fs12010ex10xvi_chinabct.htm


     

    
      Exhibit
10.16

      


       

      Translation
of Individual Loan/ Security Contract

      


      Industrial
and Commercial Bank of China Guangxi Branch

      


      No. B:
Gejing Zi Liuzhou Branch Longcheng Sub-branch Year 2007 No. 5

      


      


      


      


      


      


      


      Borrower:
Jiang
Youru                                                                                                 

      
         

        Lender:
Liuzhou City Longcheng
Sub-branch of Industrial and Commercial Bank of China

      

      


      
        Mortgagor:
Guigang Sub-station of
Guangxi Liuzhou Medicinal Materials Wholesale Station

      

      


      
        Pledgor:                                                                                                                         
   

      

      


      
        Guarantor:                                                                                                                    
     

      

      


      


      


      


       

       

      
 

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      


      


      


      


      


      


      Special
Reminder: Prior to signing this contract, the Borrower and the security provider
shall carefully read all provisions of this contract; please pay special
attention to the part in black letter. If you have any questions or any part
that you do not understand, please promptly consult the Lender and
professionals. Once this contract is executed, it is deemed that each party
understands and agrees all provisions of this contract.

      


      Each
party of this contract, in accordance with relevant laws and regulations, on the
equal and voluntary basis, in order to stipulating obligations, hereby executes
this contract and agrees to comply with the provision of this
contract.

      


      Terms
of Loan

      


      Article 1
Type and Amount of Loan

      The
Lender, according to the application of the Borrower, agrees to issue
category       E      oan listed as below,
the amount is RMB1,800,000. (Amount in
words: RMB One Million Eight Hundred Thousand). (In the event of any discrepancy
between the word and Arabic numerals amount, the word shall
prevail).

      A.  Individual
Automobile Consumptive Loan.

      B.   Individual
Comprehensive Consumptive Loan

      C.   Individual
Pledge Loan

      D.   Individual
Credit Loan

      E.   Individual
Business Loan

      F.   General
Commercial Student Loan

      G.  Other:      Blank                                            

      
Article 2
Purpose of Loan

      The Loan
hereunder shall be used for the business and
turnover. Without written consent of the Lender, the Borrower shall not
use the loan for the other purposes. The Lender has the right to supervise the
use of loan.

      


      Article 3
Term of Loan

      The term
of loan hereunder is
96 months. The actual launch date and the maturity date shall be based on
the borrowing certificate. The borrowing certificate shall be a part of this
contract, and has the same legal effect.

      


       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

       

      Article 4
Interest Rate

       

      
        	
                4.1

              	
                The
      interest rate of the Contract is calculated at upwards/ 30%
      from the benchmark interest rate of the corresponding grade of the
      People’s Bank of China, accordingly the annual interest rate is 8.89%, and
      according to the formula as below:

              


      

       

      Monthly
Interest Rate = Annual Interest Rate/12, Daily Interest Rate = Annual Interest
Rate/360.

       

      
        	
                4.2

              	
                In
      case the People’s Bank of China adjusts the benchmark interest rate and
      such adjustment is applicable to the loan hereunder, the interest rate
      hereunder shall apply the new benchmark interest, and the interest rate of
      loan hereunder shall be re-calculated according to the terms set forth in
      Article 4.1; in case the benchmark interest rate is adjusted after the
      loan is issued, the interest rate of loan is calculated in accordance with
      category A set forth
      below:

              


      

       

      
        	
                 
      

              	
                A.

              	
                In
      the event the term of loan is (or less than) one year, the interest rate
      stipulated in this contract shall prevail for loans with a life; in the
      event the term of loan is longer than one year, commencing January 1 of
      the next year after the date the benchmark interest rate was adjusted, the
      interest rate hereunder shall be based on the adjusted benchmark rate (in
      case the benchmark interest rate is adjusted twice or more than twice
      within one calendar year, the interest rate hereunder shall be base on the
      last adjusted benchmark rate) and the interest floating percentage set
      forth in Article 4.1, and the new interest rate shall be
      applied;

              


      

       

      
        
          	
                   
      

                	
                  B.

                	
                  The
      interest rate shall not be adjusted within the term of
    loan;

                


        

         

      

      
        
          	
                   
      

                	
                  C.

                	
                  Other:     Blank                          
         

                


        

         

      

      Article 5
Issuance of Loan

       

      
        	
                5.1

              	
                The
      condition precedent for the Lender to issue or continue to issue the loan
      is: the security hereunder has effectuated and continues to be effective
      (excluding the credit loan), and the Borrower does not breach this
      contract.

              


      

       

      
        	
                5.2

              	
                The
      Borrower authorizes the Lender to issue the whole amount of loan into the
      account listed below. The interest of loan shall be calculated commencing
      the date of the actual date of
issuance.

              


      

       

      Account
Name: Jiang
Youru                                                                                  


       

      Account
No.: 2105454101207825904                                                                    
  

       

      Bank:
Longcheng Sub-branch
of Industrial and Commercial Bank of
China     

       

      Article 6
Repayment:

       

      
        Through
consultation of both parties, the Borrower shall repay the loan in
category  listed
below:

      

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

       

      A.     To
repay the same amount of principal and interest monthly (the interest calculated
monthly);

       

      
        	Monthly Amount of Principal and Interest Repayment =
      	Principal of Loan x
      Monthly Interest Rate x (1+Monthly Interest Rate)Mo. For
      Repayment
	 	(1+Monthly Interest Rate)Mo. For Repayment   - 1	 


      

       

      B.     To
repay the same amount of principal monthly (the interest calculated
monthly);

       

      
        
          	Monthly Amount of Principal and Interest Repayment
      =	Principal of Loan 	+ (Principal of Loan – Repaid Principal of Loan) x
      Monthly Interest Rate
	 	Months of Term of Loan	 


        

         

      

      C.     Repay
the same amount of principal monthly (the interest calculated
daily);

      
      

       

      
        	Monthly Amount of Principal and Interest Repayment
      =	      
                Principal of Loan

              	+ (Principal of Loan – Repaid Principal of Loan) x
      Daily Interest Rate x Actual days
	 	 Months of Term of Loan	 


      

       

      D.     One-off
repayment when due;

       

      E.     To
repay monthly, in accordance with Blank    
    (month/ three month/ six month/
one-off).

       

      F.     Other:
Blank                           
         

       

      
        	
                6.2

              	
                The
      Borrower is entitled a grace period. The grace period is 12 months,
      commencing the actual date of issuing loan. Within the grace period, the
      Borrower shall pay the interest monthly, and not repay the principal of
      loan; after the expiration of the grace period, the Borrower shall repay
      the principal and interest monthly.

              


      

       

      
        	
                6.3

              	
                The
      repayment date of every installment commences on the corresponding date of
      every installment of the next month after the actual date of issuance of
      loan; in the event there is no corresponding date, the repayment date
      shall be the last day of such installment. The repayment date of the last
      installment is the maturity date of
loan.

              


      

       

      
        	
                6.4

              	
                The
      Borrower designates a personal account opened with the Lender listed below
      to be the account for repayment:

              


      

       

      Account
Name: Jiang
Youru                                                                                                                          

       

      Account
No.: 2105454101207825904                                                                                                                                    

       

      Bank:
Longcheng Sub-branch
of Industrial and Commercial Bank of
China                                                  

       

      
        	
                6.5

              	
                Prior
      to the repayment date of every installment, the Borrower shall deposit
      full amount of the principal and interest of loan that shall be repaid,
      and authorize the Lender to withdraw from the account for repayment on the
      repayment date of every installment; in the event the Borrower has
      principal and interest of loan or other expenses that have not been
      repaid, the Borrower shall timely deposit the aforesaid into the account
      for repayment, and authorize the Lender to withdraw at any time. In the
      event the amount in the account for repayment is not enough for the
      payment due hereunder, the Lender shall withdraw in the sequence of
      expenses, interests and then the
principal.

              


      

       

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

       

      
        	
                6.6

              	
                In
      the event the account for repayment is reported loss, frozen, ceased
      paying, closed, or the Borrower needs to change the account for repayment,
      the Borrower shall conduct a procedure of change of account for repayment
      with the Lender. Prior to the effectuation of the change of account for
      repayment, if the original account for repayment has no adequate amounts
      in it for withdrawal, the Borrower shall repay the loan at the counter of
      the Lender. In case the Borrower does not conduct the procedure of change
      of account for repayment, or repays the loan at the counter of the Lender
      in time, and does not repay the adequate amount of the principal and
      interest due and other expenses, the Borrower shall be liable for default
      liabilities.

              


      

       

      Article 7
Early Repayment

       

      
        	
                7.1

              	
                In
      the event the Borrower earlier repays the loan in whole or in part, it
      shall submit a 15-day written notice prior to the proposed earlier
      repayment date.

              


      

       

      
        	
                7.2

              	
                The
      Borrower shall fulfill the following conditions for the earlier
      repayment:

              


      

       

      
        
          	
                   
      

                	
                  A.

                	
                        
                    The
      Borrower shall pay the Lender the indemnification in accordance with the
      standard: Indemnification for
      earlier repayment = (Every time) Actual amount of earlier repayment x
      Monthly interest
rate.

                  

                


        

         

      

      
        	
                 
      

              	
                B.

              	
                In
      the event the earlier repayment is partial repayment, the amount of
      repayment shall not be less than: RMB10,000.

              	 


      

       

      
        	
                 
      

              	
                C.

              	
                When
      the Borrower earlier repays the loan, no payment due but not yet being
      repaid shall exist, including but not limited to the principal, interest,
      punitive interest, default penalty, indemnification and other
      expense.

              


      

       

      
        
          	
                   
      

                	
                  C.

                	
                  Blank                                            
      

                


        

                                                                                                                                            

      

      
        	
                7.3

              	
                The
      interest of the earlier repayment shall be calculated based on the agreed
      interest rate set forth in Article 4 and the actual days using the loan;
      if the Borrower earlier repays the full amount of the principal of loan,
      it shall repay full amount of
interest.

              


      

                                                                                                                                     

      
        
          	
                  7.4

                	
                        
                    In
      the event the term of loan changes due to the earlier repayment, the
      interest of loan that is not repaid shall be based on category A      listed
      below

                  

                


        

         

      

      
        
          	
                   
      

                	
                  A.

                	
                  To
      be calculated in accordance with the original interest rate of the
      loan;

                


        

         

      

      
        	
                 
      

              	
                B.

              	
                Commencing
      the date the term of loan is shortened, the interest rate shall be
      calculated in accordance with the benchmark interest rate corresponding to
      the actual term after being adjusted, and the floating percentage set
      forth in Article 4.1, provided that the interest already received before
      the term is shortened shall not be retroactively
  adjusted.

              


      

       

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

       

       

      Article 8
Extension of Term

       

      In the
event the Borrower cannot repay the loan hereunder on schedule and needs to
extend the term of loan, it shall submit to the Lender a 30-day written notice
prior to the maturity date of loan. After the Lender reviews and agrees the
extension of term, both parties shall enter into a extension agreement. If the
Lender does not agree to extend the term, the Borrower shall still repay the
principal and interest of loan in accordance with the contract.

       

      Article 9
Punitive Interest

       

      
        	
                9.1

              	
                In
      the event the Borrower does not repay the loan pursuant to the agreed date
      (including the situation that the maturity date of the loan is
      accelerated), the Lender has the right to charge a daily interest based on
      the punitive interest rate; with respect to the interest that cannot be
      paid on schedule, the Borrower shall pay a compound interest calculated
      based on the punitive interest rate. The punitive interest rate shall be
      calculated in accordance with the interest set forth in Article 4 plus
      50%.

              


      

       

      
        	
                9.2

              	
                The
      loan that the Borrower does not use in accordance with the contract, the
      Lender has the right to charge a daily interest calculated in accordance
      with the punitive interest rate; with respect to the interest that cannot
      be paid on schedule, the Borrower shall pay a compound interest calculated
      based on the punitive interest rate. The punitive interest rate shall be
      calculated in accordance with the interest set forth in Article 4 plus
      50%.

              


      

       

      
        	
                9.3

              	
                In
      the event the interest of loan is adjusted in accordance with Article 4.2,
      the punitive interest rate shall be adjusted accordingly; its circle of
      adjustment shall be consist with the adjusted circle of
      interest.

              


      

      


      Article
10 Security to Loan

      


      
        	
                10.1

              	
                Except
      for the credit loan, the security provider voluntarily provides the Lender
      with a legal and valid mortgage
      (Guarantee/ Mortgage/ Pledge) to secure the loan. The specific
      agreements shall be stipulated in the relevant terms of security
      hereunder. In the event the security of loan is a maximum security, the
      Lender and the security provider shall enter into a maximum security
      agreement; in such case the relevant security terms in this contract shall
      no longer apply.

              


      

      


      
        	
                10.2

              	
                In
      case any adverse change of the security hereunder occurs, the Borrower
      shall, as per the Lender’s request, timely provides legal and valid
      security that is acceptable to the
Lender.

              


      

      


       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

       

      Article
11 Default and Liability of Default

      


      
        	
                11.1

              	
                If
      any or several of the events set forth below occur, the Borrower
      constitutes default:

              


      

      
        	
                 
      

              	
                A.

              	
                The
      Borrower does not fully comply with or fulfill any commitment, guarantee,
      obligation or liability hereunder;

              


      

      
        
          	
                   
      

                	
                  B.

                	
                  The
      Borrower or the security provides false information or conceals material
      facts;

                


        

      

      
        
          	
                   
      

                	
                  C.

                	
                  The
      Borrower died or is declared dead, missing or is declared missing, or
      becomes a person with the limited capability or lost the civil capability,
      and has no heirs, devisees, custodians or property trustees, or his heirs,
      devisees, custodians or property trustees refuse to fulfill obligations
      hereunder on behalf of the
Borrower;

                


        

      

      
        	
                 
      

              	
                D.

              	
                The
      Borrower is involved in criminal cases, lawsuits, arbitrations, disputes,
      and the aforesaid cause adverse effects to his ability of
      repayment;

              


      

      
        	
                 
      

              	
                E.

              	
                The
      Borrower’s any other debts are not repaid when due (including being
      declared due prior to its maturity date), or the Borrower does not fulfill
      his security liability or other obligations, and has affected or mat
      affect the Borrower to fulfill his obligations
  hereunder;

              


      

      
        
          	
                   
      

                	
                  F.

                	
                  If
      the event set forth in Article 10.2 occurs, but the Borrower does not
      provide a new security acceptable to the
Lender;

                


        

      

      
        	
                 
      

              	
                G.

              	
                With
      respect to the individual business loan, the Borrower’s business entity
      refuses or does not coordinate with the Lender’s investigation, inquiry
      and examination on the Borrower’s financial condition and business
      operation;

              


      

      
        
          	
                   
      

                	
                  H.

                	
                  Other
      events affect or may affect the full repayment of the principal and
      interest of loan on schedule.

                


        

         

      

      
        	
                11.2

              	
                If
      the Borrower does not repay the full amount of principal and interest of
      loan for consecutively three months, or the aforesaid situation has
      occurred six times, or other default events occur, the Lender has the
      right to cease issuing the loan that has not been issued, declare the
      maturity date of loan accelerated, request the Borrower to earlier repay
      the whole or part of loan, and the accrued interests, punitive interest
      and other fees until the cancellation of the
  contract.

              


      

      


      
        	
                11.3

              	
                In
      the event the Borrower defaults, except as otherwise specified in Article
      11.2, the Lender has the right to adopt other measures in accordance with
      the contract and laws.

              


      

      


      Article
12 Debit

      


      
        	
                12.1

              	
                In
      the event the Borrower does not repay the principal, interest, punitive,
      default penalty, indemnification or other expenses when due (including the
      maturity date of loan is accelerated), the Lender has the right to debit a
      corresponding payments in all accounts the Borrower opened with Industrial
      and Commercial Bank of China and its branches, provided that the Lender
      shall notify the Borrower.  In the event the Borrower’s contact
      information changes and the Lender cannot notify the Borrower by phone or
      mail, the Lender may use notarized delivery and other measures acceptable
      in accordance with law to fulfill the obligation of
      notification.

              


      

       

       

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      
 

      
        	
                12.2

              	
                In
      the event the Lender debits the time deposit prior to its maturity, if the
      whole amount needs to be debited prior to the maturity, the interest shall
      be calculated in accordance with the published interest rate of the demand
      deposit on the date of debiting; if only a part of amount needs to be
      debited prior to its maturity, the interest of such part shall be
      calculated in accordance with the published interest rate of the demand
      deposit, the interest of remaining amount shall be calculated in
      accordance with the interest of the date when such time deposit was
      deposited. The loss arising from the debiting shall be assumed by the
      Borrower.

              


      

      


      Article
13 Expenses

      


      The expenses of registration,
notarization, appraisal in connection with the execution and performance of this
contract, and the legal counsel expenses, appraisal expenses, and auction
expenses that the Lender pays to exercise its rights as the Borrower and the
security provider do not fulfill their obligations in accordance with the
contract shall be assumed by the Borrower. The Lender may claim fees it
prepays for protecting its own interest on behalf of the Borrower at any time,
and charges interests in accordance with the interest rate of demand deposit,
commencing the date such fees were paid.

      


      Article
14 Joint Borrowing

      


      In the
event there are two or more persons jointly borrow money, any of the borrowers
shall comply with the obligations hereunder, and assumes the joint and several
liabilities to repay the full amount of loan. The Lender has the right to
request any of the borrowers to repay the principal and interest that has not
been repaid and other expenses that have not been paid.

      


      Terms
of Mortgage

      


      In the
event the Borrower or a third party provides a mortgage, the Mortgagor shall
comply with the terms as follows:

      


       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

       

       

      Article
15 Mortgaged Properties

      


      
        	
                15.1

              	
                The
      Mortgagor voluntarily provides the mortgage to the Lender. The mortgaged
      properties are listed in the “Mortgaged Property List”. The “Mortgaged
      Property List” as an appendix of this contract has the same legal effect
      as this contract.

              


      

      


      
        	
                15.2

              	
                The
      value of the mortgaged properties stipulated in the “Mortgaged Property
      List” shall not be the appraisal basis when the Lender disposes such
      mortgaged properties, and shall not constitute any limit to the Lender to
      exercise its mortgage right.

              


      

      


      
        	
                15.3

              	
                The
      fructus arising from the mortgaged properties, the ancillary objects and
      rights, fixtures of mortgaged properties, and the insurance compensations,
      compensations, indemnifications or other form of substitutes shall be with
      the scope when the Lender exercises its mortgage
  right.

              


      

      


      
        	
                15.4

              	
                The
      Mortgagor shall carefully retain and use the mortgaged properties, and
      guarantees the completeness of the mortgaged properties. The Lender has
      the right to examine the use and management of the mortgaged properties at
      any time. During the term of the mortgage, if the Mortgagor leases the
      mortgaged properties, it shall notify the Lender and inform the lessee the
      fact of the mortgage, and the term of the lease shall not be longer than
      the term of the loan. In the event the mortgaged properties are disposed
      with other measures, the Mortgagor shall obtain a prior written consent of
      the Lender and disclose the fact of mortgage to the purchaser and other
      relevant persons. The proceeds obtained from selling the mortgaged
      properties shall be handled in accordance with Article
    15.7.

              


      

      


      
        	
                15.5

              	
                In
      the event the mortgaged properties is or may be damaged or lost, the
      Mortgagor shall timely notify the Lender, and adopt measures to prevent
      the loss from increasing, and timely submit to the Lender the certificate
      of damage or loss issued by the competent
  authorities.

              


      

      


      
        	
                15.6

              	
                In
      the event the activities of the Mortgagor will cause the value of the
      mortgaged properties decreased, the Mortgagor shall timely cease such
      activities; if the value of mortgaged properties decreases, the Mortgagor
      shall timely restore the value of mortgaged properties, or provide the
      mortgaged properties, of which the value equals to the decreased
      value.

              


      

      


      
        	
                15.7

              	
                With
      respect to the compensations, indemnifications, insurance compensations
      the Mortgagor received and the proceeds from disposing the mortgaged
      properties, the Lender has the right to choose the following measures to
      handle them:

              


      

      
        
          	
                   
      

                	
                  A.
      To repay or earlier repay the Borrower’s debts
  hereunder;

                



      

      
        	
                 
      

              	
                B.
      To deposit them into the Lender’s designated account to secure the
      fulfillment of the Borrower’s debt
obligations;

              


      

       

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

       

      
        	
                 
      

              	
                C.
      To repair the mortgaged properties, in order to regain its
      value;

              


      

      
        	
                 
      

              	
                D.
      Other measures both parties agree.

              


      

      If the
Mortgagor or the Borrower provides a new mortgaged property that reaches the
Lender’s requirements, the Mortgagor may freely dispose the proceeds listed
above.

      


      
        	
                15.8

              	
                In
      the event the Mortgagor conceals the dispute in regard to the ownership of
      the mortgaged properties, the facts that the mortgaged properties is
      seized, attached, or has been mortgaged or leased  to a third
      party, and causes the Lender’s loss, the Mortgagor shall indemnify the
      full amount of the Lender’s loss.

              


      

      


      Article
16 Scope of Mortgage

      


      The scope
of mortgage shall include: the principal, interest, punitive interest, compound,
and default penalty, indemnification under this contract, and the expenses of
the Lender for exercising its rights under this contract, and all other expenses
shall be paid.

      


      Article
17 Registration of Mortgage

      


      
        	
                17.1

              	
                After
      the execution of this contract, the Mortgagor and the Lender shall timely
      register the mortgage with the competent authority, the mortgage
      registration certificate shall be held by the Lender before the loan is
      fully repaid; any change on the mortgage registration that requires a
      change registration to be completed, the Mortgagor and the Lender shall
      conduct a change registration.

              


      

      


      
        	
                17.2

              	
                After
      all of obligations hereunder have been fulfilled in accordance with the
      contract; the Lender shall proactively assist the Mortgagor to conduct a
      cancellation registration.

              


      

      


      Article
18 Disposition of Mortgaged properties

      


      
        	
                18.1

              	
                If
      any of the following events occurs, the Lender has the right to auction,
      sell, the mortgaged properties, and has the priority to take the proceed
      or handles such proceed in accordance with Article 15.7; or set off the
      debt the Borrower owed after the Lender negotiate with the
      Mortgagor:

              


      

      
        
          
            	
                     
      

                  	
                    A.

                  	
                          
                      The
      Borrower does not repay the debt when the loan due (including the maturity
      being
accelerated);

                    

                  


          

        

      

      
        
          
            	
                     
      

                  	
                    B.

                  	
                    If
      any of events stipulated in Article 15.6 occurs, the Mortgagor does not
      timely restore the value of mortgaged properties or provide the
      corresponding mortgaged properties, of which its value equals to the
      decreased value;

                  


          

        

      

      
        
          
            	
                     
      

                  	
                    C.

                  	
                    Other
      situation that the Lender may legally dispose the mortgaged
      properties.

                  


          

           

        

      

       

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      
 

      
        	
                18.2

              	
                If
      after repaying all debts the Borrower owed within the scope of mortgage by
      using the proceeds of disposing the mortgaged properties, and there is
      still reaming proceed, the Lender shall return the remaining proceed to
      the Mortgagor.

              


      

      


      
        	
                18.3

              	
                The
      Mortgagor shall proactively coordinate with the Lender when the Lender
      disposes the mortgaged properties. With respect to the mortgaged house of
      Mortgagor and the family member he supports, after the People’s Court
      decides that such house to be auctioned, sold or to be set off the debt,
      the Mortgagor shall empty such house within 6 months. In the event the
      Lender agrees to provide temporary housing to the Mortgagor, the Mortgagor
      shall pay the rent; the accrued rent shall be first deducted from the
      auction or sales proceed of the
house.

              


      

      


      
        	
                18.4

              	
                The
      expense for the Lender to realize its claim shall be first deducted from
      the auction or sales proceed.

              


      

      


      Terms
of Pledge

      


       In the event the
Borrower or the third party provides a pledge, the Pledgor shall comply with the
terms as follows:

      


      Article
19 Collateral

      


      
        	
                19.1 

              	
                The
      Pledgor voluntarily provides the pledge to the Lender. The collateral is
      listed in the “Collateral List”. The “Collateral List” as an appendix of
      this contract has the same legal effect as this
  contract.

              


      

      


      
        	
                19.2

              	
                The
      value of the collateral stipulated in the “Collateral List” shall not be
      the appraisal basis when the Lender disposes such collateral, and shall
      not constitute any limit to the Lender to exercise his pledge
      right.

              


      

      


      
        	
                19.3

              	
                The
      fructus arising from the collateral, and the insurance compensations,
      compensations, indemnifications or other form of substitutes shall be with
      the scope when the Lender exercises its pledge
  right.

              


      

      


      
        	
                19.4

              	
                In
      the event the value of collateral has adverse changes, the Lender has the
      right to request the Borrower or the Pledgor to make up the value to the
      collateral. The Borrower and the Pledgor shall make up the value within
      the required time frame.

              


      

       

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

       

      
        	
                19.5

              	
                In
      the event the collateral is delivered to the Lender, the Lender shall be
      obligated to carefully retain the collateral. In the event the collateral
      is lost or damaged, the Lender shall be liable for the civil liabilities.
      If the Lender is not able to carefully retain the collateral and may cause
      its loss or damage, the Pledgor may request the Lender to deposit the
      collateral or request to earlier repay the debt and the Lender shall
      return the collateral.

              


      

       

      
        	
                19.6

              	
                With
      respect to the compensations, indemnifications, insurance compensations
      the Pledgor received and the proceeds from disposing the collateral, the
      Lender has the right to dispose them in the following
      measures:

              


      

      
        
          
            	
                     
      

                  	
                    A.

                  	
                    To
      repay or earlier repay the Borrower’s debts
  hereunder;

                  


          

          
            
              
                	
                         
      

                      	
                        B.

                      	
                        To
      deposit them into the Lender’s designated account to secure the
      fulfillment of the Borrower’s debt
obligations;

                      


              

              
                
                  
                    	
                             
      

                          	
                            C.

                          	
                            To
      repair the collateral, in order to regain its
  value;

                          


                  

                  
                    
                      
                        	
                                 
      

                              	
                                D.

                              	
                                Other
      measures both parties
agree.

                              


                      

                    

                  

                

              

            

          

        

      

      In the
event the Pledgor or the Borrower provides the new collateral that reaches the
Lender’s requirements, the Pledgor may freely dispose the proceeds listed
above.

      


      Article
20 Scope of Pledge

       

      The scope
of pledge shall include: the principal, interest, punitive interest, compound,
and default penalty, indemnification under this contract, the expenses for
retaining the collateral, and for exercising the Lender’s rights under this
contract, and all other expenses shall be paid by the Borrower.

      


      Article21
Delivery and Registration

      


      
        	
                21.1

              	
                After
      the execution of the contract, the Pledgor shall deliver the collateral or
      the certificate of right to the Lender, after the Lender inspects and
      accepts the collateral or certificate of right, it shall convey the
      certificate for receipt of pledge. The fees for retaining the collateral
      shall be assumed by the Pledgor.

              


      

      


      
        	
                21.2

              	
                If
      the collateral hereunder shall be registered in accordance with laws, the
      Pledgor and the Lender shall timely conduct the procedure of pledge
      registration with the relevant registration agency; any change on the
      pledge registration that requires a change registration to be completed in
      accordance with laws, the Pledgor and the Lender shall timely conduct a
      change registration. After all of obligations hereunder have been
      fulfilled by the Borrower in accordance with the contract; the Lender
      shall proactively assist the Pledgor to conduct a cancellation
      registration and return the relevant ownership documents to the
      Pledgor.

              


      

       

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      
 

      Article
22 Disposition of Collateral

      


      
        	
                22.1

              	
                If
      any of the following events occurs, the Lender has the right to auction,
      sell, cash in, withdraw the collateral, and take the proceed with
      priority, or handle the proceed with other measures set forth in
      accordance with Article 19.6; or after negotiate with the Pledgor to set
      off the debt the Borrower owed with the
  collateral:

              


      

      
        
          
            	
                     
      

                  	
                    A.

                  	
                          
                      The
      Borrower does not repay the debt when the loan due (including the maturity
      being accelerated);

                    

                  


          

          
            
              
                	
                         
      

                      	
                        B.

                      	
                        If
      any of events stipulated in Article 19.4 occurs, the Pledgor or the
      Borrower does not timely make up the value of
  collateral;

                      


              

              
                
                  
                    	
                             
      

                          	
                            C.

                          	
                            The
      Lender and the Pledgor agree to cash in or withdraw the collateral to
      repay the debt
due;

                          


                  

                

              

            

          

        

      

      
        
          
            	
                     
      

                  	
                    D.

                  	
                    Other
      situation that the Lender may legally dispose the
    collateral.

                  


          

           

        

      

      
        	
                22.2

              	
                In
      the event the date of the cash-in or withdrawal to the collateral is prior
      to the expiration of the period for fulfilling debt obligations, the
      Lender may cash in or withdraw on the maturity date of the collateral, and
      negotiates with the Pledgor to earlier repay the secured debt with the
      proceed or deposit such proceed into the Lender’s designated account to
      secure the fulfillment the debt obligation of the
  Borrower.

              


      

      


      
        	
                22.3

              	
                In
      the event the date of the cash-in or withdrawal to the collateral is later
      than the expiration of period for fulfilling debt obligations, and the
      Borrower has not repaid the debt 30 days after the expiration of the
      period for fulfilling the debt obligations, the Lender has the right to
      cash in or withdraw prior to the maturity date of the collateral, and use
      the proceed to repay the secured debt with the proceed. The loss arising
      from the earlier cash-in or withdrawal shall be assumed by the Pledgor; if
      the maturity date of collateral is within 30 days upon the expiration of
      the period for fulfilling the debt obligations, the Lender shall dispose
      the collateral on the maturity date of collateral in accordance with
      Article 21.1.

              


      

      


      
        	
                22.4

              	
                If
      after repaying all debts the Borrower owed within the scope of pledge by
      using the proceeds of disposing the collateral, and there is still reaming
      proceeds, the Lender shall timely return the remaining proceed to the
      Pledgor.

              


      

      


      Terms
of Guarantee

      


      In the
event the loan hereunder is guaranteed by a third party, the guarantor agrees to
comply with the terms as follows:

      


       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

       

      Article
23: Method of Guarantee

      


      The
Guarantor voluntarily provides the Lender with the joint and several liability
guarantee.

      


      Article
24 Scope of Guarantee

      


      The scope
of guarantee shall include: the principal, interest, punitive interest,
compound, and default penalty, indemnification under this contract, the expenses
for exercising the Lender’s rights under this contract, and all other expenses
shall be paid by the Borrower.

      


      Article
25 Term of Guarantee

      


      The term
of guarantee is 2 years commencing the maturity date of loan hereunder; in the
event the Lender announces that the maturity date of loan is accelerated, the
term of guarantee is 2 years commencing the accelerated maturity
date.

      


      Article
26 Debit

      


      In
the event the Guarantor does not fulfill the guarantee obligation in accordance
with the contract, the Guarantor authorizes the Lender to debit the
corresponding amount from all accounts the Guarantor opened with Industrial and
Commercial Bank of China and its branches. If the Lender debits the Guarantor’s
time deposit, such debit shall be exercised in accordance with Article 12.2. The
Lender shall notify the Guarantor when conducting the debit.

      


      Other
Terms

      


      Article
27 Transfer

      


      
        	
                27.1

              	
                The
      Lender may transfer its rights hereunder to the other party without
      obtaining consents of the Borrower and the security provider. The Lender
      shall notify the Borrower and the security provider such transfer. The
      aforesaid notification may be conducted by a written notice or public
      press release. In the event the mortgage registration or pledge
      registration needs to be changed due to the Lender’s transfer of right,
      the Mortgagor and Pledgor shall coordinate with the
  Lender.

              


      

      


      
        	
                27.2

              	
                Without
      the written consent of the Lender, the Borrower and the Guarantor shall
      not transfer any rights and obligations under the contract to other
      parties.

              


      

      


       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

       

      Article
28 Covenant of Guarantor

      


      The
Guarantor covenants: In case any of the following events occurs, the Guarantor
shall continue to fulfill the guarantee obligation in accordance with the
contract without obtaining the Guarantor’s consent:

      


      
        	
                28.1

              	
                The
      Borrower and the Lender negotiate to change the borrowing terms, but the
      liabilities of the Borrower do not
increase;

              


      

      


      
        	
                28.2

              	
                The
      Lender announces that the maturity date of loan is
      accelerated;

              


      

      


      
        	
                28.3

              	
                The
      interest is increased due to the adjustments of interest rate of loan
      pursuant to Article 4;

              


      

       

      
        
          	
                  28.4

                	
                  The
      Lender transfers his rights under this contract to any other
      party.

                


        

      

      
Article
29 Insurance

      


      
        	
                29.1

              	
                If
      the Lender requires, the Mortgagor/ Pledgor shall obtain insurances for
      mortgaged properties/ collateral. The term of insurance shall not be
      shorter than the term of loan, and the amount of insurance shall not lower
      than the amount of loan. The insurance premium shall be
      assumed by the insurance
applicant.

              


      

      


      
        	
                29.2

              	
                29.2
      The Lender shall be specified to be the first beneficiary in the insurance
      policy, and there shall not be any terms in the insurance to restrain the
      Lender’s interests. A special agreement shall be stipulated in the
      insurance policy that once the insured event occurs, the insurer shall
      directly pay the insurance compensation to the Lender’s designated
      account. The insurance compensation shall be handled pursuant to Article
      15.7 or Article 19.6 hereunder.

              


      

      


      
        	
                29.3

              	
                Before
      Lender’s claims under this contract have not been paid in full, the
      Mortgagor/ Pledgor shall not cease or rescind the insurance for any
      reason; in case the insurance is ceased or rescinded, the Lender has the
      right to conduct the insurance procedure on behalf of the Mortgagor/
      Pledgor, and the relevant expenses shall be assumed by the Borrower and
      the Mortgagor/Pledgor.

              


      

      


       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

       

      Article
30 Notarization

      


      If the
Lender requires, each party shall conduct an enforcement notarization to this
contract. The Borrower and the security provider agree that after being
notarized, this contract has the effect of enforcement. In case the Borrower or
the security doe not perform obligations hereunder, the Lender may apply for the
execution to the competent People’s Court in accordance with laws.

      


      Article
31 Notice

      


      In case
any of the following events occurs, the Borrower and the security provider shall
immediately notify the Lender:

       

      
        	
                31.1

              	
                The
      Borrower does not repay any other debts when due (including the maturity
      date being declared accelerated), or the Borrower does not fulfill the
      security liability or other obligations he shall
  assume;

              


      

      


      
        	
                31.2

              	
                To
      be involved in the criminal case, litigation, arbitration, disputes, and
      such event adversely affects his ability to repay
  debts;

              


      

       

      
        
          	
                  31.3

                	
                  Changes
      of the address, contact information and company
  occur;

                


        

         

      

      
        	
                31.4

              	
                The
      mortgaged properties or collateral is seized, frozen, confiscated, and
      included in the demolition area or a dispute of ownership
      occurs;

              


      

      


      
        	
                31.5

              	
                In
      the event the security provider is a legal entity or other origination,
      changes on its operation system occur, including but not limited to:
      shareholding reform, contracting, leasing, merger, separation, joint
      operating, joint venture or cooperation; cessation of business,
      dissolution, suspension of business for reform, cancellation of business
      license, revocation of registration of administration for industry and
      commerce; changes on the articles of association, legal representative,
      and shareholding.

              


      

       

      
        
          	
                  31.6

                	
                  Other
      events affect or may affect the full repayment of principal and interest
      of loan on schedule.

                


        

         

      

      Article
32 Confidentiality

      


      The
Lender shall, in accordance with laws, keep the non-public information provided
by the Borrower and security provider for execution and performance of this
contract confidential, except as otherwise listed as below:

       

       

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      
 

      
        	
                32.1

              	
                The
      Lender has the right, in accordance with the relevant laws, regulations or
      other regulatory documents or requests of the financial supervisory
      institute, to provide the information in connection with this contract and
      other relevant information to the  Personal Credit Information
      Database, Enterprise Credit Information Database of People’s Bank of Chin,
      and other credit information database established in accordance with laws,
      for the qualified organizations and individuals to search and use. The
      Lender also has the right for the purpose of execution and performance of
      this contract, through the  Personal Credit Information
      Database, Enterprise Credit Information Database of People’s Bank of Chin,
      and other credit information database established in accordance with laws,
      to search the relevant information of the Borrower and the security
      provider.

              


      

      


      
        	
                32.2

              	
                In
      the event the Borrower and  the security provider default under
      this contract, the Lender has the right, based on the situation of
      default,  to disclose the information related to default to the
      public, or for the purpose of collection of debts, to provide the relevant
      information to the collecting
organizations.

              


      

      


      Article
33 Severability

      


      In the
event any provision of this contract is void or unenforceable, that provision
shall not to cause the invalidity or unenforceability of the remainder of this
contract, nor affect the enforceability of the entire contract. Among which, if
the section of Terms of Loan is void/ rescinded or canceled, in whole or in
part, the enforceability of section of Terms of Mortgage, Terms of Pledge or
Terms of Guarantee shall not be affected, the security provider shall assume the
security liabilities.

      


      Article
32 Dispute Resolution

      


      If any
dispute arising from the performance of this contract, each party shall
proactively negotiate to reach solution; in the event the parties fail to reach
any solution,   the dispute shall be solved in accordance with
Article 34.2:

       

      
        
          	
                  34.1

                	
                        
                    
                      To
      submit such dispute to Blank            
      .
      The arbitration commission will conduct the arbitration in Blank           .

                    

                  

                


        

        
           

          
            	
                    34.2

                  	
                    To
      submit such dispute to the People’s Court at the place where the Lender is
      domiciled.

                  


          

          
34  Blank                                
                                

        

      

      


       

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

       

      Article
35 Miscellaneous

      


      
        	
                35.1

              	
                The
      Lender’s non-exercise, partial exercise or deferring exercise of any right
      under this contract shall not constitute a waiver or change to such right
      or other rights, nor affect the Lender’s further exercise of such right or
      any other right.

              


      

      


      
        	
                35.2

              	
                The
      title of the provisions of this contract is solely for easy search, and
      shall not constitute any limitation and effect to the content and
      interpretation of terms of this contract. The “security provider”
      hereunder refers to the Mortgagor, Pledgor and Guarantor, respectively; in
      the event there are two or more  types of security under this
      contract, the “security provider” refers to all parties providing the
      security under this contract.

              


      

      


      
        	
                35.3

              	
                This
      contract becomes effective upon the execution of each party. In case the
      mortgage or pledge needs to be registered or delivered to effectuate as
      required by laws, the relevant terms are formed upon the execution, and
      become effective upon the date of registration or
  delivery.

              


      

       

      
        
          	
                  35.4

                	
                  This
      contract consists of  original
      copies, the parties of this contract and the mortgage registration
      authority each holds one copy. All original copies of this contract have
      the same legal effect.

                


        

         

      

      


      Article
36 Supplemental Provisions

       

      Blank                                                
                                           

      Blank                                                  
                                         

      Blank                                                  
                                         

      Blank                                                 
                                         

      


      


      The
Lender had brought attention to the Borrower and the security provider that with
respect to each provision, especially to the provisions in black letter, they
have comprehensive and accurate understanding; the Lender has explained the
relevant provisions as per requests of the Borrower and the security provider.
The Borrower and the security provider confirm that they have no
misunderstanding or doubts to the content of this contract.

      


      


      Mortgaged
Property List

      


      Real
Estate Mortgage

      Mortgagor:
Guangxi Liuzhou Medicinal Materials Wholesale Station Guigang
Sub-station

      Coverage:
1044.22 square meters

      Value:
RMB4,058,470

      Address:
Building 2, Liuzhou Medicinal Materials Wholesale Station Guigang Sub-station,
Zhenjing North Ave, Gui Town, Gangbei District, Guigang city

       

       

       

      
 

      


      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      


      


      
        Lender:
Liuzhou City Longcheng Sub-branch of Industrial and Commercial Bank of China
(with signature and seal)

      

      


      Borrower:
Jiang Youru (with signature)

      


      
        Mortgagor:
Guigang Sub-station of Guangxi Liuzhou Medicinal Materials Wholesale Station
(with signature and seal)

      

      


      Date of
Execution: February 12, 2007

      


      
 

       

       

       

       

       

       

       19