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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    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.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    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.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    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)