CONTRACTUAL JOINT VENTURE CONTRACT

Chapter 1

General Principles

Shanghai Changning District Central Hospital and U.S.-China Industrial Exchange,
Inc., in accordance with the Law of the People's Republic of China on
Chinese-Foreign Contractual Joint Ventures and other relevant laws and
regulations of the PRC, through friendly discussions and in conformity with the
principles of equality and mutual benefit have agreed to invest in and establish
a contractual joint venture in Shanghai, China. The two parties have agreed that
the joint venture undertaking will be a Shanghai United Family Hospital, Inc.
(Hereinafter referred to as "the Hospital") in Shanghai, China. The two parties
conclude this Contract for the contractual joint venture. The stipulations of
the contract are as follows.

Article 1 Parties

The Parties to this Contract ("the Parties") are:

(1) Shanghai Changning District Central Hospital ("Party A")

Legal Address: 1111 Xian Xia Road, Shanghai, P.R.C.

Legal Representative: Mr. Xu Weiren

Title: President

Nationality: P.R.C.

Tel: 86-21-6290-9911

Fax: 86-21-6290-6478

(2) U.S.-China Industrial Exchange, Inc. ("Party B")

Legal Address: 7201 Wisconsin Avenue, Bethesda, Maryland, 20814, U.S.A.

Legal Representative: Ms. Roberta Lipson

Title: Chairman of the Board, CEO, President

Nationality: U.S.A.

Tel: 1-301-215-7777

Fax: 1-301-215-7719

Article 2 Parties' Legal Authority

Each Party represents that

(1) it is a valid legal person duly established under the laws of the People's
Republic of China or the United States of America and represents that it enters
into this Contract on its own account and that it possesses all necessary
corporate powers and authority to enter into this contract, and to have its
rights and to carry out its obligations hereunder;

(2) the representative who signs this contract on behalf of the Party has been
authorized to do so;

(3) the obligations of this Contract become binding from the date the Contract
goes into effect, that is, after final approval by the relevant approval
authorities.

Chapter 2

Establishment of the Hospital

Article 3

Legal Status of the Hospital

(1) The Parties have agreed to cooperatively establish and manage the Hospital
under the relevant laws of P.R.C. The Hospital shall be a limited liability
entity with the status of an enterprise legal person in China. All activities of
the Hospital shall comply with, and the rights and interests of the Hospital and
the Parties shall be protected by, Chinese Law.

(2) The name of the Hospital shall be the Shanghai United Family Hospital.

(3) The legal address of the Hospital shall be 1111 Xian Xia Lu, Shanghai, PRC.

Article 4 Limitation of Liability

As a limited liability entity, each of the Parties to the Hospital shall be
liable for the obligations of the Hospital only to the extent of the registered
capital which it has agreed to contribute in accordance with the provisions
regarding Capital Contributions set out below and shall have no other liability
for the debts or obligations of the Hospital. Creditors of the Hospital
(including taxation and other authorities) shall look only to the assets of the
Hospital for payment. Subject to this limitation, the Parties shall share the
profits of the Hospital as provided in this Contract.

Article 5 Legal Protection

The Hospital is a legal entity formed according to Chinese law. Its activities
will be under the protection and jurisdiction of Chinese law and regulations.

Article 6 Approvals

This Contract and the Articles of Association of the Hospital shall be submitted
to the appropriate government for examination and approval. The Parties will
submit the documents for approval within 30 days of the date of this Contract.
Party B shall, within 30 days of receiving the certificate of approval, apply to
the administrative authorities for industry and commerce for registration of the
Hospital and obtain its business license.

Article 7 Date of Establishment

The official date of establishment of the Hospital shall be regarded as the date
on which its business license is issued.

Chapter 3

Purpose and Business Scope

Article 8 Purpose

The purpose of the Hospital will be to strengthen cooperation between the
Parties through undertaking joint efforts, introducing internationally advanced
medical organization management experiences, management and service patterns,
and importing internationally advanced medical equipment and technology in order
to provide the highest standards in the provisions of medical and health care to
foreigners and Chinese in Shanghai and other parts of China, and to promote the
development of medical services in China and get satisfied mutual economic
benefit. The Parties will also enter into academic exchanges covering new
diagnostic technology and management methods in order to create a base for
developing international cooperation in the medical field of service.

Article 9 Business Scope and Scale

The Hospital shall provide medical and health care to foreigners and Chinese in
China

The Hospital shall include the following diagnostic and treatment areas:
Emergency treatment, gynecology and obstetrics, paediatrics, anaesthetics,
paediatric surgery, preventative health care, lab services, medical imaging,
internal medicine, surgery, GP, ophthalmology, traditional Chinese medicine,
stomatology/dental medicine, psychiatry, dermatology, ENT.

The Scope of the Hospital: the Hospital will set up 80-100 inpatient beds,
including 15-20 family style birthing rooms, 20 dental chairs. The number of
impatient beds and dental chairs may be increased to meet future needs.

Article 10 Branch Organization

Under permitting conditions of the Chinese laws and provisions concerned, the
Hospital may, after receiving the approval of the Board of Directors of the
Hospital and examination and approval from the relevant Chinese government
organizations, establish branch organizations within China.

Chapter 4

Total Investment and Registered Capital

Article 11 Total Investment

The total investment of the Hospital will be the equivalent of 8,000,000 USD
(eight million US dollars).

Article 12 Registered Capital and Borrowing Authority

(1) The registered capital of the Hospital shall be the equivalent of 4,120,000
USD (four million one hundred and twenty thousand US dollars) in the form of
cash. The remainder of the total amount of investment set forth in Chapter 4,
Article 11, including amounts as required for working capital and other
expenses, shall be raised by way of funds borrowed by the Hospital.

(2) Party A shall provide the following to the Hospital as its cooperative
conditions:

i. In accordance with the Lease Agreement between the parties, under the
conditions of Party B's or the Hospital's fulfilling the Agreement, the Party A
shall make available Building #5 (which it owns), for rental by Party B

to be used in the course of the Hospital's operation.

ii. Party A agrees to contribute to the Hospital the equivalent registered
capital in RMB of 120,000 US dollars in the form of cash. The exchange of USD
into RMB shall be calculated according to the rate quoted by the

People's Bank of China for the relevant currency on the date of the
contribution. 100% of the registered capital

contributed by Party A will be paid within 90 days of the issuance of the
business licence.

(3) Party B agrees to invest the registered capital of 4,000,000 USD to the
Hospital. 15% of the registered capital contributed by Party B will be paid
within 90 days of the issuance of the business licence, and payment of all the
remaining capital will be completed within 24 months of the issuance of the
business license.

(4) Payment of the capital will be administered in accordance with the relevant
laws of the People's Republic of China.

(5) After payment of the registered capital has been completed, the Patties will
arrange for the issuance of a

verification document by an accountant registered in China.

(6) In the event that the Board of Directors of the Hospital determines that it
is desirable for the Hospital to borrow funds, the General Manager/President of
the Hospital (`The General Manager/President") shall, within the limits of his
authority as defined by the Articles of Association and by the Board, arrange
for the Hospital to borrow such funds from a financial institution within or
outside China.

Article 13

Increases in Registered Capital

The registered capital of the Hospital can be increased only where (a) the
written approval of both parties has been obtained, (b) the unanimous approval
of the Board of Directors has also been obtained and (c) approval of the
relevant authorities.

Chapter 5

Transfer of Investment

Article 14 Limitation of Investment Transfer

Subject to the relevant laws, rules and provisions of the People's Republic of
China and the provisions of this Chapter, during the term of this Contract, no
Party may sell, assign, pledge, or otherwise dispose of (each a "transfer") all
or any part of its interest in the Hospital without the prior written consent of
the other Party (which consent shall not be unreasonably delayed or withheld)
and the approval of the Examination and Approval Authority.

Article 15 Written Consent

When a Party wishes to transfer all or any part of its right and interest in the
Hospital to a third party, it must receive the prior written consent of the
other Party. The Party wishing to transfer all or part of its right and interest
in the Hospital (the "Transferor Party") shall give written notice to the other
a party stating its wish to make such transfer, proportion of right and interest
it wishes to transfer, the price of such right and interest and the identity of
the proposed transferee. The other party shall have the right of first refusal
to purchase such right and interest on terms no less favorable than those
offered to or by such intended transferee. Within 30 days after notice to such
effect from the Transferor Party, the other Party shall deliver its response
stating whether it chooses to exercise its right to purchase the Transferor
Party's right and interest in the Hospital. If the other Party fails to respond
to such notice of intent to transfer within the aforementioned 30-day period, it
shall be deemed to have given its prior written consent to the Transferor
Party's transfer of its right and interest to the intended transferee on the
terms set forth in the above-mentioned notice.

Article 16 Transfer to Related Party

Notwithstanding the foregoing, the Parties agree that any Party may transfer all
or any part of its right and interest in the Hospital to its parent or majority
owned subsidiary company.

Article 17 Assistance with Approvals

Each Party agrees to assist in applying to the Examination and Approval
Authority with regard to the approval of any transfer pursuant to this Article.

Article 18 Responsibility of a Transferee

Any transferee of right and interest in the Hospital shall assume the
corresponding obligations and

responsibilities of the Transferor Party as stipulated in this Contract.

Article 19 Cancellation Upon Transfer

Upon any transfer by a Party of all or any part of its right and interest in the
Hospital pursuant to this Article,

the Transferor Party shall turn in to the Hospital for change and cancellation
its investment certificate issued by the Hospital, if applicable.

Chapter 6

Responsibilities of the Parties

Article 20 Responsibilities of Party A

In addition to other duties set forth in this Contract, Party A also shall have
the following responsibilities:

(1) to assist the Hospital in handling the business license and all other
necessary approvals, licenses and permits for the Hospital;

(2) to assist the Hospital in handling medical waste discharge and to provide
necessary medical technical support upon request;

(3) to assist the Hospital in obtaining permits for imported equipment,
instruments, raw materials, and other goods, as well as assist in handling
customs clearance matters;

(4) to supply the necessary documents so the Hospital may arrange for foreign
staff their entry visas, residence permits and work permits;

(5) to use its best efforts to obtain for the Hospital all preferential tax
treatment within local and national laws and regulations;

(6) to provide to the Hospital and Party B copies of the relevant national and
local laws and regulations, notices, and any other information pertaining to the
Hospital and the parties;

(7) under the legal operating conditions of the Hospital, if an event occurs
which would have a detrimental effect upon the Hospital or Party B, Party A
should make its best effort to protect the rights and interests of the Hospital
or Party B;

(8) to assist the Hospital in arranging for or renewing relevant insurance
coverage within China;

(9) to assist the Hospital in handling relevant bank, financial, tax and supply
issues;

(10) to assist in such other matters as requested by the Hospital to the extent
the requested party deems it appropriate.

(11) The costs of handling the said matters will be bore by the Hospital or
Party B.

Article 21 Responsibilities of Party B

In addition to other duties set forth in this Contract, Party B shall also have
the following responsibilities:

(1) to loan money to the Hospital to cover agreed pre-operation expenses and
initial working capital requirements;

(2) to assist, in accordance with relevant Chinese government guidelines, the
Hospital in supplying modern equipment, spare parts, services, goods, raw
materials, and all types of medicines needed by the Hospital;

(3) to assist the Hospital in obtaining qualified management, technical and
medical staff as well as corresponding services;

(4) to assist the Hospital and foreign experts to establish contact and enter
into academic exchanges with concerned medical organizations;

(

5) to supply medical equipment and consumable to the Hospital on favorable
terms;

(6) to assist in the development of a modern management structure for the
Hospital, including the establishment of medical operation system, medical
records management system, required inventory control systems, bookkeeping
systems, financial administration systems, training and quality control systems;

(7) to assist the Hospital to arrange for or renew insurance coverage outside
China;

(8) to arrange for the opening of any foreign currency bank accounts required
outside China;

(9) to assist in the arrangement for Chinese personnel of the Hospital to visit
the United States for the purpose of technical training, work and other
activities, and making travel, lodging and visa arrangements in connection with
such visits;

(10) to assist in such other matters as requested by the Hospital to the extent
the requested party deems appropriate.

(11) The costs of handling the said matters will be bore by the Hospital.

Article 22 Service Agreement

The Parties agree that the Hospital will enter into a separate service agreement
with the respective Parties, which stipulate that the Parties shall provide the
necessary services and assistance to the Hospital during the term of the
Hospital's operation. And the Hospital will pay the Parties service fee in this
connection.

Chapter 7

Board of Directors

Article 23 Composition of Board

The Board of Directors of the Hospital shall be composed of five directors, of
whom two directors shall be appointed by Party A, and three directors shall be
appointed by Party B. Except as set forth in Article 24 of this Chapter, the
term of office of directors shall be three years, renewable upon reappointment
by the appointing Party.

Article 24

Limitation of Term

(1) The term of any director who is an employee of Party A or Party B, or
companies or work units affiliated with Party A or Party B, will expire when
said director leaves such employment, whether by death, retirement, or other
termination of employment. In addition, a board member may be removed at any
time by the party which appointed him or her. In such a case, a written
notification must be provided to the other party and to the Chairman of the
Board of Directors.

(2) If a seat on the Board of Directors becomes vacant, the party that
originally appointed the board member shall appoint a new member within thirty
days to complete the remainder of the vacant member's term.

Article 25

Chairman and Meetings

(1) Party B shall appoint a board member to assume the post of chairman of the
board, who will be the Hospital's legal representative. When the chairman of the
board cannot fulfill his or her duties, another board member will be authorized
by the chairman of the board (or by Party B if the chairman is unable to perform
this designation) to fulfill the duties of the position for such time as is
required.

(2) The first meeting of the Board of Directors shall be convened within one
month after the Hospital is issued its operating license .

(3) Regular meetings of the board shall be convened once each year. Meetings
shall be called and presided over by the Chairman. Special meetings of the board
shall be convened by the Chairman at any time on a motion of two or more
directors. All directors shall be notified ten days prior to the convening of a
board meeting. Furthermore, a request by two or more board members may add
discussion items to the board meeting agenda. The minutes of all board meetings
shall be kept on file.

(4) If a member of the Board of Directors cannot attend a board meeting, he or
she can authorize another board member to vote at the meeting on his or her
behalf. Such authorization must be in writing, can only be to another board
member, and is limited to the particular meeting in question.

(5) Four members of the board (either in person, or by written authorization to
another board member as described in paragraph (4) above), are required for a
quorum in order to hold a meeting. Except for the issues listed below in Article
26, decisions of the board are made by majority vote of those present and voting
(in person or by proxy) at a meeting.

Article 26 Unanimous Decisions

Resolutions on the following issues may by adopted only by unanimous approval of
all the directors (in person or through representation by another board member)
in attendance at a board meeting:

(1) Any amendment of the Hospital 's articles of association;

(2) Any increase, transfer, sale, assignment or other decision relating directly
to the Hospital's registered capital;

(3) Any merger of the Hospital with another economic organization;

(4) Dissolution or suspension of the Hospital.

Chapter 8

Management and Organization

Article 27 Structure

The Hospital shall establish an operations management structure, to be
responsible for the management of the Hospital 's day-to-day work. The
management structure of the Hospital will consist of a hospital General
Manager/President and other management personnel. The Board of Directors of the
Hospital may add additional positions to the management structure in the future
in the light of request.

Article 28 Hospital General Manager/President

The hospital General Manager/President shall be appointed by the Board of
Directors. The duties of the General Manager/President shall be to implement the
various resolutions of the Board of Directors and to organize and direct the
day-to-day operations of the Hospital as more fully provided in the Articles of
Association as well as give a regularly set work report to the Board of
Directors. And the General Manager/President shall be responsible and subject to
the Board of Director.

Article 29 Limitation Term

The appointment and removal, and the term of the office of the Hospital General
Manager/President shall be determined by the Board of Directors.

Chapter 9

Business Forecast and Budget

Article 30 Annual Business Plan and Budget

The General Manager/President is responsible for the preparation of the
Hospital's annual business plan and budget and for presenting them to the Board
of Directors for approval. The business plan and budget should be presented in
January of each year, should contain complete and detailed information and
should contain detailed information on the following issues:

(1) Proposed purchases of equipment or other assets;

(2) Complete projections on sources and uses of funds;

(3) Proposed activities for the year;

(4) Budget for the coming year with projected revenues and expenditures;

(5) Plans for employee training for the year;

(6) Foreign exchange balance plan;

(7) Proposed policy guidelines for consideration by the board;

(8) Any plans for expansion;

(9) Plan for capital investments and dispositions and borrowings.

Chapter 10

Site

Article 31 Site of Operation

Party A shall lease the site for the operation of the Hospital in accordance
with the Lease Agreement.

Chapter 11

Supply of Materials and Services

Article 32 Supply of Materials and Services

The parties have agreed that the Hospital should meet international standards.
Accordingly, materials and services related to the construction and operation
must meet rigorous standards comparable to standards applicable to similar
facilities in the United States or European countries. Where Chinese goods and
services can meet these standards, such goods or services can be purchased in
China. When required to meet standards or for other technical or economic
reasons, the supply of such materials and services will be acquired through
channels outside China.

 

Chapter 12

Labor Management

Article 33 Legal Requirements

The Hospital will comply with the requirements of China's Labor Law and
regulations issued thereunder and arrange worker insurance and welfare expenses,
trade union, and other matters covered by Chinese law and regulations.

Article 34 Labor Contracts

The Hospital will sign labor contracts with its employees. Each labor contract
shall include the agreement reached between the Hospital and the employee in
question concerning the type of work, technical ability and total wages of such
employee (including but not limited to bonuses, housing subsidies and welfare
benefits). Increases in wages and bonuses shall be determined by the Board of
Directors upon the recommendation of the General Manager/President.

Article 35 Worker Safety

The Hospital shall be sensitive to the issues related to worker safety and shall
take appropriate measures to create a safe working environment, in accordance
with relevant laws and regulations of the Chinese government.

Article 36 Hiring and Dismissal of Employees

The Hospital shall have the right directly to recruit, hire and dismiss both
expatriate and local staff and workers, as set forth in more detail in the
Articles of Association. In all cases, the Hospital shall employ only those
staff and workers who are qualified for the assigned responsibilities.

Chapter 13

Finances and Accounting

Article 37

Accounting System

(1) The Hospital shall establish a financial and accounting system in accordance
with the requirements of Chinese laws and regulations relating to the adoption
of accounting systems for joint venture undertakings. To the extent permitted by
applicable law, the accounting system shall utilize methods and principles that
are consistent with or most nearly approximate generally accepted international
accounting principles. The financial and accounting system shall be consistent
with the accounting system utilized by Party B to the extent permitted by law.
The financial and accounting system shall be implemented after being approved by
the Board of Directors, and shall be filed with the relevant Chinese government
departments for the record.

(2) Financial statements prepared for the Hospital shall be prepared in Chinese
and English, shall be true and complete and shall fairly represent the financial
position of the Hospital as of the date of each such statement and the results
of operations for the fiscal period covered thereby. Financial reporting to be
made available to the Board of Directors and to representatives of the Parties
shall be undertaken in accordance with international standards and shall include
quarterly and annual reports

consistent in form and content with those of Party B.

(3) The Hospital will in principle adopt Reminbi as the standard currency for
the keeping of accounts. The conversion of foreign currencies into Reminbi shall
be calculated according to the rate quoted by the People's Bank of China for the
relevant currency on the date of the relevant transaction, unless the parties
agree on and applicable law permits the use of another exchange rate for such
conversions.

Article 38 Auditing

(1) The Board of Directors of the Hospital shall select an independent auditor
who shall be an accountant registered in China who is capable of performing
accounting work meeting both Chinese domestic accounting standards and
international standards. The Board of Directors shall obtain the advice of the
independent auditor in structuring the Hospital's financial office, including
advice regarding appropriate numbers of personnel, required levels of expertise
and training, and other issues. The independent auditor will be responsible for
reviewing the Hospital's year end financial reports and for auditing the income
(profit and loss) statement and the balance sheet. The Chinese and English
reports on the audit shall be given to the Parties, the Board of Directors and
the relevant departments of the PRC government.

(2) All account books of the Hospital shall be made available for inspection or
audit by either party or its designated representative at any time.

Article 39

Bank Account and Foreign Exchange

(1) The Hospital shall open a foreign exchange account and Reminbi account with
bank established in Shanghai. The Hospital may also open foreign currency
accounts outside of the PRC to the extent and in the manner allowed by PRC
foreign exchange regulations.

(2) The Hospital's foreign exchange transactions shall be carried out in
accordance with the foreign exchange management laws and regulations of the PRC.

Article 40 Fiscal Year

The fiscal year of the Hospital shall begin on January 1 (or on the
Establishment Date in the case of the first fiscal year) and end on December 31
of each year (or, in the case of the final fiscal year, on the date of
expiration of this Contract or earlier dissolution of the Hospital in accordance
with the provisions of this Contract).

Article 41

Profit Distribution

(1) The Board of Directors will, in its discretion, and as required by its
independent accountant, under the condition of being in conformity with laws and
regulations of the PRC, decide upon amounts to be allocated for reserve funds,
employee bonuses, welfare funds and development funds. Unless otherwise directed
by the board, or required by the Hospital's independent accountant, the total
amount of these funds will not exceed 15% of the annual after-tax profits.

(2) After payment of taxes and allocation of the funds listed above in paragraph
1, the Hospital's after-tax net profit will be utilized for the purposes as
determined by the Board of Directors, including business expansion. This amount
will be split once a year between Party A and Party B, with Party A receiving
30% and Party B receiving 70%. If the Hospital is responsible for previous
losses, such losses must be repaid prior to the computation of available profits
for reinvestment or for distribution.

Article 42 Payment

Party A hereby agrees that it will do everything possible within its power to
assist the Hospital to pay Party B all of its U.S. Dollar revenue payments on
time, and, after obtaining the approval of the State Foreign Exchange Control
Bureau and adhering to the requirements of Chinese tax and foreign exchange
regulations, to remit foreign exchange out of China.

Chapter 14

Taxation and Insurance

Article 43 Hospital Taxes

The Hospital shall pay taxes and customs duties in accordance with the
requirements of applicable Chinese laws. The Parties shall apply to obtain the
benefits for the Hospital, the Parties and all of their employees of all of the
applicable tax exemptions, reductions, privileges and preferences of the PRC.

Article 44 Individual Income Taxes

Employees of the Hospital shall pay individual income tax according to the
Individual Income Tax Law of the Peoples Republic of China.

Article 45 Insurance

The Board of Directors will endeavor to ensure that the Hospital has adequate
insurance coverage to protect the Hospital, the Parties, and the Hospital's
employees from losses. The Hospital shall obtain property insurance, property
liability insurance, professional liability insurance, and such other insurance
as is, in the judgment of the Board of Directors, required for the protection of
the Hospital, its personnel and its patients and customers.

Chapter 15

Confidential Information

Article 46 General Requirement of Confidentiality

Both Parties agree that, once the Hospital is established, much of the
information which is developed will be of a confidential nature and should be
protected accordingly by each of the Parties. In addition, where information is
to be released to the public, the Parties should consult on the appropriate
timing and method of release and should arrange to keep the information
confidential until said release. In addition, prior to establishment of the
Hospital the Parties should keep all contract discussions and information
related to the Hospital's establishment and operations confidential.

Article 47 Related Organizations

The Parties shall endeavor to ensure that the confidentiality requirements
stated in Article 46 of this Chapter are complied with by subsidiaries and
related companies as well as by others to whom such information becomes
available.

Article 48 Employees

Both Parties shall take appropriate steps to ensure that employees of their
organizations and of related organizations understand the importance of
confidential treatment as described above and comply with guidelines relating to
confidentiality.

Chapter 16

Term of the Joint Venture

Article 49 Term

The term of cooperation of the Hospital shall be 18 years from the establishment
date, or such earlier period if the contract is terminated earlier in accordance
with the provisions of Chapter 17.

Article 50 Extension of Term

Prior to the expiration of the originally set term of this Contract, or any
extension thereof, the term may be extended upon the agreement of the Parties,
subject to approval by the Examination and Approval Authority. Negotiations for
such extension shall begin not later than one year prior to the expiration of
the originally set term (or extension thereof) of this Contract and, subject to
the successful conclusion of such negotiations, an application for extension
shall be filed with the Examination and Approval Authority not later than 180
days prior to the expiration of such term or extension.

Chapter 17

Dissolution and Liquidation

Article 51 Reasons for Dissolution

The Hospital shall be dissolved and this Contract terminated in accordance with
the procedures set forth in the Law on ChineseForeign Contractual Joint
Ventures, the relevant laws of the PRC and the Articles of Association of the
Hospital (1) upon expiration of its original term or any extension thereof, or
(2) if any of the conditions or events set forth below shall occur and be
continuing, in which case the Parties shall cause their representatives on the
Board of Directors, upon motion by either Party, to unanimously adopt a
resolution to dissolve the Hospital:

(1) Inability to continue operations because of heavy losses suffered by the
hospital;

(2) Inability to continue operations because of an event of Force Majeure (as
defined in Chapter 19);

(3) Failure of either Party to perform its obligations under this Contract if,
in the reasonable opinion of the non-breaching Party, such non-performance
defeats the economic objectives of this Contract and of the establishment of the
Hospital or creates a material risk of loss to such non breaching Party or
materially and adversely affects the value of its interest in the Hospital;

(4) Failure of any Party to make its contributions in accordance with the
provisions of Chapter 4 of this Contract, where such failure continues for a
period of more than three months;

(5) Failure of Party A, Party B or the Hospital to fulfill the Lease Agreement,
so that the Lease Agreement is terminated.

(6) Effective exclusion of any Party or its representatives from participation
in the Board of Directors;

(7) Expropriation or requisition of all or a material portion of the assets or
property of any Party or the Hospital in China, or in the event that the PRC
government requires a reduction in Party B's right and interest in the Hospital;

(8) The suffering by the Hospital of consistent losses over an extended period
of time and the accumulation of substantial debt as a result thereof;

(9) The bankruptcy of the Hospital or either of the Parties, or the dissolution,
termination or cessation of operation of either party or the Hospital;

(10) The development of an unexpected situation in which the hospital has no
effective way of operating;

(11) Mutual agreement of the Patties to dissolve the Hospital.

Article 52 Liquidation Committee

(1) If, upon the scheduled expiration of the term of the Hospital's business
license or upon any earlier proposed dissolution of the Hospital, neither Party
wishes to continue the Hospital's business either on its own or together with a
third party, the Board of Directors shall adopt a resolution to liquidate the
Hospital, formulate liquidation procedures and principles, establish a
liquidation committee, and submit its proposals to the department in charge for
verification. The department in charge shall supervise the liquidation of the
Hospital, which shall proceed in accordance with the relevant laws of the PRC,
the provisions of this Contract and the Articles of Association concerned.

(2) The Liquidation Committee shall be composed of three people, one assigned by
Party A and two assigned by Party B. Either Party may designate an outside
expert or experts to serve on the Committee, so long as Chinese law permits. The
Board of Directors will report the composition of the Liquidation Committee to
the department in charge.

(

3) The Liquidation Committee shall proceed pursuant to a liquidation plan and
the Committee will do its best to obtain the highest value for its assets.

(4) The first priority in expenditure of funds obtained in the liquidation
process is the repayment of the Hospital's debts. A reasonable portion of
available proceeds is to be designated for the expenses of the Liquidation
Committee, including consulting fees if applicable.

(5) Once debts and direct expenses of the Liquidation Committee have been paid,
100% of the remainder goes to Party B.

(6) Once the liquidation procedure is completed, the Liquidation Committee
should deliver the final report approved by the Board of Directors to the
examination and approval authority, return the Hospital's operating license to
the original registration organ, and complete all other procedures to cancel the
registration of the Hospital. The Hospital's original books and other documents
shall be given to Party B for storage.

Chapter 18

Liability for Breach of Contract

Article 53 Liability for Breach of Contract

Should all or part of the Contract be unable to be fulfilled owing to the fault
of one party, the breaching party shall bear the responsibilities thus caused.
Should it be the fault of both parties, they shall bear their respective

responsibilities according to actual situations.

 

Chapter 19

Force Majeure

Article 54 Suspension of Obligations

When the obligations of a Party under this Contract cannot be performed in full
or in part according to the

agreed terms as a direct result of an event that is unforeseeable and of which
the occurrence and consequence cannot be prevented or avoided, such as
earthquake, typhoon, flood, fire and other natural disasters, and other
uncontrollable events, the duties of both Parties as set forth in this Contract
(except for the duties regarding confidentiality in Chapter 15), will be
suspended.

Article 55 Notification

The Party which maintains that an event of Force Majeure has occurred shall
immediately notify the other Party and provide appropriate evidence of the
uncontrollable incident and its duration or estimated duration.

Article 56 Consultation

h F t1

If an event of Force Majeure occurs, both Parties should immediately consult
each other and seek appropriate resolution and make every effort to mitigate the
negative impact created by the event.

Chapter 20

Dispute Resolution

Article 57 Consultation

Any dispute, controversy or claim arising out of or relating to this Contract,
or the interpretation, breach, termination or validity hereof, shall be resolved
through friendly consultation. Such consultation shall begin immediately after
one party has delivered to the other Party a written request for such
consultation. If within 60 days following the date on which such notice is
given, the dispute cannot be resolved, the dispute shall be submitted to
arbitration upon the request of any Party, with notice to the other Party.

 

Article 58 Arbitration

 

Arbitration shall be conducted before the Shanghai Branch of the China
International

 

Economic and Trade Arbitration Commission in accordance with the procedural
rules for arbitration of the

Arbitration Commission. The following conditions apply to any arbitration:

(1) All arbitration proceedings shall be conducted in English and Chinese and
during the proceedings all

documents shall be prepared beforehand in Chinese and English;

(2) There will be one arbitrator who shall be fluent in English;

(3) During the arbitration proceedings the English version of this Contract will
serve as a

reference for the arbitrator;

(4) The arbitrator's final ruling will have binding effect for both parties.
Allocation of the costs of arbitration will be decided by the arbitrator.

Chapter 21

Miscellaneous

Article 59 Waiver of Rights

A Party that in a particular situation waives its rights in respect of a breach
of contract by the other party shall not be deemed to have waived its rights
against the other Party for a similar breach of contract in other situations.

Article 60 Transferability

Neither Party may transfer all or part of this Contract or its rights or
obligations under the Contract with the express written consent of the other
Party and applicable government approvals.

Article 61 Refraining from Competition

In order to ensure the Parties' interests, so long as this Contract remains in
full force and effect, Party A and Party B guarantee that under no circumstances
will either establish in Changning District, Shanghai, another similar
freestanding, wholly-owned, contractual joint venture, or equity joint, venture
Hospital that competes with the Hospital established pursuant to this Contract
except as an expansion of this Hospital.

Article 62 Binding Force

This Contract cannot be changed by verbal agreement. It can be amended only by
written instrument signed by the authorized representative of each of the two
Parties and must obtain the approval of the relevant Chinese approval authority.

Article 63 Validity

If any part of this Contract is found to be invalid this fact does not affect
the validity of the remaining provisions of the Contract.

Article 64 Language

This Contract shall be written in a Chinese version and an English version. Both
language versions shall have equal validity and effect.

Article 65 Notice

Notices or other communications required to be given by either Party or the
Hospital pursuant to this Contract shall be sent in letter form by registered
airmail or international courier service or by facsimile to the address of the
other Party set forth below or to such other address as may from time to time be
designated by the other Party through notification to such Party, and to the
Hospital at its legal address as in effect from time to time. Notice sent by way
of registered airmail shall be deemed effectively given on the signature date of
the receipt for the

registered letter; or on the tenth day after delivery to an internationally
recognized courier service; Notice sent by fax

will be deemed received within two working days of the date it was sent. The
names and addresses for official notifications are as follows:

Party A: Mr./Ms.

#1111, Man Xia Road, Shanghai 200336, PRC

Phone: 86-21-6290-9911

Fax: 86-21-6290-6478

Party B: Ms. Roberta Lipson, President

or Mr. Robert Goodwin, Executive Vice President

U.S.-China Industrial Exchange, Inc.

7201 Wisconsin Ave.

Bethesda, MD 20814, U.S.A.

Phone: 301-215-7777

Fax: 301-215-7719

Article 66 Entire Agreement

This Contract and its attachments constitute the entire agreement between the
Parties. It replaces all previous meeting minutes and agreements between the
Parties.

Article 67 Examination and Approval

This Contract must be examined and approved by the Ministry of Foreign Trade &
Economic Cooperation, PRC.

This Contract is executed by the representatives of the Parties on February 8,
2002 in Shanghai, China.

 

 

 

 

 

 

 

For Party A For Party B

Shanghai Changning District Central Hospital U.S. - China Industrial Exchange,
Inc.

 

 

 

 

_________________________________ _________________________________

Xu Wei Ren Roberta Lipson

President Chairman of the Board, President, CEO