insurance,” the deadline to inform the Insurer of the occurrence of
      overdue arrearages will be no more than 30 days following the extended
    new due date.
	 	 
	6-	Applicable Currency
	 	 
	 	The applicable currency of this contract
    is RMB.


 












	7-     	Contract
    Term
	 	 
	 	This
        contract is effective from the first minute of May 5, 2009, and the first
    insurance period will expire on the last minute of May 4, 2010.
	 	 
	 	This
        contract will be renewed for another one year automatically, unless one
        party to this contract informs the other party in writing 30 days before
    the termination of this contract of its desire to terminate this contract. 
	 	 
	8-	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 @		
RMB 150,000	
	 	
@rating @@		
RMB 400,000	
	 	
@rating @@@		
RMB 800,000	
	 	
@rating @@@@		
RMB 800,000	






Underwriting ratio: 90% of the net debt amount (including value-added tax) (underwriting ratio for certain buyers who have @ rating certification is
100%). 


If a buyer’s credit rating is @@@@, this contract can grant the buyer over RMB 800,000 credit line upon the buyer’s application.  Under this circumstance, the underwriting ratio will be the usual ratio decided by
the Insurer under the contract. 


When loss occurs, we will convert the credit line corresponding to @ rating of credit to currency according to the exchange rate on the date the Insured gives the notice of occurrence of overdue arrearages. 

	
C102 – Comprehensive Recovery Services	
	 
	
D 101 – Relative Deductible	
	 
	
Relative Deductible: RMB 3,000.	
	 
	
F 304 – Premium and Quarterly Revenue Report	
	 
	
       •     Report revenue quarterly.	


















	 	• 	Annual premium by
    a lump sum payment.
	 	 
	 	F5801 – Standard
          of Charges 

    For managing the line of credit: RMB
    800 per year per each buyer. 

    For placing a case on file for investigation
    or litigation: RMB 1,000 for each case. 
	 	 
	9-     	Arbitration
          Location 

    Pursuant to the section 7 of insurance
    terms, if the parties of this contract have any disputes, arbitration shall
    be held in Beijing, China. 
	 	 
	 	This
        contract was executed in duplicate and was entered into on May 4, 2009
    in Kunming City, Yunnan Province, China.





	
Ping An Property & Casualty Insurance		 		
Kunming Shenghuo Pharmaceutical (Group)	
	
Company of China, Ltd.		 		
Ltd., Inc.	
	
Insurance Policy Exclusive Seal		 		
(Stamp)	
	
No.738		 		 	
	
(Stamp)		 		 	
	
Yi Qing (Stamp)		 		
Feng Lan (Stamp)