China
Construction Bank




Mortgage
Contract in Maximum Amount




Contract No.:
61613699920070000001




Mortgagor(Party A):Kunming Shenghuo
Pharmaceutical (group) Co., Ltd




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




Legal Representative:Guihua
Lan




Fax:Telephone:
+86-871-7282608





Mortgagee (Party B):China Construction Bank,
Kunming Heping Branch




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




Person- in-charge: Hongbo
Wang




Fax:                  Telephone:
+86-871-3512800





In order
to ensure the realization of the Party B’s rights, Party A would like to provide
the maximum mortgage for the loan entered into by and between the two
parties. Accordance with relevant laws and regulations, the two parties
agree to enter into this contract and the two parties should comply with this
contract together.




Item
1  Collateral




Party A
uses the assets listed in the “Collateral List” in the Item 16 under this
contract as mortgage.





Party A
must guarantee its ownership and the right of disposition on the
Collateral.




Party A
guarantees that there are no conditions such as dispute on the ownership,
attachment and distrain and so on.




Item
2 The Guaranteed Creditor’s Right




(1) The
guaranteed creditor’s right refers to the a series of claims caused due to Party
B’s continuously issuing loan to Party A from March 30, 2007 to March 30, 2010,
which has the maximum amount of RMB 60,539,500. If Party A fails to fulfill the
guaranteeing obligation under this contract, the maximum amount shall be reduced
according to the fulfilled amount.





(2) Any
time during the period set forth above, if balance of the remaining outstanding
claim doesn’t exceed the maximum amount, Party B can issue loan to Party B
continuously and circularly. Party A should provide mortgage guaranty for every
claim within this maximum amount, on matter the times and the
amount.




The
outstanding claims includes the loan principal, interest (compound interest and
penalty), liquidated damages, compensation and other fees, including but not
limited, legal fees, arbitration fees, fees for protect assets, traveling fees,
fees for executing, assessment fees and auction fees.




(3) If
Party A fails to fulfill the obligation according to the contract, Party B has
the right to require Party A to take the responsibility of guaranty within the
scope of its guaranty, no matter Party B whether has other guarantee upon the
claims (including but not limited, guaranty, mortgage, pledge, insurance letter
and standby L/C, etc.) under the major contract.





(4)
During the period agreed in Item 1, the series of the contracts, agreements and
other legal documents related to the claims and obligation relationship between
Party A and Party B consist of the major contract of this contract.





Item
3  The Duration Term of Mortgaged right


The
duration term of the mortgaged right exists until two years later after the
expiration of the time for action of the guaranteed claims.


Item
4  Execution and Change of the Guaranteed Principal
Contract




The
Amount, Term, Interest Rate and Purpose of the Loan were determined by Party B
and the debtor in the Principal Contract.




Party A
acknowledges, if Party B enters into the Principal Contract with debtor or Party
B and debtor amend the contract together, they don’t need to inform Party A in
advance. Party A’s liability for guaranty may not be exempted
therefore.




Party B
doesn’t need to inform Party A in advance if the interest of the Principal
Contract is changed during the duration period of the mortgaged right. Party A
still shall be liable for the mortgaged right.




Item
5  The Independence of the Validity of Contract




The
validity of this Contract is independent from the Principal Contract, and if the
whole or part of the Principal Contract is invalid, the validity of this
Contract will not be affected.





Item
6  Reservation of the collateral




At the
duration term of the mortgaged right, Party A is liable for reserving the
collateral well, keeping the collateral from damage and accepting Party B’s
review. If the collateral impairs, losses, or the value reduced significantly,
Party A shall inform Party B in time and provide other guaranty with the equal
value to the reduced part of value within 5 business
days.




Item
7 Insurance of the collateral




At the
duration term of the mortgaged right, before the claims are completely repaid,
Party A shall buy property insurance for the collateral according to Party
B’s request on the insurance and amount. If the guaranteed claims are not
completely repaid, Party A shall extent the term of the insurance.




The
original insurance policy should be kept by Party B At the duration term of the
mortgaged right.




Party A
shall designate Party B as the first beneficiary in the insurance policy. Party
A shall remit the compensation of the insurance into the account of Party B once
insurance incident happens.




As to the
insurance compensation, Party A agrees that Party B is entitled to dispose it as
per the ways below and assist to complete related procedures:




(1) Pay
off or pay the loan principal, interests and related costs under the Principal
Contract ahead of schedule.




(2)
Change the compensation into fixed deposit and the receipt of the deposit will
be used for pledge.




(3) Use
it for collateral repairing in order to resume the value of
collateral.




(4) Make
escrow to the third person designated by Party B.




(5) Party
A could dispose the insurance compensation at it will after it has provided with
Party B a new guaranty as per the requirement.





Item
8  Compensation for Damages of Third Person




During
the period of the existence of mortgaged right, where the value of collateral
was reduced resulting from the activities of third person, the compensation for
damages shall be deposited in the account designated by Party B. As to the
the compensation for damages, Party A agrees that Party B is entitled to dispose
it as per the ways below and assist to complete related procedures:




(1) Pay
off or pay the loan principal, interests and related costs under the Principal
Contract ahead of schedule.




(2)
Change the compensation into fixed deposit and the receipt of the deposit will
be used for pledge.




(3) Use
it for collateral repairing in order to resume the value of
collateral.




(4) Make
escrow to the third person designated by Party B.




(5) Party
A could dispose the compensation for damages at it will after it has provided
with Party B a new guaranty as per the requirement.




At the
duration term of mortgaged right, if the value of collateral fails to pay off
the principal and interest of the debt as well as related expenses under the
Principal Contract resulting from the activities of third person, Party A shall
provide a new guaranty acceptable to Party B. The collateral value that was not
reduced remains its status as the guaranty of creditor’s
right.





Item
9  Disposition of Collateral




1. At the
duration term of mortgaged right, Party A may not grant, transfer, rent,
remortgage, remove the collateral or dispose it by other ways without the
written approval of Party B.




2. At
the duration term of mortgaged right, Party A shall obtain the written approval
from Party A before it disposes the collateral, and Party A agrees that Party B
is entitled to deal with the proceeds from collatearl disposing by following
methods:




(1) Pay
off or pay the loan principal, interests and related costs under the Principal
Contract ahead of schedule.




(2)
Change the compensation into fixed deposit and the receipt of the deposit will
be used for pledge.




(3) Use
it for collateral repairing in order to resume the value of
collateral.




(4) Make
escrow to the third person designated by Party B.




(5) Party
A could dispose the proceeds at it will after it has provided with Party B a new
guaranty as per the requirement.




Item
10 Realization of Mortgaged Right




Under any
of the following circumstances, Party B is entitled to dispose the
collateral:




1. Party
B is not paid at the maturity of the whole of part of the principal or interest
under the Principal Contract.




2. Other
conditions that could realize the creditor’s right ahead of schedule as agreed
in the Principal Contract.




Item
11  Breach of Contract and the Treatment




At the
duration term of mortgaged right, if Party A breachs the agreement in Item 1, 6,
7, 8, and 9, Party B is entitled to request Party A to rectify the breaches in
spicified period, provide corresponding guaranty, make compensation for damages,
it is also entitled to dispose the collateal in advance.





Party A
agrees that Party B is entitled to deal with the proceeds from collateral
disposing by following methods:




(1) Pay
off or pay the loan principal, interests and related costs under the Principal
Contract ahead of schedule.




(2)
Change the compensation into fixed deposit and the receipt of the deposit will
be used for pledge.




(3) Make
escrow to the third person designated by Party B.




(4) Party
A could dispose the proceeds at it will after it has provided with Party B a new
guaranty as per the requirement.




Item
12  Registration and Cancellation of Collateral




Where the
collateral needs to be registered according to law, both partites shall register
with relevant authorities following the exectution of this Contract. Party A
shall deliver all of those certificates, mortgage registration document
associated with the collateral to Party B for custody at the date when this
Contract is executed.




After all
of the debts under the Principal Contract and this Contract have been paid off,
Party B shall assist Party B in the mortgage registration cancellation in
time.




Item
13  Liability for Expenses




Party A
shall be liable for incurred costs in the course of collateral appraisement,
evaluation, storage, registration, notarization and escrow.





Item
14  Other Agreements




1. The
mortgagor has had a full understanding of the interest rate risk, such as the
Principal Contract adopts the floating interest rate and the mortgagor is
willing to bear additional responsibilites of guaranty resulting from the float
of interest rate.




Item
15  Resolution of Disputes




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




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




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




Item
16  Collateral List




1. Name
of collateral: State-owned land use right




Certificate
No.of land-use right: Kun Guo Yong (2006) No. 00207




Location:
No.9-4, Kunming National Economy and Technology Developing District




Estimated
value of collateral: RMB12.1093 million




2. Name
of collateral: Ownership of housing




Certificate
No.of land-use right: Kun Fang Quan Zheng Zi No. 200610657




Location:
No.9-4, Kunming National Economy and Technology Developing District




Estimated
value of collateral: RMB33.3386 million




3. Name
of collateral: Machines and equipments




Estimated
value of collateral: RMB40.3959 million





Item 17 This Contract will take
into force after all of the following conditions have been matched:




1.
This Contract is executed by both parties or their authorative agents with
signatures and seals.




2.
The collaterals included in the Collateral List shall have been registered with
relevant authorities according to law.




Item 18This
Contract shall be executed in 7 original copies.




Item
19  Recital Clause




1. Party A has a clear knowledge of the business scope and authority scope
of Party B.




2. Party A has read all provisions of this Contract. Party B has made
explanations for corresponding provisions as per the requirement of Party A.
Party A has already had a complete and accurate understanding to the meaning of
all provisions under this Contract as well as corresponding legal
consequences.




3. Party A is entitled to sign this Contract.





Party A
(seal): Kunming Shenghuo Pharmaceutical (group) Co., Ltd.




Legal
Representative: Guihua Lan





Party B
(seal): China Construction Bank, Kunming Heping Branch




Person-in-charge:
Hongbo Wang




Date:
March 30 , 2007





Notary
      Certificate


(2007)
      Yun Kun Zhen Zheng Zi
No.:6770


Applicant:




Mortgagor (Party A):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
RegistrationNo.:Qi He Dian Kun Zong Zi No. 001072





Mortgagee (Party B):China
Construction Bank, Kunming Heping Branch




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




Person-in-charge: Hongbo
Wang





Notarization: The Mortgage
Contract in Maximum Amount


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


We hereby
prove that both parties have signed the above mentioned Mortgage Contract
upon consensus. Party A is a qualified entity to sign this Contract while
Party B is a
qualified financial institution engaging in RMB loan business and its
governor is
entitled to sign this Contract on behalf of his bank.


This
Mortgage Contract is entered into by those two parties according to relevant
laws and regulations of China for purpose of ensuring that Kunming Shenghuo
Pharmaceutical (group) Co., Ltd. will repay the loan under the Loan Contract as
above mentioned. Party B accepts the guaranty provided by Party A in its maximum
amount of RMB60.5395 million, with a term dating from March 30, 2007 to March
30, 2010. This Contract is secured by: 1. the land use right (Certificate No:
Kun Guo Yong (2006) 00207)for the land located in No.9-4, Kunming National
Economy and Technology Developing Zone, with an estimated value of RMB79 million
and its interest; 2. the housing ownership (Certificate No.:Kun Fang Quan Zheng
Zi 200610657) for the land located in No.9-4, Kunming National Economy and
Technology Developing Zone, with an estimated value of RMB22.8 million and its
interes; 3. machines and equipments, with an estimated value of RMB24.3 million
and its interest. Upon examination, Party B agrees to accept the guaranty of
mortgage offered by Party B. Specific provisions such as Amount of Guaranty,
Term of Guaranty, Way of Payment, Rights and Obligations of Both Parties,
Liability for Breach of Contract have been clarified therein.




Based
upon the above mentioned facts, we hereby certify that the above Mortgage
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.





Pursuant
to Article 41 of The Guaranty Law of the People’s Republic of China, where the
real estate involved in this Contract is mortgaged, the collateral is
established from the date of registration with the local
authorities.





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