Loan
Contract


No.:
61613612302007000001


Type of Loan: current
capital





Borrower: Kunming Shenghuo
Pharmaceutical (group) Co., Ltd.





Place of Residence: No.2 Jing
You Road, Kunming National Economy and Technology Developing District,
650217





Legal representative:Guihua
Lan           Tel:
+86-871-7282608





Lender:China Construction
Bank, Kunming Heping Branch





Place of residence: No.328
South Ring Road, Kunming City, 650041





Person-in-charge: Hongbo
Wang            Tel:
+86-871-3512800





The
borrower applies for a loan and the lender agrees on it. According to relevant
laws, rules and regulations, this Loan Contract is entered into by and between
both of the two parties after reaching an agreement through
discussion.





1. Amount of
Loan


The
borrower applies for a loan of RMB30 million.





2. Purpose of
Loan


The loan
shall be used by the borrower to pay back the old loan,
No.:61613612302006000001.





3.  Term
of Loan


The loan
term is three
years as agreed in this Contract, dated from March 30, 2007 to
March 30,
2010.





When the
commence date of loan term under this Contract differs from that of the receipt
for the loan, the actual release date recorded in the dump voucher of the first
release shall prevail, and the promissory deadline of the loan shall be adjusted
accordingly. The receipt for the loan constitutes part of this Contract and
shall have the same legal force.





4.Loan Interest
Rate, Penalty Interest Rate, Interest Accrual and Interest
Settlement





4.1
            The
      Interest Rate of the Loan


The loan
interest rate under this Contract executes the annualinterest rate,
which is
subject to floating based on the benchmark rate, and the benchmark rate will be
adjusted in every12months. The interest rate adjustment date is the corresponding date of
the value date of that month. If there is no corresponding date of the value
date in that month, the last day of the month is set to be the interest rate
adjustment day.


4.2
            Penalty
      Interest Rate


4.2.1.
            The
      penalty interest rate executes the annual interest
      rate.


4.2.2.
            If
      the borrower does not use the loan complying with the provision of this
      Contract, the penalty interest rate will be the floating interest rate
      which is subject to floating by 100%based on
      the benchmark rate, and the benchmark rate will be adjusted in every12months. The
      penalty interest rate adjustment date is the corresponding date of the
      value date of that month. If there is no corresponding date of the value
      date in that month, the last day of the month is set to be the penalty
      interest rate adjustment day.





4.3.3.
            The
      penalty interest rate of overdue loan executes the annual rate, which is
      subject to floating by50% based on
      the benchmark rate, and the benchmark rate will be adjusted in every12months. The
      penalty interest rate adjustment date is the corresponding date of the
      value date of that month. If there is no corresponding date of the value
      date in that month, the last day of the month is set to be the penalty
      interest rate adjustment day.





4.3
            The
      value date defined in the Contract refers to the date when the first
      released loan is transferred into the account of
  borrower.





When the
loan is released for the first time, the benchmark interest rate refers to the
same term and same level loan interest rate announced by People's Bank of China
at the value date; thereafter, the loan interest rate or penalty interest rate
will be adjusted as the terms set forth above, and the benchmark interest rate
refers to the same term and same level loan interest announced by People's Bank
of China at the adjusting date, if People's Bank of China does not announce any
the same term and same level loan interest rate, the benchmark interest rate
refers to the same term and same level loan interest rate generally accepted
among the banks or generally used interest rate, except for the agreement
entered by both parties .





4.4
            The
      interest starts being calculated since the date when the loan is
      transferred into borrower’s account. The interest under this Contract is
      calculated on daily basis, the daily interest rate is equal to the monthly
      interest rate/30 and is also equal to the annual interest rate/ 360, if
      the borrower fails to pay the interest on time, the compound interest will
      be charged since next day.





4.5  
Interest Settlement





4.5.1 The interest settlement of fixed interest rate is calculated according to
set rate, the interest settlement of floating interest rate is calculated
according to the rate set at the floating period, if the floating interest has
been changed for several times during a single term, calculate each single
floating interest, then add all the floating interests to calculate the interest
during the term.





4.5.2 The
interest on the loan hereunder shall be settled on aquarterly basis,
with the date of settlement falling on the20th day of each
quarter.





5.
Loan Release and Drawdown





5.1
Precondition of Loan Release


5.1.1 The
lender shall only release the loan when the borrower meets the following
requirements, except for the whole or part of those requirements waived by the
lender:


5.1.1.1
The borrower has gone through all the procedures of obtaining the approval,
registration, delivery and other legal procedures in regarding to the loan under
this Contract.





5.1.1.2  Where
a guaranty is secured for this Loan Contract, the guaranty contract or other
methods of guaranty accepted by the lender shall have taken into
force.


5.1.1.3
No breach of any terms and regulations under this Loan Contract.





5.1.2  The
loan will be released within one business day of
the bank after the borrower meets all of the above mentioned
requirements.





5.2 Plan
of Loan Use


5.2.1 
  Date: March 30,
2007          Amount: RMB30m
million.





6.  Repayment
of Loan


6.1
Principle of Repayment


The loan
repayment under this Contract shall follow the principles as below:


6.1.1
With regard to the loan with an overdue principal for more than 90 days, the
loan with an overdue interest for more than 90 days or the loans otherwise
stated by laws, rules and regulations, the borrower shall pay back the above
mentioned expenses at first, and then carry out the repayment of rest loan
following the principle of principal first, interest second.


6.1.2 For
the loan without the above mentioned conditions, the borrower shall pay the
interest first, principal second, following with a principle of stop paying the
interest as long as the principal is clear.





6.2
Payment of Interest


The
borrower shall pay the interest on due at the interest settlement day. The first
pay-interest date is determined as the first expiry date for interest after
releasing the loan. The borrower shall not pay the interest any more the soon
after the last part of principal is clear.





6.3 Plan
of Principal Repayment


The plan
of principal repayment is described as below:


6.3.1
Date:    March 30, 2008     Amount of Repayment:    RMB10
million.


6.3.1
Date:    March 30, 2009     Amount of Repayment:    RMB10
million.


6.3.1
Date:    March 30, 2010     Amount of Repayment:    RMB10
million.





6.4  Mode
of Repayment


The borrower shall deposit a full amount of current loan payable in
the lender’s account prior to the date of repayment under this Contract, and
have it paid back automatically, or the Borrower shall transfer the money from
other account to the lender’s account at the date of repayment as agreed in this
Contract. Where the borrower fails to pay back the loan on time, the lender is
entitled to collect the money from other accounts opened within the system of
China Construction Bank.





6.5
Repayment ahead of Schedule


6.5.1 The borrower just needs to inform the lender in advance when he
intends to pay the interest ahead of schedule.


6.5.2 If
the borrower intends to pay back the principal ahead of schedule, he shall
summit a written application to the lender30business days in
advance, and then pay back part of or the entire principal under the lender’s
consent.


If the borrower pays back the principal ahead of schedule, the interest
shall be calculated according to the actual using days of the loan and the loan
interest rate as agreed in this Contract.





If the
Borrower pays back the loan by installments, for example, paying back part of
principal ahead of schedule, the repayment order shall be contrary to the
repayment schedule. The rest loan still follows the loan interest rate as agreed
in this Contract except for the repayment ahead of schedule.





7.
Loan Guaranty


The loan
under this Contract shall be secured by mortgage.





8.
Borrower’s Rights and Obligations





8.1 The
Rights of Borrower


8.1.1 The
borrower is entitled to obtain the loan released by the lender under this
Contract.


8.1.2 The
borrower is entitled to use the loan pursuant to this Contract;


8.1.3 On
condition that the borrower meets the requirements of the lender, he is entitled
to apply to extend the loan term;


8.1.4.
The borrower is entitled to ask the lender to keep a secret for its financial
stations and commercial information regarding to manufacturing and operation,
except for those information required by laws and regulations.





8.2 The
Obligations of Borrower


8.2.1
Shall provide the lender with relevant material regarding to financial
accounting data and conditions of manufacturing and operation, including but not
limited, the Balance Sheet and Income Statement of last quarter within 20 days in the first
month of each quarter, and provide the annual Cash Flow Statement by the end of
the year. The borrower shall be responsible for the authenticity, completeness
and validity of those material provided.


8.2.2 The
borrower shall use the loan according to the agreed purpose of the loan under
this Contract, and may not embezzle the loan.


8.2.3.
The borrower shall cooperate actively with the lender’s review and supervision
on its conditions of manufacturing and operation, the financial activities and
the loan use under this Contract.


8.2.4.
The borrower shall pay back the principal and interests on time pursuant to this
Contract.





8.2.5.
The borrower and its investors may not withdraw or transfer the funds for the
purpose of evading the debts.


8.2.6.
Before the full repayment of the principal and interest, the borrower may not
use the asset generated from the loan under this Contract to provide guaranty
for the third person without approval of the lender.


8.2.7.
During the validity period of this Contract, if the borrower intends to provide
guaranty for other person’s debts, which would affect its ability of paying back
the loan under this Contract, requiring obtaining a written approval from the
lender in advance.


8.2.8. If the guarantor under this contract has the conditions like
stopping operation, closure of business, cancel of registration, revocation of
license, bankruptcy and loss in operation, resulting in the loss of part of or
the whole guaranteeing ability related to this loan, or the worth of the
mortgage under this Contract decreases or impairs, the borrower shall provide
other guaranty of mortgage which is accepted by the lender.


8.2.9. During the validity period of this Contract, should any changes
occur in the corporate name, legal representative, address, scope of business,
registered capital and other matters, the borrower shall inform the lender in
time.


8.2.10.
During the validity period of this Contract, should any activities occur to the
borrower, such as contracting, leasing, shareholding reform, jointing operation,
merging, separating, jointing venture, applying for stopping operation for
correction, applying for dissolving or applying for bankrupting that could
sufficiently affect the realization of creditor’s rights by the lender, the
borrower shall inform the lender in written30days in advance
and obtain the approval. Simultaneously, the borrower shall commit the
obligations of loan repayment and guaranty.


8.2.11. During the validity period of this Contract, should any condition
occur to the borrower, such as stop operation, closure of business, cancel of
registration, revocation of license, or the legal representative or the main
leader violates the laws or involves in significant lawsuit or arbitration, or
the operation suffers significant difficulties or the financial condition
deteriorates, which could result in material adverse impact on the borrower’s
ability of loan repayment under this Contract, the borrower shall inform the
lender by written immediately and shall commit the obligations of loan repayment
and guaranty.


8.2.12. The borrower shall be liable for the expenses relating to this
Contract and the expenses on legal service, insurance, assessment, registration,
custody, identification, and notarization relating to the guaranty under this
Contract.





9.
Lender’s Rights and Obligations


9.1
Rights of the Lender


9.1.1.
The lender is entitled to have knowledge of borrower’s manufacturing, operation
and financial activities, requesting provide of relevant material regarding to
the planning and statistics, and financial statements.


9.1.2.
The lender is entitled to collect money in any currency from the borrower’s
account opened within the system of China Construction Bank for any accounts
payable to the lender under this Contract.





9.2
Obligations of Lender


9.2.1 The
lender shall release the loan under this Contract, excluding the delay caused by
the borrower or other reasons.


9.2.2.
The lender shall keep a secret for the borrower in such areas as financial
information and production operation, except for those information required by
laws and regulations.





10.
Liabilities for Breach of Contract and Remedial Measures of Impact on Creditor's
Rights





10.1
Conditions of Breach of Contract


10.1.1
Borrower’s Breach of Contract.


10.1.1.1. Didn’t provide the accurate, complete and valid
materials regarding to financial accounting, manufacturing and operation and
other matters as per the requirements of lender.


10.1.1.2.
Didn’t use the loan according to purpose of loan under this
Contract.


10.1.1.3.
Didn’t pay back the principal and interests of the loan on time.


10.1.1.4.
Refuse to or prevent the lender from supervising the condition of loan
use.


10.1.1.5.
Transfer the assets or withdraw the funds for purpose of evading
debts.


10.1.1.6.
Fail in the repayment of debts on due resulting from the deterioration of
operation or financial stations, or be involved in or ready to be involved in
material litigation, arbitration or other legal disputes, which in the lender’s
consideration could or already affect or harm its interest under this
Contract.


10.1.1.7.
Other debts owed by the borrower that could affect or already affected the
performance of its obligations under this Contract.


10.1.1.8.
Fail to perform other debts on due to the Construction Bank.


10.1.1.9.
During the validity period of this Contract, the activities of business
operation mode or mechanism transformation performed by the borrower, such as
contracting, leasing, jointing operation, merging, separating, jointing venture
and shareholding reform, which in the lender’s consideration could or already
affect or harm its interest under this Contract.


10.1.1.10.
Other conditions that could sufficiently affect the realization of creditor’s
right in the lender’s consideration.


10.1.1.11.
Violate other obligations as agreed in this Contract.





10.1.2 Should any of following conditions incurred to the guarantor, and
the borrower fails to provide a new guaranty pursuant to the requirements of the
lender, the borrower shall be deemed as default:


10.1.2.1. Activities such as contracting, leasing, merging,
jointing venture, separating, jointing operation, shareholding reform,
bankrupting or dissolving occur to the guarantor, which could sufficiently
affect its joint liability for guaranty.


10.1.2.2. The guarantor provides a guaranty that exceeds its
affordability to the third person.





10.1.2.3. The guarantor has lost or may loss its
guaranteeing capability.


10.1.2.4. Other conditions of breach of contract committed by the
guarantor.





10.1.3. Should any of following conditions incurred to the mortgagor, and
the borrower fails to provide a new guaranty pursuant to the requirements of the
lender, the borrower shall be deemed as default:


10.1.3.1. The mortgagor fails to effect property
insurance as per the requirements of the lender, or fails to deal with the
insurance indemnity pursuant to the Mortgage Contract when an insured accident
happened.


10.1.3.2. The collateral was damaged, lost or its value was
reduced resulting from the activity of the third person, and the mortgagor fails
to deal with the insurance indemnity as per the provisions of Mortgaged
Contract.


10.1.3.3. The mortgagor grants, transfers, rents,
remortgages, moves the collateral or disposes the collateral in other methods
without obtaining the written approval from the lender.


10.1.3.4. The mortgagor disposes the collateral under consent of the lender,
however, it fails to deal with the proceeds from collateral disposing as per the
provisions of Mortgage Contract.


10.1.3.5. The collateral was damaged, lost or its value was reduced, which could
sufficiently affect the repayment of debts under this Contract, however, the
mortgagor fails to resume the value of collateral in time, or fails to provide
other guaranty that could be accepted by the lender.


10.1.3.6. Other conditions of breach of contract committed by the
mortgagor.





10.1.4.
Should any of following conditions incurred to the pledgor, and the borrower
fails to provide a new guaranty pursuant to the requirements of the lender, the
borrower shall be deemed as default:


10.1.4.1.
The pledgor fails to effect the pledged property insurance as per the
requirements of the lender, or fails to deal with the insurance indemnity
pursuant to the Pledge Contract when an insured accident happened.


10.1.4.2. The pledged property was damaged, lost or its value was
reduced resulting from the activity of the third person, and the pledgor fails
to deal with the insurance indemnity as per the provisions of Pledge
Contract.


10.1.4.3.
The pledgor disposes the pledged property under consent of the lender, however,
it fails to deal with the proceeds from pledged property disposing as per the
provisions of Pledge Contract.


10.1.4.4.
The pledged property was damaged, lost or its value was reduced, which could
sufficiently affect the repayment of debts under this Contract, however, the
pledgor fails to resume the value of pledged property in time, or fails to
provide other guaranty that could be accepted by the lender.


10.1.4.5.
Other conditions of breach of contract committed by the
pledgor.





10.1.5.
Where the Guaranty Contract or other methods of Guaranty has not take effect,
was invalid or has been cancelled, or the guarantor lost part or all of its
guaranteeing capability or refused to perform its obligations of guaranty, and
the borrower fails to provide a new guaranty as per the requirements of the
lender, the borrower shall be deemed as default.





10.2.
Remedies for Breach of Contract


When the events of default as above mentioned happened, the lender
is entitled to exercise the following right or rights:


10.2.1. Stop releasing the loan and declare that the loan is due
immediately, requesting the borrower to pay back all the principal, interest and
expenses for those debts due or undue under this Contract.


10.2.2. Collect the liquidated damages from the borrower at a rate
of 6.84375‰
based on the principal of loan.


10.2.3.
Where the borrower fails to use the loan as stipulated in this Contract, for the
part of loan that has been embezzled, the interest and compound interest will be
collected by the penalty interest rate and the interest settlement method as
agreed in this Contract from the day when the borrower fails to use the loan as
agreed until the day when the principal and interest have been paid
off.


10.2.4. Before the term of loan expires, for the interest unpaid in
stipulated time, the compound interest will be collected from the borrower as
per the loan interest rate and method of interest settlement under provision 4
of this Contract.


10.2.5. When the term of loan expires and the borrower fails to pay
off the principal and interest (including part or all of those principal and
interest that have been declared due ahead of schedule by the lender) in time,
the interest and compound interest will be collected by the penalty interest
rate and the interest settlement method as agreed in this Contract from the day
when the borrower fails to use the loan as agreed until the day when the
principal and interest have been paid off.


10.2.6. Collect money of any currency from the borrower’s accounts
opened within the system of China Construction Bank.


10.2.7. Require the borrower to provide a new guaranty that could be
accepted by the lender for all the debts under this Contract.


10.2.8. Exercise the guaranty right.


10.2.9. Terminate this Contract.





11.
Other Agreements


None.





12.
Resolution of Disputes


Any
dispute arising from this Contract shall be resolved by both parties through
friendly discussion, or


12.1
Shall be resolved by litigation which falls within the jurisdiction of People’s
Court in the lender’s place of residence or by arbitration.


12.2
During the course of the litigation or arbitration, this Contract shall be
performed except for the part under dispute.





13.
Effect of the Contract


This
contract comes into force immediately after the date of signing or sealing by
both parties or by their authorized agents.





14. This
Contract shall be executed in6 original
copies.





15.
Recital Clause


15.1. The borrower has a clear knowledge of the business scope and
authority scope of the lender.


15.2. The borrower has read all provisions of this Contract. The lender has made
explanations for corresponding provisions as per the requirement of the
borrower. The borrower has already had a complete and accurate understanding to
the meaning of all provisions under this Contract as well as corresponding legal
consequences.


15.3. The borrower is entitled to sign this Contract.





Borrower:
Kunming Shenghuo Pharmaceutical (group) Co., Ltd.


Legal
Representative: Guihua Lan





Lender:
China Construction Bank, Kunming Heping Branch


Person-in-charge:
Hongbo Wang





Date:
March 30, 2007





Notary
      Certificate


(2007)
      Yun Kun Zhen Zheng Zi No.:6768


Applicant:


Borrower:Kunming Shenghuo
Pharmaceutical (group) Co., Ltd.


Place of residence: No.2 Jing
You Road, Kunming National Economy and


Technology
Developing District


Legal representative: Guihua
Lan


Business License Registration No.:Qi He Dian Kun Zong Zi No. 001072




Lender:China Construction
Bank, Kunming Heping Branch


Place of Residence: No.328 South Ring Road,
Kunming City


Person-in-charge: Hongbo
Wang


Notarization: The Loan
Contract


Both
parties agree on the notarization application for the above mentioned Contract on March
20, 2007.


We hereby
prove that both parties have signed the above mentioned Loan Contract upon
consensus. The borrower is a qualified entity to sign this Contract while
the lender is a qualified Financial institution engaging in RMB loan
business and its governor is entitled to sign this Contract on behalf of
his bank.





According
to this Contract, the lender will provide the borrower with a loan of RMB30
million, in a term of three years. Specific provisions such as Type and
Amount of Loan, Term of Loan, Way of Payment, Guaranty of Loan, Rights and
Obligations of Both Parties, Liability for Breach of Contract have been
clarified in the above mentioned Loan Contract.




Based
upon the above mentioned facts, we hereby certify that the above Loan Contract
is dated March 30, 2007, and is entered into at Kunming City, Yunnan Province by
and among Hongbo Wang, the governor of China Construction Bank, Kunming Heping
Branch and Guihua Lan, the legal representative of Kunming Shenghuo
Pharmaceutical (group) Co., Ltd. This Contract entered into by both parties is
in compliance with Article 55 of The General Principles of the Civil Law of the
People’s Republic of China; the signatures and seals of both parties are found
to be authentic; the contents of this Contract are in compliance with
regulations of The Contract Law of the People’s Republic of China, and The
Guaranty Law of the People’s Republic of China, respectively.





Issued
      by:Juming
      FengZhenyuan
      Public Notary OfficeKunming
      City, Yunnan Province, P.R.C.Date:
      April 5, 2007