Document:

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

    
      
         

      

      
        8ABCS(2007)2002

       

      Mortgage
Contract

       

      Mortagee (full name): Agricultural Bank of China,
Kunming Shuanglong Sub-Branch

       

      Mortgagor: Kunming Shenghuo Pharmaceutical
(Group) Co.,
Ltd.

       

      This
Mortgage Contract is entered into by and among the two parties in
accordance with relevant Chinese laws and regulations for purpose of ensuring
that Kunming Shenghuo Pharmaceutical (Group) Co., Ltd. will pay back the loan
under Loan Contract as above
mentioned.

       

      1.
Type and Amount of the Creditor’s Principal Claim

       

      The
creditor’s principal claim guaranteed is the loan borrowed for current capital in
the amount of RMB33.17
million.

       

      2.
The Scope of Guaranty of Mortgage

       

      The scope
of this guaranty of mortgage includes the amount of creditor’s principal claim
and the interest thereof, default fine, compensation for damage and all kinds of
relevant expenses on for the mortgagee to realize the creditor’s claim and the
mortgaged right.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.
Collateral

       

      The
mortgagor agrees on the mortgage of housing ownership, as
to the details of collateral please find the List of Mortgage of Real Estate as attached,
which constitutes the integral part of this Contract and has same legal force
and effect as in the Contract; and

       

      The
provisional price of the above mentioned collateral is RMB47, 390,840 while the
terminal value will be determined by its actual disposing price.

       

      4.
Covenants of the Mortgagor

       

      4.1 The
Mortgagor has obtained authorization necessary to enter into this Contract
pursuant to relevant regulations and procedures.

       

      4.2 The
full and undisputed ownership and disposition right of the collateral is
entitled to the mortgagor.

       

      4.3 The
collateral is negotiable or transferable according to law.

       

      4.4 Such
cases as the collateral has been sealed up, distrained or supervised would not
happen.

       

      4.5 The
mortgagor shall make a full and accurate disclosure to the extent that the money
and collateral such as tax in default, construction mortgages have been
mortgaged or rented.

       

      4.6 The
Mortgagor has obtained approval from co-owners of the right to be pledged under
this Contract.

       

      4.7
During the term of mortgage, the mortgagor shall inform the mortgagee in written
for any of following cases:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.7.1 The
collateral has been sealed up, distrained, supervised or has been taken other
enforcement actions.

       

      4.7.2 The
mortgagor changed the capital structure or operation system, include but not
limited to contract operation, leasing, shareholding system transformation,
joint operation, merger, separation, partnership, asset transferring, and
etc.

       

      4.7.3 The
business licenses of the mortgagor has been cancelled or revoked, or he is
ordered to close down or was terminated for other causes.

       

      4.7.4 The
mortgagor applies for bankruptcy, reorganization, reconciliation or is the
subject of bankruptcy and reorganization applications.

       

      4.8 There
is no existence of other cases that would affect the realization of
collateral.

       

      5.
Effect of the Collateral

       

      The
effect of collateral is extended to the ancillary component, incidental right,
subrogation of mortgage or other property and rights associated with the
collateral according to laws and regulations.

       

      6.
Management and Utility of the Collateral

       

      6.1 The
collateral under this Contract shall be kept by the mortgagor; the mortgagor
shall be liable for the management of utility of the collateral. And the
mortgagee shall be entitled to supervise and review how the collateral was
managed and used.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      6.2
During the term of mortgage, the mortgagor may not grant or transfer, rent,
remortgage the collateral or dispose it in other ways without the written
approval of the mortgagee. Where the written approval is available, the proceeds
from the collateral disposition shall firstly be used to liquidate the secured
creditor’s principal claim and the escrow.

       

      6.3 Where
the collateral was damaged, lost, expropriated, or was owned by the third party
resulted from the affiliation, mixture or process of the collateral, the
mortgagor shall take active measures to prevent the loss from increasing,
meanwhile shall notify the mortgagee in written. The mortgagee is entitled to
obtain the indemnity at first priority. Where the performance term of the
secured creditor’s claim has not elapsed, the mortgagee is entitled to liquidate
the debt or to escrow in advance.

       

      6.4
During the term of mortgage, where the value of collateral is decreased, the
mortgagee is entitled to ask the mortgagor resuming original value of the
collateral or offering a guaranty which is equivalent to the decreased value and
needs to be recognized by the mortgagee.

       

      
        7.
Insurance of the Collateral

      

       

      
        	
                 
      

              	
                7.1
      The mortgagor shall effect the insurance for the collateral at the request
      of the mortgagee and designate the mortgagee as the first beneficiary. The
      original insurance document shall be delivered to the mortgagee for
      storage.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                7.2
      The mortgagor shall be liable for the insurance premiums and pay it in
      full amount and on time. It also requires the mortgagor perform other
      obligations under the insurance contract (including the insurance document
      or other insurance certificate). During the term of mortgage, where the
      mortgagor didn’t pay the insurance premiums or effect (or renew) the
      insurance contract on time, the mortgagee is entitled to make advance
      payment of the insurance premiums or effect the insurance contract on
      behalf of the mortgagor, while the mortgagor shall be liable for those
      expenses. The mortgagor agrees that the mortgagee could collect the above
      mentioned expenses from its account opened at the
    mortgagee.

              

      

       

      
        	
                 
      

              	
                7.3
      During the term of mortgage, the mortgagor may not unilaterally or
      negotiate with the insurer to change or terminated the insurance contract
      without the written approval of mortgagee; neither should he waive the
      right to insurance claims or the right to claim compensation against the
      third party.

              

      

       

      
        	
                 
      

              	
                7.4
      During the term of mortgage, where an insurance incident incurred to the
      collateral, the mortgagor shall immediately inform the insurer and
      mortgagee, and shall be responsible to claim compensation. Where the
      mortgagee didn’t perform his obligation of notification or claiming
      compensation, causing the loss of the mortgagee, the mortgagor shall be
      liable for indemnity.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        8.
Registration of Mortgage

      

       

      
        	
                 
      

              	
                8.1
      The mortgagor shall register this Mortgage Contract with relevant
      registration authorities within 5 days from the date of its execution; all
      of those certificates, mortgage registration document associated with the
      collateral shall be kept by the
mortgagee.

              

      

       

      
        	
                 
      

              	
                8.2
      During the term of mortgage, where the registration needs to be changed,
      the mortgagor shall be liable to do
so.

              

      

       

      
        	
                 
      

              	
                8.3
      During the term of mortgage, where the mortgaged right is transferred by
      the mortgagor according to this Contract; the mortgagor shall be in
      assistance with the mortgagee and transferee on the change of
      registration.

              

      

       

      
        9.
Transfer of Mortgaged Right

      

       

      
        Where
part of the creditor’s claim is transferred by the mortgagee, he is entitled not
to transfer the corresponding mortgaged right.

      

       

      
        10.
Realization of Mortgaged Right

      

       

      10.1
Under any of the following circumstances, the mortgagee has the right to
exercise the mortgaged right:

       

      10.1.1
The mortgagee is not paid at the maturity of the obligation under the principal
contract.

       

      10.1.2
The business licenses of the debtor or mortgagor has been cancelled or revoked,
or he is ordered to close down or was terminated for other causes.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.1.3
The People’s Court has accepted the bankruptcy application of the debtor or
mortgagor or has made the determination of a settlement.

       

      10.1.4
The debtor or mortgagor was dead or was declared lost or dead.

       

      10.1.5
The collateral has been sealed up, distrained, supervised or has been taken
other enforcement actions.

       

      10.1.6
The collateral was damaged, lost or expropriated.

       

      10.1.7
The mortgagor didn’t resume the value of the collateral or offer the
corresponding guaranty at the request of mortgagee.

       

      10.1.8
The mortgagor violated those obligations under this Contract.

       

      10.1.9
Other circumstances that have material effect on the realization of mortgaged
right.

       

      10.2
Where more than two material guarantors for the creditor’s claim under this
Contract exist in the mean time, the mortgagee is entitled to exercise the
security right to any one of the collateral or both of them.

       

      10.3
Where the mortgagor is the third person other than the debtor, meanwhile the
debtor has offered material guaranty for the creditor’s claim under the
principal contract, and the mortgagor has waived this security right, the
mortgagor agrees to offer a guaranty of mortgage for the creditor’s claim under
the principal contract.

       

      11.
Liability for Breach of Contract

       

      11.1
After this Contract takes effect, where the mortgagee didn’t perform his
obligations, resulting in the loss of mortgagor, the mortgagee shall be liable
for the indemnity.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      11.2 The
mortgagor shall indemnify the mortgagee in case of committing any of the
following acts:

       

      11.2.1
Didn’t obtain legal and effect authorization which is necessary for the guaranty
under this Contract.

       

      11.2.2
Didn’t perform his obligation of making a full and accurate disclosure to the
extent that there is a existence of tax in default, construction mortgage,
co-ownership of the collateral and a dispute over the collateral, or the
collateral was mortgaged or rented, or the collateral has been sealed up,
distrained or supervised.

       

      11.2.3
Didn’t register the Mortgage Contract according to the provisions
herein.

       

      11.2.4
Disposed the collateral without the written approval of the
mortgagee.

       

      11.2.5
Didn’t resume the value of the collateral or offer the corresponding guaranty at
the request of the mortgagee.

       

      11.2.6
Other activities that have violated the agreement under this Contract or
affected the realization of mortgaged right.

       

      12.
Liability for Expenses

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      13.
Resolution of Disputes

       

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

       

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

       

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

       

      14.
Other Matters

       

      14.1 The
mortgagor hereby acknowledged the receipt of the principal contract and have
read and understood this contract secured by the mortgagor.

       

      The mortgage involves the
housing ownership and corresponding part of land.

       

      15. This
Contract shall take effect from the date of its execution.

       

      16. This
Contract is made out in 5 copies and each one
for the Mortgagee,
the Mortgagor, the
Debtor,
Department of Real Estate Registration and the Public Notary Office. Each
copy has same legal force and effect.

       

      17.  Reminder

       

      The
mortgagee has notified the mortgagor to make a complete and accurate
understanding for each provision under this Contract and have made explanations
for corresponding provisions as per the requirement of the mortgagor. Both
parties reached an agreement on this Contract.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Mortgagee:

       

      Agricultural
Bank of China, Kunming Shuanglong Sub-Branch

       

      Signature: Zuowu
Zhou

       

       

      Mortgagor:

       

      Kunming
Shenghuo Pharmaceutical (Group) Co., Ltd.

       

      Signature: Guihua
Lan

       

       

      Date:
March 31, 2010

       

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]