Legal Person’s Loan Contract of Qilu Bank (First version of 2010) Contract No. 2010 J.B.W.E.F.J.Z. No. 001

EXHIBIT 10.3

Legal Person’s Loan Contract of Qilu Bank

(First version of 2010)

Contract Xx. 0000 X.X.X.X.X.X.X. Xx. 000

Xxxxxxxx (Xxxxx X): Shandong Yaoyuan Pharmaceutical Company

Residence: Xx. 00 Xxxxxxxx Xxxx, Xxxxx

Legal representative (principal): Song Yanliang

Bank of deposit and account No:

Tel or fax:

Postal code:

Lender (Party B): Jinan City Jingbawei Second Branch of Qilu Bank Co., Ltd.

Residence: Xx. 000 Xxxxx Xxxxxx Xxxx, Xxxxx City

Legal representative (principal): Xxx Xxx

Tel or fax: 0000-00000000

Postal code: 250001

Party A applies for the loan from Party B, and Party B agrees to issue the loan. In accordance with provisions of Contract Law of the Peoples Republic of China, Real Right Law of the People's Republic of China and Guarantee Law of The People's Republic of China, Party A and Party B have made the following agreement through amicable negotiation, to make clear the respective rights and obligations.

Article 1: Amount of loan

Party A borrows the loan of 1.5 million Yuan (for the equivalent foreign currency business, it shall be converted by the selling rate of that day) from Party B.

Article 2: Purpose of loan

Party A borrows for business operation.

Article 3: Term of loan

From Mar. 22, 2010 to Mar. 22, 2011

Article 4: Loan interest rate and interest

(1) The loan interest rate during the contract performance period floats upward 20% based on benchmark interest rate, namely, 6.372%. During the period from signing the contract to issuing the actual loan, if there is the legal adjustment of interest rate, it will float with the same rate based on the benchmark interest rate after adjustment, and Party B will not notify Party A separately.

(2) The loan interest will be calculated since transferring the loan to Party A’s account, and the loan shall be adjusted according to the following method if there is the legal interest rate adjustment; and it shall float with the rate in (1) of this Article:

1. If the loan term is within one year (including one year), it shall execute according to the agreed interest rate of this contract, without calculating interest on multi-stage;

2. If the loan term is above one year, it shall execute the new rate since the first day of next calendar year since the adjustment day, and it will not notify Party A separately.

(3) If the state cancels the benchmark interest rate, Party B has right to re-determine the contract interest rate according to the current national interest rate policy and principle of fairness and credibility as well as referring to the industrial rules and interest rate status. Party A shall promptly negotiate with Party B if there are questions. If the negotiation is failed, Party B has right to receive loan in advance, and Party A shall promptly pay off the principal& interest of loan.

Article 5: Withdrawing conditions

Party A shall comply with the following conditions before withdrawing:

(1) It complied with the contract to apply for withdrawing from Party B and handle the withdrawing procedures;

(2) It accepts and coordinates Party B to adopt the measures for supervising the loan, and the capital loan is not used for other purposes;

(3) There is no breach of contract regulated in this contract;

(4) It provides the effective certificate documents for loan purpose;

(5) It handles other relevant materials or procedures of loan according to the requirements of Party B.

Article 6: Loan payment

(1) The two parties choose the second method below to pay the loan capital:

1. Party B is entrusted to pay: Party B complies with the withdrawing application and payment entrusting of Party A to pay the loan capital to the dealing party of Party A that abides by the agreed purposes in the contract through Party A’s account.

2. Party A pays independently: After Party B issue the loan capital to Party A’s account according to withdrawing application of Party A, Party A independently pays to the dealing party of Party A that abides by the agreed purposes in the contract.

Although the two parties agree to choose the second method, the loan payment with clear paying object of above___Yuan loan and single payment amount exceeding___% of the agreed loan amount in this contract still adopts the first method.

(2) If Party B makes sure that Party A has one of the following situations, it has right to change the independent payment of Party A into Party B being entrusted:

1. Dropping of credit status;

2. Bad change of benefiting ability;

3. Abnormity in using the loan capital;

4. Disobeying the contract to use the loan capital;

5. Avoiding paying and supervision through breaking up the whole into parts;

6. Other situations necessary to change the way of payment.

(3) If Party B makes sure that Party A has one of the following situation, it has right to suspend or stop paying the loan capital;

1. Disobeying the contract to use the loan;

2. Disobeying the contract to pay the principal and interest;

3. Disobeying the agreed method to pay the loan capital or there is abnormity in using the loan;

4. Dropping of credit status or disobeying the commitment and guarantee issues;

5. Exceeding to agreed financial target or the benefiting ability has unfavorable change;

6. There is great cross-default matter, including but not limited in the great default matter occurred between Party A and Party B or other transaction objects;

7. Party A is involved or will be involved in important lawsuit or arbitration procedure and other legal disputes;

8. Party A acts to affect the debt paying ability or lacks of sincerity for debt paying;

9. Party A provides false plans, statistics and financial statements to Party B;

10. For the loan contract with the third party guarantee or (and) mortgage (pledge), the guarantor violates the guarantee contract or loses the ability to assume the responsibility; the mortgagor (pledgor) violates the mortgage (pledge) contract or the mortgaged (pledged) property is sealed up, detained or damaged; or there are losses to other guarantee rights and the guarantee right is restricted;

11. The guarantor is dismissed;

12. The guarantor violates any of the agreed obligations in the contract or it leads to other violation behaviors;

13. After the mortgage registration takes effect, there are disputes on application or the easement is restricted or may be restricted.

14. There are other default situations.

(4) Party A shall comply with the requirements of Party B to provide the following using capital and materials of loan capital:

1. Business contract (it is applicable when Party B is entrusted to pay);

2. Capital using purpose;

3. Other certificate materials approved by Party B.

Article 7: The loan limit, actual loan issuing date and payment date under this contract are based on the loan certificate, which is the part of the contract, covering the same legal effect of this contract.

Article 8: Payment method of principal and interest

(1) Party A agrees to comply with the item 1 below to pay off the principal& interest of loan:

1. The middle and short term loan within five years (including five years) shall be calculated the interest by day, and settle the interest by month, in the form of matching the principal repayment.

2. The long term loan above five years shall be calculated the interest by day, and settle the interest by month, in the form of matching the principal repayment.

3. The formula of the method for matching the repayment of principal and decreasing the repayment of interest is as follows:

Monthly repayment of principal plus interest= loan principal/months of loan term + (loan principal- returned accumulated loan principal) ×monthly rate ×1/30 ×actual days each month

4. The formula of the method for matching the repayment of principal and interest is as follows:

(1+monthly rate) total months of repayment

(1+monthly rate) total months of repayment — 1

Monthly repayment of principal plus interest= loan principal × monthly rate ×

5. Other methods:

Party A agrees to determine the following accounts as the capital collection account, and promises to provide the expenditure status to Party B promptly. Party A shall guarantee to remit the payable loan principal and interest in this account before 20 of the payment month, and Party B will directly withhold and receive the amount; the detail is as follows:

Account name: Shandong Yaoyuan Pharmaceutical Company

Account No: 000000709003800002467

Article 9: Other withholding method

If Party A cannot return the loan principal and interest, Party B has right to directly withhold the loan principal, interest and relevant charges from any bank accounts opened by Party A in the system of Qilu Bank.

Article 8: Change or termination of the contract

(1) After the effective date of the contract, any party shall not change or terminate the contract separately.

(2) If the loan expires, and owing to the change of objective circumstances, Party A cannot pay off the loan through efforts, it can apply for extending from Party B; Party A shall propose the written application to Party B within 10 days before the loan expires, and submit the written guarantee for agreeing the extending period of the guarantor and/or pledgor; after Party B approves and handles the guarantee procedures for extending the loan, the two parties shall handle the extending procedures; the contract interest rate during the extending period shall comply with the relevant regulations.

(3) If Party A transfers the rights and obligations under this contract to the third party, it shall get the written permission of Party B and guarantor; and the transfer will be take effect after the transferee unit signs the loan contract with Party B and handles the guarantee procedures.

(4) When there are changes of merger, dividing, contracting and shareholding reform for one party, the main body after change will enjoy the rights and assume the obligations of this contract.

Article 10: Loan guarantee

To guarantee paying off the loans under this contract, Party A/the third person shall provide the guarantee according to item 1and 3 below to Party B:

(1) Guarantee (see detail in 2010 J.B.W.E.F.J.B.Z. No. 001 Legal Person’s Loan Contract of Qilu Bank)

(2) Mortgage (see detail in No. _____  ________________ of Qilu Bank)

(3) Pledge (see detail in 2010 J.B.W.E.K.H.Z.G.Z.Z. No.001 Maximum Amount Pledge Contract of Goods Control & Financing of Qilu Bank)

(4) Others:

Before handling the above agreed guarantee procedures, Party B has right to refuse issuing the loan to Party A without conditions.

Article 12: If Party A needs to change its system or operation modes like contract, lease, merger & acquisition, joint venture, dividing, joint operation, shareholding reform, it shall notify Party B in advance of 30 days in the written form. After the written approval of disposal method of contract bond of Party B, Party A can execute the above behaviors.

Article 13: Commitment of Party A

(1) Before paying off the loan principal and interest of Party B, it doesn’t mortgage/pledge to the third party with the assets formed by Party B’s loan.

(2) Before paying off the loan principal and interest of Party B, it shall not provide the overburdening guarantee to others.

(3) If the loan under this contract is the flow capital, Party A shall guarantee not using the loan for the investment of the fixed capital and equity, as well as the production and operation field and purposes prohibited by the state.

(4) It shall coordinate Party B to take loan payment management, after-loan management and relevant inspection.

(5) It shall get the permission of Party B before taking foreign investment, substantially-increasing the loan financing as well as merger, dividing and equity transfer.

(6) It shall promptly notify Party B if there is the great unfavorable matter that affects the paying off ability.

(7) Party B has right to tack back the loan according to capital collection status of Party A.

Article 14: Major rights and obligations of Party A and Party B

(1) Rights and obligations of Party A:

1. Party A has right to require Party B to issue the loan according to the contract;

2. Party A shall return the entire loan principal and interest within the greed period of contract;

3. Party A shall use the loan according to the agreed purpose, and it shall not use for other purpose without the written permission of Party B;

4. Party B shall provide the relevant plans, statistics and financial statement according to the requirements of Party B, and ensure the authenticity, completeness and effectiveness;

5. Party A seriously looked up and knew the responding clauses of the guarantee contract, and agreed to accept the restriction and assume the relevant responsibility.

(2) Rights and obligations of Party B:

1. Party B has right to receive and withhold the loan principal and interest according to the contract;

2. Party B has right to examine the using situation of loan;

3. Party B has right to supervise the assets of Party A and its operation status;

4. Party B has right to take back the loan in advance according to the capital collection status;

5. Party B has right to participate in the large-amount financing, assets sales and merger, dividing, shareholding reform and bankrupt liquidation;

6. If one of the following situations occurred to the mortgage, pledge, warrant or other guarantees provided by Party A/ the third person, Party B has right to require Party A to eliminate the relevant bad effect, and/or require Party A to increase and change the guarantee conditions:

(1) The guarantor violates the warrant contract or loses the ability to assume and guarantee the responsibility;

(2) The mortgagor violates the mortgage contract or the mortgaged property is derogated or damaged;

(3) The pledgor violates the pledge contract or the mortgaged property is derogated or damaged;

(4) There are other situations that affect its guarantee ability.

7. Party B shall promptly issue the loans according to the period regulated in the contract.

Article 15: Responsibility for breach of contract

(1) Party B violates the contract agreement to use the misappropriation or diversion of loan, Party B has right to calculate the interest for the misappropriation or diversion of loan with floating upward 100% for the interest rate agreed in the contract during this period.

(2) The loan that Party A doesn’t play off on schedule is regarded as the overdue loan, Party B has right to calculate the interest for the overdue part with floating upward 50% for the interest rate agreed in the contract during this period.

(3) The interest that Party B cannot pay in time for Party A shall be calculated the compound interest quarterly (short-term loan shall be calculated monthly) by floating upward of 50% agreed in the contract; the interest that cannot be paid in time during the period of misappropriation or diversion of loan shall be calculated the compound interest quarterly (short-term loan shall be calculated monthly) by floating upward 100% agreed in the contract; if it is the same loan, covering both overdue and misappropriation or diversion features, it shall handle with one aspect of more serious effect.

(4) It shall execute by the adjusted regulations if there is policy adjustment in people’s court for penalty interest rate.

(5) If Party A is involved in the situation of item 3 of Article 6, or violates the regulations of Article 12 and 13, Party B has right to stop issuing the unpaid loan, requiring replacing the guarantee or supplement new guarantee, taking back the issued loan principal and interest in advance and realizing the guarantee right in advance; it has right to require Party A to assume 5% of loan as the liquidated damages; it also has right to directly withhold the loan principal, interest, liquidated damages, damages and other payable items from any bank accounts opened by Party A in the system of Qilu Bank; it has right to terminate the contract.

(6) Party B complies with the law or the contract to realize the principal creditor's right and/or guarantee right, the obtained items shall be paid off according to the following order:

1. Charges for realizing the guarantee right;

2. Charges for realizing the principal creditor's right;

3. Principal creditor's right, penalty interest and compound interest;

4. Other payable items like liquidated damages and damages.

Article 16: Assumed charges

The charges like lawyer’s charges, announcement charges, delivery charges, registration charges, inquiry charges, insurance charges and drawing charges used to perform the contract, handle the guarantee procedures, realize Party B’s creditor's rights and/or guarantee right shall be assumed by Party B.

Article 17: Disputes solution

The disputes relevant to this contract shall be solved through negotiation; if it fails to be solved in this way, it shall lodge the lawsuit for the people’s court at Party B’s location; the two parties shall perform the other clauses with no relation with the disputes during the lawsuit period.

Article 18: Other agreed matters

(1) This contract is signed for No. 2010.J. B.W.E.F.S.Z. No. 001 Legal Person’s Comprehensive Credit Line Contract of Qilu Bank, and it is the specified part of this contract.

(2)

(3)

Article 19: The contract will take effect after meeting the following conditions:

(1) It is sealed or made the special seal for contract by Party A;

(2) It is sealed or made the special seal for contract by the principal or authorized agent of Party B.

Article 20: The contract has two copies, with Party A and Party B holding one.

Party A (seal): Shandong Yaoyuan
Pharmaceutical Company		Party B (seal): Jinan City Jingbawei Second
		Branch of Qilu Bank Co., Ltd.
Legal representative (principal) or authorized
agent (seal): Song Yanliang		Legal representative (principal) or authorized agent (seal):  Xxx Xxx
		Operator (signature):
		Date: Mar. 22, 2010