ABCS(2004)1001

     

    Loan
Contract

    


    Borrower
(Full Name): Kunming
Shenghuo Pharmaceutics (Group) Co., Ltd.

     

    Lender
(Full Name): Agricultural Bank of China, Kunming Shuanglong
Sub-Branch

     

    Pursuant
to the relevant PRC laws and regulations, the two parties, following
consultations, mutually agree to enter into this Contract (“Contract”) as
follows.

     

    Article
1  Loan

     

    1.  Type
of loan: Loan toward
current capital

     

    2.  Purpose
of loan: Purchase raw
(auxiliary) material

     

    3.  Currency
and amount of loan (in Capital): RMB FIFTY MILLION
YUAN

     

    4.  Term
of loan

     

    
      	
               
      

            	
              (1)

            	
              As
      shown in the following table:

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        From

                                      	 	
                                        To

                                      	 
	
                                        Year

                                      	 	
                                        Month

                                      	 	
                                        Day

                                      	 	
                                        Amount

                                      	 	
                                        Year

                                      	 	
                                        Month

                                      	 	
                                        Day

                                      	 	
                                        Amount

                                      	 
	
                                        2010

                                      	 	 
      	 	 
      	 	¥	50,000,000.00	 	
                                        2012

                                      	 	 
      	 	 
      	 	¥	50,000,000.00	 


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (In case
of insufficient space therein, additional paper can be attached thereto as
supplement to form an integral part hereof.)

     

    
      	
               
      

            	
              (2)

            	
              If any inconsistency exists
      between the amount and the from-to dates of the loan recorded herein and
      those recorded in the loan certificate, the latter shall prevail. As an
      integral part hereof, the loan certificate has equal legal force and
      effect as this Contract;

            


    

    


    
      	
               
      

            	
              (3)

            	
              If the loan hereunder is in
      foreign exchange, the Borrower shall repay the principal and interest of
      the loan in the original currency as per the
    schedule.

            


    

     

    5.  Loan
Interest Rate

     

    The
interest rate of loans in RMB is determined as per Method / below:

     

    
      	
               
      

            	
              (1)

            	
              Floating Interest
      Rate

            


    

     

    The loan
interest rate floats by 10% based on the benchmark interest rate, and it
executes the annual interest rate of 5.40%. The benchmark
interest rate for loans with a term of five years or less shall be the benchmark
RMB interest rate for the same term announced by the People’s Bank of China,
while that for loans with a term of more than five years shall be the above
benchmark interest rate plus _______/______ (in words) percentage
point(s).

     

    Adjustment
to the interest rate shall be made once in every TWELVE-month period.
In case of adjustment made to benchmark RMB interest rate by the People’s Bank
of China, the Borrower shall, starting from the corresponding day of loan in the
first month of the next 12-month period after the adjustment, pay interest
according to the adjusted benchmark interest rate for the relevant term and the
new interest rate determined as per the above calculation method, without
further notice. If the adjustment day of benchmark interest rate falls on the
same day as the loan issuance day or the corresponding day of loan in the first
month of the 12-month period, the new loan interest rate shall apply starting on
the adjustment day of benchmark interest rate. If there is no corresponding day
of loan, the last day of such month shall be deemed as the corresponding day of
loan.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (2)

            	
              Fixed Interest
      Rate

            


    

     

    The loan
interest rate floats upward/downward by   /  %
to stand at _/__% per annum. The benchmark interest rate for loans with a term
of five years or less is the benchmark RMB interest rate for the same term
announced by the People’s Bank of China, while that for loans with a term of
more than five years is the above interest rate plus _/__ (in words) percentage
point(s).

     

    The
interest rate of loans in foreign currency shall be determined as per Method
__/___ below:

     

    
      	
              (1)

            	
              The
      interest rate of the loan, which consists of __/__-month _/__
      (LIBOR/HIBOR) + _/__ % interest
      margin shall equal to the floating interest rate for loan with a term of
      __/__ months. LIBOR/HIBOR is the interbank offered rate of London/Hong
      Kong announced by Reuters for the corresponding term two working days
      prior to the interest bearing date.

            


    

    
      
      

    

     

    (2) An
annual interest rate of __/___ % shall apply till the loan expiration
date.

     

    (3) Other
methods:               /               .

     

    6.
Interest Settlement

     

    The
interest on the loan hereunder shall be settled on a quarterly basis, with
the date of settlement falling on the 20th
day of each quarter-end month. The Borrower shall pay up the interest on every
interest settlement day. If the last repayment day of the loan principal is not
an interest settlement day, the outstanding interest shall be paid up
immediately together with the principal (daily interest rate = monthly interest
rate/30).

     

    Article
2  Where the Borrower fails to meet the following conditions, the
Lender shall have the right to refuse granting the loan hereunder:

     

    
      	
              1.

            	
              The
      Borrower opens a / account with
      the Lender.

            


    

    


    
      	
              2.

            	
              The
      Borrower neither provides required related documents and materials, nor
      completes relevant procedures.

            


    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              The
      Borrower has completed the related approval, registration and other
      statutory procedures if the loan under this contract is in foreign
      currency.

            


    

    


    
      	
              4.

            	
              If
      the loan under this contract is pledged, the pledge of this contract and
      statutory procedures of some relevant registration and /or insurance have
      been completed according to Lender’s requirements, and the pledge and the
      insurance both are effective.

            


    

    


    Article
3  Lender’s Rights and Obligations

    


    
      
        	
                1.

              	
                The
      lender has the rights to know the conditions of the Borrower’s operation
      condition, financial activity, inventory and the usage of the loan, and
      require the Borrower to provide documents, materials and information such
      as financial statements.

              


      

    

    


    
      
        	
                2.

              	
                When
      adverse matters set forth in the NO. 7, 8 and 10 under the Article 4
      occur, which may have sufficient impact on the security of the loan, the
      Lender can stop lending and then recover the loan before the maturity date
      of the loan.

              


      

    

    


    
      
        	
                3.

              	
                When
      the Lender recover the loan according to the contract or recover in
      advance the loan principal, interest, penalty, compound interest and other
      fees the Borrower should pay, the Lender can pull out money from any of
      the Borrower’s accounts.

              


      

    

    


    
      
        	
                4.

              	
                If
      the funds the Borrower repaid are not sufficient to cover all the amounts
      payable, the Lender can use the funds to recover the loan principal,
      interest, penalty, compound interest and
fees.

              


      

    

    


    
      
        	
                5.

              	
                If
      the Borrower doesn’t repay the loan, the Lender can publicly disclose the
      Borrower’s nonperformance.

              


      

    

    


    
      
        	
                6.

              	
                The
      Lender should issue sufficient loan to the Borrower in time according to
      this contract.

              


      

    

    


    Article
4  Borrower’s Rights and Obligations

    


    
      	
               
      

            	
              1.

            	
              The
      Borrower has the right to get and use the loan according to this
      contract.

            


    

    


    
      	
               
      

            	
              2.

            	
              The
      Borrower can settle the current account and make deposit which are
      relating to the loan through the account which is set forth in Article
      2.

            


    

    


    
      	
               
      

            	
              3.

            	
              If
      the loan under this contract is in foreign currency, the Borrower has
      completed the related approval, registration and other statutory
      procedures.

            


    

    


    
      	
               
      

            	
              4.

            	
              The
      Borrower should repay the loan principal and interest in time. If the
      Borrower intends to extent the loan, the Borrower should submit writing
      application to the Lender 15 days ahead of the expiration date of the
      loan.

            


    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.

            	
              The
      Borrower should use the loan according to the agreed purpose of the loan
      under this contract, and shouldn’t embezzle the
  loan.

            


    

    


    
      	
               
      

            	
              6.

            	
              The
      Borrower should provide true, complete and effective financial statements
      and other related materials and information to the Lender every month, and
      then assist the Lender to review its operation, financial activity and the
      use of the loan.

            


    

    


    
      	
               
      

            	
              7.

            	
              If
      the Borrower have the activities about contracting, leasing, shareholding
      reform, jointing operation, merging, separating, jointing venture, assert
      transferring, applying for stopping operation for correction, applying for
      dissolving, applying for bankrupting and other activities which will
      sufficiently cause the changes in the relationship of the rights and
      obligations under this contract, or effect the reality of the Lender’s
      rights, the Borrower should inform the Lender by writing notice and get
      the Lender’s approval. Simultaneously, the Borrower should commit the
      obligation or repay the loan in advance, otherwise, all activities above
      can’t be implemented.

            


    

    


    
      	
               
      

            	
              8.

            	
              Besides
      the activities set forth above, if there are other conditions, which will
      have material adverse impact on Borrower’s ability to perform the
      obligation under this contract, such as stopping 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, the Borrower should
      inform the Lender of this by writing notice, and then take the steps which
      are accepted by Lender to ensure the security of the
  loan.

            


    

    


    
      	
               
      

            	
              9.

            	
              If
      the Borrower wants to provide guarantee for other obligation or pledge to
      the third party with its main asserts, and these behaviors may affect the
      Borrower’s ability to repay the loan under this contract, the Borrower
      should inform the Lender by writing notice in advance and then get the
      Lender’s approval.

            


    

    


    
      	
               
      

            	
              10.

            	
              The
      Borrower shouldn’t withdraw capital, transfer asserts or transfer shares
      without authorization to avoid its
obligation.

            


    

    


    
      	
               
      

            	
              11.

            	
              If
      there are changes in the Borrower’s name, legal representative, location
      and business scope, the Borrower should inform the Lender in time by
      writing notice.

            


    

    


    
      	
               
      

            	
              12.

            	
              If
      the warrantor under this contract has the conditions like stopping
      operation, closure of business, cancel of registration, revocation of
      license, bankruptcy and loss, and then lose part of or the whole
      warranting ability related to this loan, or the worth of the mortgage
      under this contract decreases or impairs, the Borrower should provide
      other warranting information which is accepted by the
    Lender.

            


    

    


    
      	
               
      

            	
              13.

            	
              The
      Borrower should burden the fees about legal service, insurance,
      transportation, assessment, registration, reservation, evaluation and
      notarizing and so on.

            


    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Article
5  Repay the Loan in Advance

    


    If the
Borrower intends to repay the loan in advance, it must get the Lender’s
approval; if the Lender agrees, the interest of the part the Borrower wants to
repay in advance is determined as per Method    /  below.

    
      	
               
      

            	
              1.

            	
              The
      interest will be charged per as the agreed term of the loan and agreed
      executive interest rate.

            


    

    


    
      	
               
      

            	
              2.

            	
              The
      interest will be charged using the interest which floats upward by   /   percentage
      on the base of the agreed executive
rate.

            


    

    


    Article
6  Liability for Breach of Contract

    


    
      	
               
      

            	
              1.

            	
              If
      the Lender doesn’t issue loan with full amount to the Borrower according
      to the contract, which cause the Borrower’s loss, the Lender should pay
      liquidated damages to the Borrower according to the liquidated amount and
      days, which will be calculated under the same method to calculate the
      interest of overdue loan.

            


    

    


    
      	
               
      

            	
              2.

            	
              If
      the Borrower doesn’t repay the loan principal, the Lender will charge
      interest which floats upward by / on the base
      of the executive interest rate agreed under the contract. During the
      overdue period, if the loan is in RMB, the rate of interest penalty shall
      rise correspondingly since the date on which the benchmark interest rate
      rises in case of adjustment made to benchmark RMB interest rate by the
      People’s Bank of China.

            


    

    


    
      	
               
      

            	
              3.

            	
              If
      the Borrower doesn’t use the loan according to the agreed purpose of the
      loan, the Lender will charge penalty with the interest rate which floats
      upward by /
      percentage on the base of the benchmark interest rate agreed under
      the contract towards the unfulfilled part from the date when noncompliance
      behavior happens to the date the loan principal and interest are repay up.
      During this period, if the loan is in RMB, the rate of interest penalty
      shall rise correspondingly since the date on which the benchmark interest
      rate rises in case of adjustment made to benchmark RMB interest rate by
      the People’s Bank of China.

            


    

    


    
      	
               
      

            	
              4.

            	
              As
      to past due interest, the Lender charges compound interest according to
      the People’s Bank of China’s
stipulations.

            


    

    


    
      	
               
      

            	
              5.

            	
              If
      the Borrower violate the obligations under this contract, the Lender has
      the right to require the Borrower to correct the noncompliance behaviors
      within a limited period, and to cease to lending and recover the issued
      loan, and also has the right to announce the loan under other loan
      contract entered into between the Borrower and the Lender matures
      immediately or take other steps to ensure the security of the
      asserts.

            


    

    


    
      	
               
      

            	
              6.

            	
              If
      any warrantor of the Borrower under this contract violate the agreed
      obligation in the guarantee contract, the Lender has the right to cease to
      issue the loan, recover the issued loan, take other steps to ensure the
      security of asserts.

            


    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              7.

            	
              If
      the Lender has to take lawsuit or arbitration to realize its claims, the
      Borrower should burden the legal fees, travelling expense and other fees
      the Lender spends to realize its
claims.

            


    

    


    Article
7  Security for Loan

     

    The loan
under this contract is secured by mortgage & pledge
and the Pledge Agreement will be entered into separately. If it’s secured at the
highest amount, the No. of the Pledge Agreement is  /  .

     

    Article
8  Settlement of Dispute

    


    If there
is any dispute in the process of implementing this contract, the two parties can
negotiate to settle it, and also can settle it as per the method  1  below:

    
      	
               
      

            	
              1.

            	
              Lawsuit.
      The People’s Court in the Lender’s residence has the
      jurisdiction.

            


    

    
      	
               
      

            	
              2.

            	
              Arbitration.
      Submit the dispute to      /      (the name of
      the arbitration organization)and
      arbitrate it according to its arbitration
rules.

            


    

    During
the lawsuit or the arbitration, the terms under this contract which have not
been involved in the dispute still need to be executed.

    


    Article
9  Other Items

     

    
      
        
          
            
              
                	 
      	
                         

                      	 
      
	 	 	 
	 
      	
                         

                      	 
      


              

            

          

        

      

    

    


    Article
10  Contract Effectiveness

     

    This
Contract shall come into force as of the date of execution and sealing by both
parties.

     

    Article
11  Counterparts

     

    This
Contract shall be executed in / original copies,
each for each party,   /  for
each guarantor, and each for      /        ,
which shall have equal force and effect.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Article
12  Reminder

     

    The
Lender has reminded the Borrower of the need to have a complete and accurate
understanding of the provisions hereof and, at the request of the Borrower,
explained the provisions as necessary. The signing parties have a common
understanding of the meanings hereof.

    


    Borrower
(Seal & Signature):
  

     

    “KUNMING
SHENGHUO PHARMACEUTICS (GROUP) CO., LTD.” (Seal)

    Legal Representative: Lan Guihua
(Signature)   

     

    Lender (Seal &
Signature):

     

    “AGRICULTURAL
BANK OF CHINA KUNMING SHUANGLONG SUB-BRANCH” (Seal)

     

    Governor:
Zhou Zuowu (Signature)

    


    Date of
Execution:

    Place of
Execution: Agricultural Bank of China,
Kunming Shuanglong Sub-Branch


    
      
         


      

      
        8