EXHIBIT
        41

       

      AGREEMENT
        ON

       

      EQUITY
        TRANSFER

       

      AND

       

      CAPITAL
        INCREASE

       

      BETWEEN

       

      WINNER
        GROUP LIMITED

       

       

      AND

       

       

      LOHMANN
        & RAUSCHER LIMITED, Hong Kong

       

      


       

      Project:
        Winner Xishui / PRC

       

      


       

       

      BEITEN
        BURKHARDT

      Hong
        Kong
        Office

      14th
        Floor • Hong Kong Diamond Exchange Building

      8-10
        Duddell Street • Central • Hong Kong

      Tel
        + 852
        2524 6468 • Fax + 852 2524 7028

      Email
        :
        BBLAW-HONGKONG@BBLAW.DE

      


      


      


      


      


      


      


      


      


      


      Dated
        : 8
        April 2005

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      


      This
        Agreement on Equity Transfer and Capital Increase ("Agreement") is made and
        entered into on 8 April, 2005 between:

       

      
        	
                (1)

              	
                WINNER
                  GROUP LIMITED, a company incorporated in the Cayman Islands whose
                  registered office is situated at Scotia Centre, 4m Floor, P.O.
                  Box 2804,
                  George Town. Grand Cayman, Cayman Islands ( "Seller");
                  and

              


      

       

      
        	
                (2)
                  

              	
                LOHMANN
                  & RAUSCHER LIMITED, a company incorporated in Hong Kong whose
                  registered office is situated at 14/F, Hong Kong Diamond Exchange
                  Building, 8-10 Duddell Street, Central, Hong Kong
                  ("Buyer").

              


      

       

      (the
        Seller and the Buyer hereinafter collectively referred to as the "Parties",
        and
        if the situation requires, in the singular form referred to as the
        "Party").

       

      PREAMBLE

       

      
        	
                (A)

              	
                Winner
                  Medical & Textile Ltd., Xishui ("Xishui Winner") is a wholly foreign
                  owned enterprise duly incorporated and existing under the laws
                  of the
                  People's Republic of China ("PRO"), registered with the State
                  Administration of Industry and Commerce in Huanggang City of Hubei
                  Province on16 April 2003 with a term of 15 years commencing from
                  9 April
                  2003. A copy of Xishui Winner's business license is attached hereto
                  as
                  Annex 1.

              


      

       

      
        	
                (B)

              	
                The
                  Seller holds 100 percent of the equity interest in Xishui Winner
                  in
                  accordance with the Articles of Association of the
                  WFOE.

              


      

       

      
        	
                (C)

              	
                Xishui
                  Winner has been registered with a total investment of US$ 4.300,000,
                  and
                  it has a registered capital of US$ 2,420,000.00 of which only
                  US$2,161,600.00 has been contributed by the Seller before 28 February
                  2005
                  resulting in a remaining unpaid balance of US$ 258,400.00 ("Outstanding
                  Capital") as at 28 February 2005.

              


      

       

      
        	
                (D)

              	
                The
                  Seller is willing to sell and the Buyer to purchase sixty percent
                  (60%) of
                  the equity interest in Xishui Winner ("Equity"), and the Parties
                  will
                  thereby become the two shareholders of Xishui Winner on the terms
                  set out
                  in this Agreement.

              


      

       

      NOW,
        therefore, the Parties hereby agree as follows: 

       

      ARTICLE
        1

       

      TRANSFER
        OF EQUITY INTEREST

       

      The
        Seller agrees to transfer to the Buyer, and Buyer agrees to acquire the Seller's
        equity interest in Xishui Winner, i.e. 60% of the paid in registered capital
        of
        US$2,161.600.00 (hereinafter referred to as the Transferred Interest") in
        Xishui
        Winner and Buyer hereby accepts Seller's transfer of the equity interest
        in the
        Company to the intent that the benefits rights and obligations of the Parties
        in
        Winner Xishui shall be as follows starting from 1 March 2005 (unless otherwise
        specified to the contrary herein or in the Articles of Association)
        :

      the
        Seller: 40%

      the
        Buyer: 60%

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      ARTICLE
        2

       

      TRANSFER
        PRICE / PAYMENT

       

      	2.1  	
              The
                Parties agree that consideration for the Transferred Interest shall
                be
                determined as follows:

            


       

      	2.1.1  	
              The
                consideration to be paid by the Buyer to the Seller for the Transferred
                Interest transferred by the Seller shall be United States Dollars
                two
                million four hundred thousand (US$ 2,400,000.00) ("Transfer
                Price").

            


       

      	2.1.2  	
              The
                Buyer shall make the payment of the Transfer Price to the Seller
                in a lump
                sum within two (2) working days after the Buyer has received a written
                notice from the Seller informing that all necessary government approvals
                for this Agreement as mentioned in Article 6 have been obtained and
                the
                new business license of Xishui Winner showing its shareholders and
                their
                equity ratio comprised of the Seller (40%) and the Buyer (60%) has
                been
                duly issued together with certified true copies of all relevant supporting
                documents for verification. For the purpose of this Agreement, working
                days shall mean business days in Federal Republic of
                Germany.

            


       

      	2.2  	
              The
                Buyer shall pay any amount due pursuant to Article to the following
                account of the Seller:

            


       

      Account
        Holder: Winner Group Limited

      Bank
        Name: Standard Chartered Bank, Hong Kong Branch 

      Account
        Number: 413-1-068813-0

      SWIFT
        Code: SCBL HK HH

       

      ARTICLE
        3

       

      INCREASE
        OF AND CONTRIBUTION TO THE REGISTERED CAPITAL

       

      	3.1  	
              The
                Parties have estimated that an additional capital of US$ 400,0 shall
                be
                required for the following purpose:

            


       

      	3.1.1  	
              construction
                and fitting cost of a new warehouse at the premises of Xishui Winner
                shall
                be around US$ 350,0; this is a capital investment;
                and

            


       

      	3.1.2  	
              purchase
                of additional equipment and storage facilities for the new warehouse
                mentioned in Article ; costs shall be around USS 0; this is a capital
                investment

            


       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      	3.2  	
              Both
                Parties unanimously agreed that they shall jointly increase the capital
                of
                the Xishui Winner by US$ 400,0 based on the registered and fully
                paid up
                capital of US$2,161,600 so that the registered capital of Xishui
                Winner
                will increase to US$2,561,6. Since Xishui Winner has already completed
                the
                procedure for registration of US$2,420,000 as its registered capital
                with
                local government departments, it only has to apply with the government
                department for a capital increase of US$141,600 ("Additional Capital")
                after the transfer of equity interest.

            


       

      	3.3  	
              The
                Outstanding Capital together with the Additional Capital shall form
                the
                amount to meet the purpose mentioned in Article
                .

            


       

      	3.4  	
              The
                Parties shall contribute the Outstanding Capital and Additional Capital
                in
                the following manner:

            


       

      	3.4.1  	
              The
                Seller shall contribute 40%, amounting to United States Dollars one
                hundred and sixty thousand (US$ 160,000) in cash and remit such amount
                to
                the Xishui Winner's bank account in the following manner
                :-:

            


       

      US$160,0
        in March 2005; in fact, the Seller has already paid in a sum of US$258,4
        as
        capital to Winner Xishui and has arranged capital verification procedure.
        This
        means that the Seller has already prepaid a sum of US$98,4 as capital on
        behalf
        of the Buyer.

       

      	3.4.2  	
              The
                Buyer shall contribute 60%, amounting to United States Dollars two
                hundred
                and forty thousand (US$ 240,0) in cash and remit a sum of US$ 141,6
                to the
                Xishui Winner's bank account within 30 calendar days after receiving
                a
                written notice of the change of Winner Xishui's business licence
                and in
                any event no later than 30 days after the Effective Date. In view
                that the
                Seller has already prepaid a sum of US$98,4 as registered capital
                for the
                Buyer, so the Buyer shall directly remit that part of capital in
                a sum of
                US$98,4 to the designated account of the
                Seller.

            


       

      	3.5  	
              Upon
                making of the above, the Seller will hold 40% of the registered capital
                equivalent to United States Dollars one million twenty-four thousand
                six
                hundred and forty (US$ 1,024,6) and the Buyer will hold 60% of the
                registered capital equivalent to United States Dollars one million
                five
                hundred thirty-six thousand nine hundred and sixty (US$ 1,536,9)
                of Xishui
                Winner.

            


       

      	3.6  	
              Save
                as otherwise provided under Article 3 or in the revised Articles
                of
                Association of Xishui Winner, neither party is obliged to provide
                any
                financial assistance to Xishui Winner and any future financing matters
                shall be determined in accordance with the provision under the revised
                Articles of Association of Xishui Winner based on the business needs
                of
                Xishui Winner.

            


       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      ARTICLE
        4

       

      OTHER
        SPECIAL AGREEMENT

       

      	4.1  	
              The
                Seller shall: 

            


       

      	4.1.1  	
              be
                solely responsible for all debts and liabilities of Xishui Winner
                existing
                or accrued before 1 March 2005;

            


       

      	4.1.2  	
              entitled
                to all receivables of Xishui Winner existing or accrued before 1
                March
                2005;

            


       

      	4.1.3  	
              undertake
                to keep Xishui Winner indemnified for any debts or liabilities accrued
                before 1 March 2005 if such debts or liabilities are not duly settled
                before 1 March 2005; and

            


       

      	4.1.4  	
              pay
                in cash to balance the loss and the pre-operating expenses of Xishui
                Winner up to 28 February 2005 to become zero on the basis that the
                amortization of the relevant costs shall not be beyond 28 February
                2005
                and if this is not permissible under PRC accounting rules, then the
                Seller
                agrees to make special provision under the financial statements in
                order
                to achieve the same effect as if no loss will be carried forward
                to the
                period starting from 1 March 2005.

            


       

      	4.2  	
              The
                Parties further mutually agree as
                follows:

            


       

      	4.2.1  	
              to
                continue with the use of the current Chinese name of Xishui Winner
                NNW
                i.e. Wen Jian in Chinese) but shall rename the English name of Xishui
                Winner to "L+L Healthcare Hubei Co. Ltd";

            


       

      	4.2.2  	
              the
                management structure and the appointment of key personnel of Xishui
                Winner
                shall be in accordance with the provision stipulated under the revised
                Articles of Association of Xishui Winner;

            


       

      	4.2.3  	
              matters
                requiring unanimous consent of the Parties and the board of directors
                shall be in accordance with the provision stipulated under the revised
                Articles of Association of Xishui Winner;

            


       

      	4.2.4  	
              the
                business, sales, pricing and non-competition issues in accordance
                with the
                provision stipulated under the revised Articles of Association of
                Xishui
                Winner;

            


       

      	4.2.5  	
              provision
                of operational assistance from Winner Group and Mr. Li Jian Quan
                shall be
                in accordance with the provision stipulated under the revised Articles
                of
                Association of Xishui Winner;

            


       

      	4.2.6  	
              transfer
                of equity interest by the Parties shall be in accordance with the
                provision stipulated under the revised Articles of Association of
                Xishui
                Winner;

            


       

      	4.2.7  	
              the
                dividend policy in accordance with the provision stipulated under
                the
                revised Articles of Association of Xishui
                Winner.

            


       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      ARTICLE
        5

       

      AMENDMENTS
        TO THE ARTICLES OF ASSOCIATION

       

      	5.1  	
              As
                per the Effective Date, the Articles of Association including its
                Annexes
                (if any) shall be modified as agreed in the "Third Amendment to the
                Articles of Association of "Winner Medical & Textile Ltd., Xishui ",
                attached as Annex 3 to this Agreement.

            


       

      ARTICLE
        6

       

      CONDITIONS
        PRECEDENT AND CLOSING

       

      	6.1  	
              The
                closing (hereinafter referred to as the "Closing") will be effective
                on
                the date ("Effective Date") that all the conditions precedent (as
                specified in Article through Article ) are
                completed.

            


       

      	6.1.1  	
              The
                board of directors of the Seller and the board of directors of the
                Buyer
                have approved the transactions contemplated by this Agreement. Such
                approvals shall forthwith be attached to this Agreement in the
                Annex
                2.

            


       

      	6.1.2  	
              The
                issuance of an approval certificate by the original examination and
                approval authority stating the shareholding ratio of the Seller and
                the
                Buyer is 40% : 60% as mentioned in Article 1 and the issuance of
                a
                corresponding business license export / import licence, customs
                registration etc. by the responsible registration authority in accordance
                with the applicable laws.

            


       

      	6.1.3  	
              Written
                evidence of the audited financial statements of Xishui Winner for
                the
                period up to 28 February 2005 satisfactory to the Buyer proving that
                the
                Seller has at its own costs equalized the profit and loss of Xishui
                Winner
                to the effect that the opening balance of Xishui Winner is zero as
                at 1
                March 2005.

            


       

      	6.1.4  	
              The
                verification certificate issued by the competent examination authority
                in
                charge of Xishui Winner confirming that the Seller has contributed
                the
                Outstanding Capital.

            


       

      	6.1.5  	
              The
                issuance of an approval certificate by the original examination and
                approval authority stating the registered capital of Winner Xishui
                has
                been increased to US$ 2,561,6 and the issuance of a corresponding
                business
                license by the responsible registration authority in accordance with
                the
                applicable laws.

            


       

      	6.1.6  	
              The
                registration of this Agreement by the relevant PRC authority without
                altering its terms and conditions on any Party unless each Party
                has been
                notified in advance of and consented in writing to such
                alteration.

            


       

      	6.1.7  	
              The
                approval document for the "Third Amendment to the Articles of Association
                of "Winner Medical & Textile Ltd., Xishui", attached as Annex 3 has
                been issued to Xishui Winner.

            


       

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      	6.1.8  	
              All
                the approval documents as mentioned under this Article to have been
                handed
                over to the Parties by the competent examination and approval authority
                in
                charge of Xishui Winner.

            


       

      	6.2  	
              The
                Parties shall use their reasonable endeavors to ensure that the conditions
                precedent to the effectiveness of this Agreement shall be fulfilled
                within
                2 months after the date of this Agreement. In the event that these
                conditions precedent have not been fulfilled within 2 months after
                the
                date of this Agreement or such other later date as the Parties may
                agree
                in writing, then the Buyer may rescind this Agreement in accordance
                with
                Article .

            


       

      	6.3  	
              Each
                Party shall bear the costs incurred in the fulfillment of the conditions
                precedent to the effectiveness of this agreement by each
                Party.

            


       

      ARTICLE
        7

       

      MANAGEMENT
        OF XISHUI WINNER PRIOR TO THE CLOSING

       

      	7.1  	
              The
                Seller undertakes that during the period from the date of execution
                of
                this Agreement until the Closing, the management of Xishui
                Winner:

            


       

      	7.1.1  	
              will
                not engage in any activity or enter into any commitment in this respect
                outside the ordinary course of business of Xishui
                Winner;

            


       

      	7.1.2  	
              will
                carry on the business of Xishui Winner consistently and without
                interruption, in particular with respect to settlement of claims,
                collection of outstanding debts, personnel and related
                costs;

            


       

      	7.1.3  	
              will
                not hire or commit to hire any regular employees unless otherwise
                agreed
                with the Buyer; and

            


       

      	7.1.4  	
              will
                grant the Buyer access to Xishui Winner's books and records, contracts,
                corporate files, lawsuit files and other documents, to the extent
                reasonably required by the Buyer in order to evaluate Xishui Winner's
                business and financial position. The Seller shall notify the Buyer
                of any
                confidentiality obligations owed to third parties and shall communicate
                to
                the Buyer in a reasonable way of the contents of such documents which
                the
                Seller cannot disclose because of such
                obligations.

            


       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      ARTICLE
        8

       

      REPRESENTATIONS
        AND WARRANTIES OF THE BUYER

       

      	8.1  	
              The
                Buyer represents and warrants to the Seller that as of the date hereof
                and
                as of the Closing:

            


       

      	8.1.1  	
              The
                Buyer is a company organized and validly existing under the laws
                of the
                Hong Kong, and has all requisite power and authority to enter into
                this
                Agreement and to consummate the transactions contemplated thereby.
                This
                Agreement constitutes legal, valid and binding obligations of the
                Buyer.

            


       

      	8.1.2  	
              The
                execution of this Agreement, the consummation of the transactions
                contemplated hereby and the fulfillment of the terms hereof will
                not
                result in a breach of any of the terms or provisions of, or constitute
                a
                default under or conflict with, any agreement to which the Buyer
                is a
                party, the Articles of Association/Charter of the Buyer, any decree
                of any
                court or governmental body or arbitrator by which the Buyer is bound
                or
                any law, rule or regulation applicable to the
                Buyer.

            


       

      	8.1.3  	
              All
                consents, approvals, authorizations and other requirements described
                by
                law or otherwise which must be obtained or satisfied by the Buyer
                in order
                to permit the consummation of the transactions contemplated by this
                Agreement have been obtained and
                satisfied.

            


       

      	8.1.4  	
              No
                lawsuit, arbitration or other legal or governmental proceeding is
                pending
                or, to the Buyer's knowledge, threatened against it that would affect
                Buyer's ability to perform its obligations under this
                Agreement.

            


       

      	8.2  	
              If
                any of the representations and warranties assumed by the Buyer in
                Article
                above is totally or partially incorrect, the Buyer shall be liable
                for all
                direct damages incurred by the Seller because of this incorrectness
                or
                breach. The liability for any indirect losses or damages shall be
                excluded.

            


       

      ARTICLE
        9

       

      REPRESENTATIONS
        AND WARRANTIES OF THE SELLER

       

      	9.1  	
              The
                Seller represents and warrants to the Buyer that as of the date hereof
                and
                as of the Closing:

            


       

      	9.1.1  	
              The
                Seller has a good title to the Transferred Equity and good title
                will vest
                with the Buyer upon assignment and transfer of the Transferred Equity
                pursuant to this Agreement, free and clear of restrictions, encumbrances
                or any third party rights whatsoever. The Seller has obtained all
                consents, approvals and authorizations in order to permit the consummation
                of the transactions contemplated by this Agreement. This Agreement
                constitutes legal, valid and binding obligations of the
                Seller.

            


       

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      	9.1.2  	
              The
                execution of this Agreement, the consummation of the transactions
                contemplated hereby and the fulfillment of the terms hereof will
                not
                result in a breach of any of the terms or provisions of, or constitute
                a
                default under or conflict with, any agreement to which the Seller
                is a
                party, the Articles of Association/Charter of the Seller, any decree
                of
                any court or governmental body or arbitrator by which the Seller
                is bound
                or any law, rule or regulation applicable to the
                Seller.

            


       

      	9.1.3  	
              The
                Articles of Association of Xishui Winner and their amendments, enclosed
                in
                the Annex
                4,
                are the currently valid Articles of Association of Xishui Winner.
                The
                revised Articles of Association as agreed between the Seller and
                the
                Buyer, are attached in the Annex
                3.

            


       

      	9.1.4  	
              The
                Seller is not a party to, subject to or bound by any agreement or
                judgment
                or decree of any court or governmental body which would prevent the
                execution or performance of this Agreement including all Annexes
                by the
                Seller or the transfer of the Transferred Equity pursuant to the
                terms in
                this Agreement.

            


       

      	9.1.5  	
              The
                registered capital of Xishui Winner has been fully paid in as described
                in
                Preamble (C)and not been repaid to the Seller in whole or in
                part.

            


       

      None
        of
        the following events will occur between signing of this Agreement and the
        Closing:

       

      
        	 	
                (1)

              	
                transfer
                  of assets of any kind of Xishui Winner to the Seller, and/or any
                  of its
                  affiliates, and/or any third party;

              


      

       

      
        	 	
                (2)

              	
                transactions
                  of Xishui Winner outside its business
                  scope;

              


      

       

      
        	 	
                (3)

              	
                any
                  material changes in the financial conditions, assets, liabilities
                  or
                  business of Xishui Winner as reflected in the Financial Statements
                  for the
                  period up to 28 February 2005 attached in the Annex 5, and no such
                  material adverse change is likely to occur, in particular the Seller
                  guarantees that it will pay in cash to balance the loss of Xishui
                  Winner
                  up to 28 February 2005 to become zero and that on 1 March
                  2005:

              


      

       

      • Cash
        in
        the amount of at least RMB 159,4 is available;

       

      • Inventory
        with a value of at least RMB 1,490,1 exists;

       

      • Trade
        Receivables amount to at least RMB 287,4 ;

       

      • Trade
        Payables amount to not more than RMB 1,078,1

       

      
        	 	
                (4)

              	
                the
                  net profit and loss for the period commencing 1 March 2005 will
                  be pro
                  rata between the Seller and the Buyer based on their shareholding
                  of 40% :
                  60%;

              


      

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      
        	 	
                (5)

              	
                substantial
                  amendments, supplementation or terminations of important agreements
                  of
                  contracts to which Xishui Winner is a party of;
                  or

              


      

       

      
        	 	
                (6)

              	
                an
                  obligation to increase the salary of an employee, including the
                  General
                  Manager of Xishui Winner.

              


      

       

      	9.1.6  	
              Xishui
                Winner is the legal and exclusive owner of the land use rights (basically
                50 years) as described in the state land use right certificate and
                building ownership certificate attached hereto in the Annex
                6.
                Xishui Winner has paid the total amount of the land use right grant
                fees
                and relevant taxes applicable in full, and the respective official
                receipts have been issued to Xishui
                Winner.

            


       

      	9.1.7  	
              All
                of the payment obligations of Xishui Winner arising out of or related
                to
                any tenancy agreements (if any) entered into by Xishui Winner have
                been
                fulfilled.

            


       

      	9.1.8  	
              The
                Annex of this Agreement contains a true, correct and complete list
                of all
                the employees of Xishui Winner and the salaries and wages applicable
                upon
                the execution of this Agreement.

            


       

      	9.1.9  	
              All
                contracts or agreements concluded prior to the signing of this Agreement
                to which Xishui Winner is a party have been performed by Xishui Winner
                pursuant to the contractual terms and
                conditions.

            


       

      	9.1.10  	
              Within
                the time and manner prescribed by law or. if it was not the case,
                without
                ensuing legal effects, Xishui Winner has filed all PRC national and/or
                local tax returns including Individual Income Tax returns for its
                staff
                and personnel and/or tax returns of foreign countries, having jurisdiction
                to levy taxes upon Xishui Winner and Xishui Winner has paid all customs
                duties and social security contributions and social benefits for
                its
                employees (except those "part time jobs" which are more or less free
                of
                social costs under PRC's rules) required by PRC laws and regulations.
                Up
                to the date of the Closing for which taxes, customs duties and social
                security contributions will become due, such taxes, customs duties
                and
                social security contributions have been paid in
                full.

            


       

      All
        taxes, customs duties, other debts or liabilities which become due and payable
        after 28 February 2005 but result from the time before 1 March 2005 will
        be
        borne by the Seller.

       

      No
        fiscal
        issues have been raised in connection with any prior or pending reviews or
        audit
        of said PRC national and/or local or foreign tax return which the Seller
        reasonably believes may be expected to be raised again in the future by such
        tax
        authority.

       

      	9.1.11  	
              No
                action, lawsuit or proceeding to which Xishui Winner is a party (either
                as
                plaintiff, defendant or any type of intervening party) is pending
                before
                any court or governmental agency, authority or body or arbitrator,
                and
                there is no action, suit or proceeding threatened against Xishui
                Winner.

            


       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      No
        order,
        judgment or decree of any court or other tribunal is in existence on the
        date
        hereof and ordering or requiring Xishui Winner to take any action of any
        kind
        with respect to its business, assets, properties.

       

      Xishui
        Winner has duly complied with all environmental requirements under the relevant
        PRC regulations affecting its business. No environmental issue or problem
        is in
        existence on the date hereof and there is no potential action, suit or
        proceeding threatened Xishui Winner to take any action of any kind with respect
        to its business, assets, properties.

       

      	9.1.12  	
              Xishui
                Winner has upon Closing no liabilities or obligations of any nature
                except
                for those arisen from the ordinary course of business and except
                for the
                salaries, wages and other costs related to the employment of the
                employees
                for the calendar month in which the Closing takes
                place.

            


       

      	9.1.13  	
              Xishui
                Winner has not entered into any license agreements (except the item
                mentioned under Article ) whatsoever.

            


       

      	9.1.14  	
              Xishui
                Winner is under no regulations, stipulations or agreements obliged
                to
                erect any other buildings in addition to the existing
                buildings.

            


       

      	9.1.15  	
              There
                are no other contracts resulting in material liabilities and entered
                into
                by Xishui Winner than those listed in this Article
                .

            


       

      	9.1.16  	
              Xishui
                Winner has obtained all valid environmental and operational approvals
                and
                permits (including its own import and export license) required under
                PRC
                law necessary for its legally valid existence and the continuation
                of
                production as defined in its business
                scope.

            


       

      	9.1.17  	
              With
                the exception of the existing license (not in writing) from the affiliated
                company of the Seller to permit Xishui Winner to use the trademark
                [Chinese character] (i.e. Wen Jian in Chinese)"
                as described in the trademark registration certificate attached hereto
                in
                the Annex
                7,
                Xishui Winner does not own any patents, service marks and similar
                industrial property rights and there is no other license agreement
                regarding such industrial property rights and there are no infringement
                claims with respect to such industrial property
                rights.

            


       

      	9.1.18  	
              The
                Seller undertakes that the affiliated company of the Seller will
                provide a
                written license to allow Xishui Winner to use the trademark mentioned
                in
                Article and will provide the Buyer with all necessary filing documents
                upon Closing.

            


       

      Any
        government fees regarding the transfer of the trademarks will be borne by
        Xishui
        Winner.

       

      	9.1.19  	
              The
                fixed and movable assets as listed in the Annex
                8 are
                owned by and in the possession of Xishui Winner and there are no
                fixed and
                movable assets belonging to Xishui Winner but leased to a third
                party.

            


       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      	9.1.20  	
              The
                Seller herewith assigns to the Buyer its 60% of all claims and rights
                which may arise or have arisen against Xishui Winner, including but
                not
                limited to rights to dividends and profits derived out of business
                commencing from 1 March 2005 and the Seller confirms that by virtue
                of
                such assignment the Seller's claims have been reduced to 40% against
                Xishui Winner.

            


       

      	9.1.21  	
              All
                certificates, approvals and other official documents, all contracts,
                receipts and other accounting documents, all construction plans and
                all
                other files, no matter whether original or copy, will be and stay
                upon
                Closing in the possession of Xishui Winner. In the event that a document
                referred to in the foregoing sentence is missing the Parties shall
                use
                their best efforts to obtain such
                document.

            


       

      	9.1.22  	
              The
                Seller herewith agrees that the Buyer may transfer any rights or
                obligations under this Agreement to any affiliated company of the
                Buyer.

            


       

      	9.1.23  	
              All
                information (including but not limited to those translated into English
                language) given to the Buyer in the context of this Agreement is
                correct
                and complete, and the Seller has disclosed any information which
                is
                relevant for the decision of the Buyer to enter into this Agreement
                at all
                and at the terms and conditions provided for
                herein.

            


       

      	9.1.24  	
              Between
                the date of signing this Agreement and the date of the issuance of
                the new
                business license as defined in Article above or the date of the successful
                increase of registered capital as defined in Article above, whichever
                is
                later, Xishui Winner shall not, except for the needs of normal production
                operations, entered into any contract which incurs liability exceeding
                fifty thousand (RMB 50,000); neither the land, the land-use right
                as
                defined in Article above refers to, nor any buildings or structures
                on
                such land have been damaged or destroyed, nor other changes been
                made.
                However, indispensable and urgent expenditures exceeding fifty thousand
                (RMB 0) outside the scope of normal production operations and required
                by
                the course of business may only be made after obtaining the written
                approval of the Buyer.

            


       

      	9.1.25  	
              The
                Seller has ensured that the bankers of Xishui Winner are notified
                on the
                equity transfer if any existing agreement requires such disclosure
                prior
                to any equity transfer.

            


       

      	9.2  	
              If
                any of the representations and warranties assumed by the Seller in
                Article
                above is totally or partially incorrect, the Seller shall be liable
                for
                all direct damages incurred by the Buyer and/or Xishui Winner accordingly.
                The liability for any indirect losses or damages shall be
                excluded.

            


       

      The
        Seller shall be liable for any damage or other financial burden which incurs
        or
        may incur to the Buyer by intentional or negligent acts or omissions occurred
        until the Closing.

       

      The
        Buyer
        shall be entitled to claim, or to detain or reduce the Transfer Price mentioned
        in Article 2 by all taxes, customs duties, debts or liabilities which become
        due
        and payable after 28 February 2005 but result from the time before 1 March
        2005.
        However, such right shall not apply if the aforesaid sums have already been
        duly
        provided in the financial statement of Xishui Winner before 28 February 2005
        unless the provisions become untrue.

       

      	9.3  	
              Notwithstanding
                Articles 9.1 and 9.2 above, the Seller undertakes to fully indemnify
                Xishui Winner and the Buyer in case Xishui Winner is or may be held
                liable
                by any PRC authorities or any third parties for any and all liabilities
                of
                Xishui Winner arising out of or related to Xishui Winner's operations
                prior to 1 March 2005, including but not limited to tax liabilities,
                labor
                liabilities (overtime payment, social insurance contributions, annual
                leave payments and etc.), land use liabilities, contractual
                liabilities.

            


       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      ARTICLE
        10

       

      TERMINATION
        OF THE AGREEMENT

       

      	10.1  	
              If
                any of the representations and warranties of either Party made in
                Article
                above and Article above are found to be untrue, misleading or incorrect,
                or if any Party defaults its obligations under this Agreement and
                fails to
                remedy the same within 30 days after receiving a written notice from
                the
                other Party to do so, then the other Party shall have the right to
                terminate this Agreement by written notice without liability on its
                part
                but without prejudice to any other rights it may have under this
                Agreement
                and / or the laws of the PRC.

            


       

      	10.2  	
              This
                Agreement may be terminated by the Buyer by giving written notice
                to the
                other if:

            


       

      	10.2.1  	
              this
                Agreement has not been approved by the responsible authorities in
                the PRC
                within two (2) months of the date of execution of this Agreement
                or such
                later date as the Parties may agree in writing,
                or

            


       

      	10.2.2  	
              the
                conditions precedent have not all been fulfilled within two (2) months
                of
                the date of execution of this Agreement or such later date as the
                Parties
                may agree in writing.

            


       

      	10.3  	
              In
                the case of a termination pursuant to Articles 10.1 or 10.2 above,
                each
                Party shall have no further obligations and/or rights resulting from
                this
                Agreement and/or from the previous negotiations with exception of
                those
                obligations and/or rights which have arisen prior to the termination
                date.
                However, Articles 12, and shall remain
                effective.

            


       

      	10.4  	
              The
                Parties agree to use their best endeavours to solve any and all legal
                and/or administrative problems which may impede the accomplishment
                of the
                matters contemplated under this
                Agreement.

            


       

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

       

      ARTICLE
        11

       

      COSTS

       

      	11.1  	
              Each
                Party shall bear the costs and expenses incurred during and for the
                preparation of this Agreement, in particular fees of advisors such
                as
                attorneys and engineers engaged by such Party. The stamp duty and
                any fees
                occurring from or related to the implementation of this Agreement,
                if any,
                unless such fees shall be borne by the Seller and/or the Buyer as
                set
                forth in the relevant applicable PRC laws and regulations, shall
                be
                equally shared by the Parties. The registration fees, if any, shall
                be
                borne by Xishui Winner.

            


       

      	11.2  	
              Each
                Party shall bear the costs incurred in the fulfillment of the conditions
                precedent to the Closing to be fulfilled by each Party
                respectively.

            


       

      	11.3  	
              All
                taxes related to the transaction, except for the stamp duty as provided
                in
                Article above, shall be borne by the respective Party in accordance
                with
                the applicable laws. In case any Party is required under the relevant
                PRC
                laws to act as a withholding agent for any taxes arising out of or
                related
                to any payment to the other under this Agreement, then the Party's
                fulfillment of such withholding tax obligation shall not be recognized
                as
                a breach of this Agreement.

            


       

      ARTICLE
        12

       

      APPLICABLE
        LAW AND DISPUTE RESOLUTION

       

      	12.1  	
              The
                formation, validity. interpretation and implementation of this Agreement,
                and any disputes arising out of or related to this Agreement, shall
                be
                governed by the laws of the PRO.

            


       

      	12.2  	
              All
                disputes, controversy or claim arising from the execution of, or
                in
                connection with this Agreement, or the breach termination or invalidity
                thereof, shall be settled through friendly consultations between
                the
                Parties.

            


       

      If
        no
        settlement can be reached through consultation within ninety (90) days after
        either Party has given written notice to the other Party of the existence
        of a
        dispute under this Article, the dispute may be submitted to arbitration with
        the
        Hong Kong International Arbitration Centre ("Centre") according to the UNCITRAL
        arbitration rules for the time being in force by the Centre.

       

      There
        shall be three (3) arbitrators, one (1) of whom shall be appointed by the
        Seller, one (1) of whom shall be appointed by the Buyer and one (1) of whom
        shall be appointed by the Centre and shall serve as chairman of the tribunal.
        The place of arbitration shall be in Hong Kong. The language of the arbitration
        shall be English. The arbitration award shall be final and binding on the
        Parties. The losing Party shall bear the expenses of the arbitration, if
        not
        otherwise decided by the arbitration tribunal.

       

      When
        any
        dispute occurs and when any dispute is under arbitration, except for the
        matters
        under dispute, the Parties shall continue to exercise their other respective
        rights and fulfill their other respective obligations under this
        Agreement.

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

       

      ARTICLE
        13

       

      MISCELLANEOUS

       

      	13.1  	
              Any
                notice or written communication provided for in this Agreement from
                one
                Party to the other Party shall be made in writing in English and
                sent by
                courier service delivered letter or by facsimile with a confirmation
                copy
                sent by courier service delivered letter. The date of receipt of
                a notice
                or communication hereunder shall be deemed to be seven (7) days after
                the
                letter is given to the courier service or three (3) working days
                of the
                receiving party after sending in the case of a facsimile, provided
                it is
                evidenced by a confirmation receipt and the confirmation letter is
                sent.
                All notices and communications shall be sent to the appropriate
                individuals and addresses set forth below, until the same is changed
                by
                notice given in writing to the other
                Party.

            


       

      Seller:

       

      Mr.
        Li
        Jian Quan

      Telephone: +86
        755
        2813 4988

      Facsimile: +86
        755
        2813 4588 

       

      Buyer:

       

      Mr.
        Hans-Willi Mueller

      Telephone: +49
        2634
        99 6975 / private: +49 2689 6841

      Facsimile: +49
        2634
        99 66 60

      Mobile: +49
        171
        213 3820

       

      	13.2  	
              This
                Agreement including all Annexes supersedes any other agreement, whether
                written or oral, that may have been made or entered into by the Buyer
                and
                the Seller prior to the execution of this Agreement relating to the
                matters contemplated hereby. This Agreement constitutes the entire
                agreement by and between the Parties and there are no further agreements
                or commitments by or between the Parties. Any amendments must be
                made in
                writing. This requirement shall also apply to the amendment of the
                written
                form requirement.

            


       

      	13.3  	
              If
                one or several provisions of this Agreement is or becomes invalid
                or
                unenforceable, or if this Agreement is incomplete, the validity and
                enforceability of the other provisions of this Agreement shall not
                be
                affected thereby.

            


       

      	13.4  	
              All
                information and data exchanged between the Parties in respect of
                the
                transfer of the Transferred Equity in Xishui Winner shall remain
                confidential unless they are publicly known or become publicly known
                without the fault of the other Party. The Parties agree that this
                clause
                does not affect the right of either Party to disclose such information
                and
                data to any third party which is by law obliged to keep such information
                and data confidential, in particular professional advisers and bank
                personnel. The Parties further agree that the Buyer is permitted
                to
                disclose to the Chairman of the supervisory board of Lohmann &
                Rauscher GmbH all information or data, which may at its discretion,
                facilitate the transaction.

            


       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

       

      	13.5  	
              Neither
                Party shall issue any press release or otherwise communicate with
                any news
                medium concerning the transfer of the Transferred Equity without
                the prior
                written consent of the other Party.

            


       

      	13.6  	
              Any
                conversion of RMB to US$, if necessary, shall be made on the basis
                of the
                intermediate exchange rate between RMB and US$ announced by the People's
                Bank of China on the date payment in RMB is effected (Article 3;
                payments
                are in US$).

            


       

      	13.7  	
              To
                the extent permitted by PRC law, failure or delay on the part of
                either
                Party hereto to exercise a right under this Agreement and the Annexes
                hereto shall not operate as a waiver thereof, nor shall any single
                or
                partial exercise of a right preclude any future exercise
                thereof.

            


       

      	13.8  	
              Except
                as otherwise provided herein, this Agreement may not be assigned
                in whole
                or in part by either Party without the prior written consent of the
                other
                Party.

            


       

      	13.9  	
              This
                Agreement is executed in the Chinese language in five (5) originals
                and in
                the English language in five (5) originals with the English and the
                Chinese version equally binding. Each Party shall hold one (1) set
                of each
                language version. The other sets shall be used for the examination
                and
                approval authorities.

            


       

      


      
        	     	 	        
	Seller	 	Buyer


      

       

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

             

      THIRD
        AMENDMENT

       

      TO

       

      ARTICLES
        OF ASSOCIATION

       

      OF


       

      L+L
        HEALTHCARE HUBEI CO. LTD.

       

      (previously
        known as Winner Medical & Textile Ltd., Xishui)

       

      (Chinese
        characters)

      
 

       

      BEITEN
        BURKHARDT

      RECHTSANWALTSGESELLSCHAFT
        MBH

      BEIJING
        REPRESENTATIVE OFFICE

      Suite
        3130 • 31st Floor • South Office Tower • Beijing Kerry Centre

      1
        Guang
        Hua Road • Chao Yang District • Beijing 100020

      Telefon:
        + 86 10 / 8529 8110 • Telefax + 86 10 / 8529 8123

      E-MAIL:
        bblaw-beijing@bblaw.de

      


      
 

      


      8
        April 2005

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      TABLE
        OF CONTENTS

       

      TO
        BE
        GENERATED

       

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      


      The
        Third
        Amendment of the Articles of Association (the "Third Amendment") is made
        and
        entered into by and between

       

      Lohmann
        & Rauscher Limited, a corporation legally incorporated and validly existing
        under the laws of Hong Kong and whose registered office is situated at 14th
        Floor, Hong Kong Diamond Exchange Building, 8-10 Duddell Street, Central,
        Hong
        Kong ("L&R");

       

      and

       

      Winner
        Group Limited, a corporation legally incorporated and validly existing under
        the
        laws of Cayman Islands and whose registered office is situated at Scotia
        Centre,
        4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands
        ("Winner").

       

      RECITALS

       

      
        	
                A.

              	
                Winner
                  signed the Articles of Association for the establishment of Winner
                  Medical
                  & Textile Limited, Xishui (the "Company") on 18 January 2003 and
                  amended such documents on 8 June 2003 and 1 April
                  2004;

              


      

       

      
        	
                B.

              	
                L&R
                  and Winner have signed an Agreement on Equity Transfer and Capital
                  Increase ("the Contract") on 8 April 2005 under which Winner has
                  transferred 60% of its equity in the Company to L&R, L&R and
                  Winner have agreed to increase the registered capital of the Company
                  and
                  other related matters.

              


      

       

      NOW
        THEREFORE, in consideration of the foregoing recitals the Parties hereto
        agree
        as follows :

       

      CHAPTER
        1

      GENERAL
        PROVISIONS

       

      Article
        1

       

      In
        accordance with the "Company Law of the People's Republic of China", the
        "Law of
        the People's Republic of China on Wholly-Foreign Owned Enterprises", as
        supplemented ("Wholly Foreign Owned Enterprises Law") and other relevant
        Chinese
        laws and regulations, Lohmann & Rauscher Limited of 14th Floor, Hong Kong
        Diamond Exchange Building, 8-10 Duddell Street, Central, Hong Kong, and Winner
        Group Limited of Cayman Islands, hereby agree to operate the Company according
        to these Articles of Association in substitution of previous Articles of
        Association.

       

      Each
        of
        the Parties hereto represents and warrants that:

       

      
        	
                -

              	
                it
                  possesses full power and authority to enter into these Articles
                  of
                  Association and to perform its obligations hereunder;
                  and

              


      

       

      
        	
                -

              	
                its
                  representative whose signature is affixed hereto shall be its legal
                  representative or another person authorized by a valid power of
                  attorney
                  to sign these Articles of
                  Association.

              


      

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      Article
        2  

       

      	2.1  	
              First
                Investor ("Investor A") :-

            


      

        
          	 	
                  Legal
                    Name: 

                	
                  Lohmann
                    & Rauscher Limited

                
	 	
                  Legal
                    address is:

                	
                  14th
                    Floor,

                
	 	
                	
                  Hong
                    Kong Diamond Exchange Building,

                
	 	
                	
                  8-10
                    Duddell Street, Central, Hong Kong

                
	 	
                  Legal
                    Representative:

                	
                  Mr.
                    Hans-Willi Mueller

                
	 	
                  Position:

                	
                  Director

                
	 	
                  Nationality:

                	
                  German

                


        

      

       

      	2.2  	
              Second
                Investor ("Investor B"):-

            


       

      
        
          	 	
                  Legal
                    Name:

                	
                  Winner
                    Group Limited

                
	 	
                  Legal
                    address is:

                	
                  Scotia
                    Centre,

                
	 	 	
                  4th
                    Floor, P.O. Box 2804,

                
	 	 	
                  George
                    Town, Grand Cayman, Cayman Islands

                
	 	 	 
	 	
                  Legal
                    Representative:

                	
                  Mr.
                    Li Jian Quan

                
	 	
                  Position:

                	
                  Managing
                    Director

                
	 	
                  Nationality:

                	
                  Hong
                    Kong, China

                
	 	 	 


        

      

      Investor
        A and Investor B Company collectively referred to as the "Investors" or
        "Parties" and if the situation requires, in the singular form referred as
        the
        "Investor" or "Party").

       

      For
        the
        purpose of this Agreement:-

       

      
        	
                (1)

              	
                "Winner
                  Group" means Investor B, its holding company and all companies
                  which now
                  or in the future become subsidiaries of Investor B or of any such
                  holding
                  company or are otherwise controlled by the majority shareholder
                  of
                  Investor B or any such holding
                  company;

              


      

       

      
        	
                (2)

              	
                "L&R
                  Group" means Investor A, its holding company and all companies
                  which now
                  or in the future become subsidiaries of Investor A or of any such
                  holding
                  company or are otherwise controlled by the majority shareholder
                  of
                  Investor A or any such holding
                  company.

              


      

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      Article
        3

       

      	3.1  	
              The
                name of the Company in Chinese shall remain as: [Chinese
                characters]

            


       

      The
        name
        of the Company in English shall be changed from "Winner Medical & Textile
        Ltd. Xishui to L + L Healthcare Hubei Co., Ltd."

       

      The
        legal
        address of the Company is: Hongshan Industrial Park, Xishui County, Hubei
        Province, People's Republic of China, Xishui County, Hubei Province, People's
        Republic of China ("PRC").

       

      	3.2  	
              Investor
                B will provide to the Company the right to use in its corporate name
                and
                in the course of trade the trade names and trademark [Chinese character]
                i.e. ”Wen Jian in Chinese " royalty free.

            


       

      Article
        4

       

      The
        Company shall be a limited liability company. The liability of the Company
        shall
        be limited to its total assets. The liability of each Investor shall be limited
        to the amount of the registered capital subscribed by it. The profits and
        liabilities of the Company shall be shared by the Investors in proportion
        to
        their respective contribution to registered capital.

       

      Article
        5

       

      The
        Company shall have the status of a legal person of the PRC and shall be subject
        to the jurisdiction and protection of the laws of the PRC. All its activities
        shall be governed by the promulgated and publicly available laws, rules and
        regulations of the PRC.

       

      Activities
        of the Company outside the PRC shall comply with applicable foreign laws,
        decrees and rules and regulations.

       

      CHAPTER
        2

      PURPOSE
        AND SCOPE OF BUSINESS

       

      Article
        6

       

      The
        purpose of the Company is to contribute to the development of the production
        of
        medical health care products in the PRC. It will use advanced and appropriate
        methods for the manufacture of its products in order to open new markets
        for the
        products with the aim of raising long term economic results and long term
        economic benefits to the Investors.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      Article
        7

       

      	7.1  	
              The
                business scope of the Company shall be the development, production,
                sale
                distribution and servicing of such medical disposal product such
                as
                surgical dressing, medical gauze products, non-woven face mask, non-woven
                surgical gowns, drapes, non-woven caps
                etc..

            


       

      	7.2  	
              Products
                of the Company shall be medical health materials and protection items
                ("Products").

            


       

      	7.3  	
              The
                Products shall be mainly for export outside the PRC as well as for
                the
                domestic market in the PRC. The Company shall only act as private
                label
                manufacturer unless the Investors come to a new
                arrangement.

            


       

      	7.4  	
              The
                Company may establish branch offices and representative offices inside
                or
                outside the PRC with the consent of the Board of Directors and approval
                from the relevant PRC governmental
                authorities.

            


       

      CHAPTER
        3

      TOTAL
        AMOUNT OF INVESTMENT, REGISTERED CAPITAL AND

      ADDITIONAL
        FUNDS

       

      Article
        8

       

      The
        total
        amount of investment of the Company shall remain as US$4,300,000.00 .


       

      Article
        9

       

      The
        registered capital of the Company shall be US$2,561,600.00 (increased from
        the
        sum of US$2,420,000.00).

       

      Article
        10

       

      	10.1  	
              The
                manner, amount, and ratio of contribution to the registered
                capital:

            


       

      
        	
                Investor

              	
                Name
                  of Contribution

              	
                Amount

              	
                Ratio

              
	
                Lohmann
                  & Rauscher Limited, Hong Kong

              	
                CASH

              	
                US$1,536,960.00

              	
                60%

              
	
                Winner
                  Group Limited, Cayman Islands

              	
                CASH

              	
                US$1,024,640.00

              	
                40%

              


      

      


       

      Article
        11

       

      	11.1  	
              The
                Investor shall make their capital contribution, as defined in Article
                10.1, within thirty (30) days after the date of issuance of the new
                business license of the Company in accordance with the terms of the
                Contract.

            


       

      The
        Investors' cash contribution shall be made to the Company's foreign exchange
        bank account.

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      Article
        12

       

      	12.1  	
              Capital
                contributions shall be verified by a registered certified public
                accountant of the PRC, who shall issue a report verifying the capital
                contributions of the Investors within sixty (60) days after the respective
                capital contribution has been made. The Company, on the receipt of
                satisfactory verification reports, shall issue a Certificate of Capital
                Contribution to each of the Investors.

            


       

      	12.2  	
              If
                any assessed value exceeds the value set forth in Article 10.1, any
                surpassing amount shall be treated as capital surplus of the Company.
                Any
                assessed value less than the value set forth in Article 10 shall
                be
                covered by the respective Investor in cash in US dollars within 20
                days
                after receipt of the capital contribution
                certificate.

            


       

      Article
        13

       

      	13.1  	
              During
                the duration of the Company, the Investors may not reduce the registered
                capital of the Company, and neither Party may reduce its amount of
                capital
                contribution if not otherwise permitted by the PRC laws and
                regulations.

            


       

      The
        registered capital of the Company may be increased only upon unanimous decision
        made by the Board of Directors and approval by the examination and approval
        authority.

       

      	13.2  	
              The
                registration procedures for changes due to increase or transfer of
                registered capital shall be carried out with the competent department
                of
                the Administration of Industry and
                Commerce.

            


       

      	13.3  	
              During
                the duration of the Company, neither Investor may sell, assign, transfer
                ,
                mortgage, pledge or in any other way encumber its share of the registered
                capital or part thereof to a third party without the prior written
                consent
                of the other Investor (unless the procedure mentioned under Chapter
                8
                hereof has been followed ) and approval of the original examination
                and
                approval authority..

            


       

      CHAPTER
        4

      BOARD
        OF DIRECTORS

       

      Article
        14

       

      The
        members of the Board of Directors of the Company shall be designated by the
        Investors, and the Board of Directors thereby be established, no later than
        the
        date of issue of the business license of the Company.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      Article
        15

       

      The
        Board
        of Directors shall consist of three (3) Directors, of which two (2) director
        shall be appointed by Investor A and one (1) director appointed by Investor
        B. .
        The Board of Directors shall have one Chairman to be appointed by Investor
        A and
        one Vice-Chairman so appointed by Investor B. The term of office for the
        Chairman and the Vice-Chairman shall be four (4) years unless replaced earlier,
        and any Director may be reappointed or replaced at any time by the Investor
        which originally appointed him.

       

      Article
        16

       

      	16.1  	
              The
                Board of Directors shall be the highest organ of authority of the
                Company
                and shall decide all major policy issues of the
                Company.

            


       

      	16.2  	
              The
                main functions of the Board of Directors are
                to:

            


       

      	1.      	
              Approve
                the important reports submitted by the General
                Manager;

            


       

      	2.      	
              Approve
                the annual financial reports, income and expenditure accounts, profit
                and
                loss accounts, and to approve proposals for the distribution of the
                profits for the year;

            


       

      	3.      	
              Pass
                important rules and regulations of the
                Company;

            


       

      	4.      	
              Decide
                in establishing branch organizations;

            


       

      	5.      	
              Decide
                on any formation of joint ventures or any merger with any third
                party;

            


       

      	6.      	
              Approve
                any amendment or alteration of these Articles of
                Association;

            


       

      	7.      	
              Apply
                for dissolution of the Company in case of expiration or early
                termination;

            


       

      	8.      	
              Approve
                the appointment of and engage the General Manager, Deputy General
                Manager,
                Chief Accountant, Deputy Chief Accountant, other senior staff and
                Auditors;

            


       

      	9.      	
              Approve
                the salary of the high ranking administrative personnel of the
                Company;

            


       

      	10.      	
              Being
                in charge for the liquidation matters upon the expiration or early
                termination of the Company;

            


       

      	11.      	
              Any
                other matter which shall be decided by the Board of Directors according
                to
                the Contract between the Investors or the Articles of Association
                and any
                other important matters that require the decision of the Board of
                Directors:

            


       

      	12.      	
              Price
                structure, staff planning. 

            


       

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      Article
        17

       

      The
        Chairman of the Board is the legal representative of the Company. Should
        the
        Chairman of the Board be unable to exercise his responsibilities, he shall
        authorize the Vice-Chairman or any other Director to represent the Company
        temporarily.

       

      Article
        18

       

      	18.1  	
              The
                Board of Directors shall convene at least once every year. The meeting
                shall be called and presided over by the Chairman of the Board. The
                Chairman of the Board shall call and preside over a special meeting
                of the
                Board of Directors after receiving the request made by any two (2)
                Directors.

            


       

      	18.2  	
              If
                the Chairman of the Board is unable to attend a meeting, he shall
                appoint
                the Vice-Chairman to preside at the meeting, and if the Vice-Chairman
                is
                unable to attend, the Chairman shall appoint another Director to
                preside
                over the meeting. Notice of each Board of Directors meeting specifying
                the
                date, time and place of a Board meeting together with relevant papers
                including the proposed agenda shall be given in writing and shall
                be
                delivered by the Chairman of the Board to each Director not later
                than
                thirty (30) days prior to the date set for such meeting. Notice shall
                be
                given by telex or telefax to the Directors residing outside Hong
                Kong.

            


       

      	18.3  	
              Complete
                and accurate written minutes of all meetings in Chinese and English
                language shall be made for each Board meeting by the Chairman of
                the Board
                and signed by all Directors who attended the meeting in person or
                by proxy
                right after each meeting. Minutes of all meetings shall be placed
                on file
                and copies sent to the Investor within thirty (30) days after each
                meeting.

            


       

      	18.4  	
              The
                meetings of the Board of Directors shall generally be held at the
                legal
                address of the Company or Hong Kong, unless otherwise agreed by the
                Board
                of Directors.

            


       

      	18.5  	
              A
                quorum of (two-thirds) Directors is required for a meeting of the
                Board of
                Directors. If a quorum is not met at such meeting, the Chairman shall
                call
                another meeting. If again the quorum is not met at such meeting a
                quorum
                shall not be required if the chairman so informed all members of
                the Board
                of Directors when calling the meeting. Any decision adopted at a
                Board
                meeting at which a quorum, if necessary, was not present shall be
                invalid.

            


       

      	18.6  	
              If
                any Director is unable to attend a meeting, he may by a written proxy
                designate another person to attend the meeting in his place and vote
                on
                his behalf. If a Director who is unable to attend a meeting fails
                to so
                designate another person, he shall have no rights to participate
                in, or
                vote at such meeting.

            


       

      	18.7  	
              The
                quorum of the Board of Directors may by written consent waive the
                notice
                requirements for meetings.

            


       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      	18.8  	
              The
                Board of Directors shall have the right to adopt resolutions without
                meeting. pursuant to an unanimous written consent resolution of all
                Directors of the Board]. In such case, the resolution shall be made
                in
                writing, including facsimile, in which case the circulation of the
                original for signature shall immediately follow but the resolution
                be
                deemed passed upon signature by the necessary number of Directors
                on the
                facsimile.

            


       

      	18.9  	
              The
                first meeting of the Board of Directors of the Company shall be held
                within sixty (60) days after the issue of the new business license
                of the
                Company.

            


       

      Article
        19

       

      Except
        for matters mentioned in items (1) to (12) hereunder, all decisions made
        by the
        Board of Directors shall be valid only if they are agreed upon by the majority
        of those Directors participating in person or by proxy, provided that the
        Board
        of Directors shall reach decisions on major policy issues through friendly
        consultation on the basis of mutual benefit, and that Each Director shall
        have
        one (1) vote.

       

      The
        following major policy issues must be unanimously agreed by the Directors
        attending the meeting of the Board of Directors in person or by
        proxy:

       

      	1.      	
              changes
                or amendment to the Articles of Association of the
                Company;

            


       

      	2.      	
              termination
                or dissolution of the Company;

            


       

      	3.      	
              any
                increase or decrease in the registered capital of the Company or
                assignment of a share of such registered capital or a part
                thereof;

            


       

      	4.      	
              merger
                of the Company with another economic entity and the division or
                restructuring (except for internal reorganization) of the
                Company;

            


       

      	5.      	
              approval
                of annual financial budget plan for operation of the business of
                the
                Company (but if no unanimous agreement, then the annual financial
                budget
                shall remain the same as the one adopted in the preceding
                year);

            


       

      	6.      	
              any
                material change in the Company's business scope, strategy and
                nature;

            


       

      	7.      	
              any
                change in the profit distribution plan of the Company from the provision
                mentioned in Article 52.2 ;

            


       

      	8.      	
              any
                decision to provide a guarantee or other security (including creation
                of
                mortgage) for the benefit of a third party, to give a loan to a third
                party, or to invest in other entity;

            


       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      	9.      	
              approval
                for obtaining a loan for the Company in excess of RMB 1,000,000 in
                a
                single or repeated transaction;

            


       

      	10.      	
              approval
                for pricing principle and payment method for contracts that the Company
                signs with any of its shareholder(s), directors or other affiliated
                parties;

            


       

      	11.      	
              approval
                for employment of senior management personnel by the Company with
                yearly
                remuneration of RMB 100,000.00 or above;

            


       

      	12.      	
              matters
                which require signatures of any two
                directors.

            


       

      Above
        decisions 1.) - 4.) shall become effective only upon written consent of the
        Investor A and Investor B and approval by the examination and approval
        authority.

       

      Article
        20

       

      	20.1  	
              The
                members of the Board of Directors shall not be entitled to any
                remuneration for services rendered to the Company. Each of the Investors
                shall be responsible to pay for the expenses incurred by its own
                nominated
                directors for attending the board meetings including travel expenses,
                accommodations and other related
                expenses.

            


       

      	20.2  	
              No
                member of the Board of Directors shall have any personal liability
                for any
                act performed in his capacity as Board member except for such acts
                as
                would constitute violations of the laws of any jurisdiction to which
                the
                Company or the relevant Board member is subject
                to.

            


       

      CHAPTER
        5

      BUSINESS
        MANAGEMENT

       

      Article
        21

       

      	21.1  	
              The
                Company shall establish a management office which shall be responsible
                for
                its daily management. The management office shall have a General
                Manager,
                and two Deputy General Managers if business so
                requires.

            


       

      	21.2  	
              The
                General Manager and Deputy General Managers shall be nominated by
                the
                Investors and appointed by the Board of Directors and their maximum
                term
                of office shall be four (4) years.

            


       

      	21.3  	
              The
                Board of Directors may reappoint or revoke the appointment at any
                time
                upon the consent of the Investor.

            


       

      	21.4  	
              The
                management office shall proceed in accordance with the Articles of
                Association.

            


       

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      Article
        22

       

      	22.1  	
              The
                General Manager shall have the responsibility of implementing the
                general
                policies and decisions of the Board of Directors, and of organizing
                and
                conducting the daily management of the Company and, within the scope
                empowered to him by the Board of Directors, to represent the Company
                in
                dealing with third parties.

            


       

      	22.2  	
              The
                Deputy General Manager shall be responsible to and report to the
                General
                Manager.

            


       

      	22.3  	
              Within
                fifty (50) days after the end of each fiscal year, the General Manager
                shall report to the Board of Directors on the state of the business
                during
                such year and submit a final annual financial
                report.

            


       

      Article
        23

       

      The
        General Manager shall also have the power to act on behalf of the Board of
        Directors in emergency situations in which it is impossible to convene a
        meeting
        of the Board of Directors for urgent decisions in time to prevent serious
        harm
        to the Company. Such event has to be reported to the Board of Directors without
        delay.

       

      Article
        24

       

      Within
        the management organization, departments shall be established if so decided
        by
        the Board of Directors. Department managers shall be appointed if and as
        necessary. The managers and deputy managers of the various departments shall
        be
        nominated by the General Manager and the Deputy General Managers (if any).
        The
        managers and deputy managers of the departments shall be responsible for
        the
        work of the department concerned, shall execute the tasks assigned by the
        General Manager and Deputy General Manager (if any), and shall be responsible
        to
        them.

       

      Article
        25

       

      If
        the
        Board of Directors decides at any time that a Chief Accountant and Deputy
        Chief
        Accountant are required for the Company, they shall [jointly] be appointed
        by
        the General Manager and the Deputy General Manager (if any)]. The Chief
        Accountant shall assist the General Manager and shall be responsible for
        the
        financial and accounting work of the Company. He shall submit to the General
        Manager and the Deputy General Manager (if any) an annual budget for each
        fiscal
        year, not later than sixty (60) days before the beginning of such fiscal
        year,
        quarterly financial statements within fifteen (15) days after the end of
        the
        respective quarter and final annual financial reports within forty (40) days
        after the end of the respective year.

       

      Article
        26

       

      Concurrently
        with the performance of their duties to the Company as provided herein, the
        General Manager and the Deputy General Manager (if any) may not assume any
        other
        duties of or participate in other economic organizations in competition with
        the
        Company.

       

      Article
        27

       

      The
        General Manager and Deputy General Manager (if any) may be dismissed by the
        Board of Directors at any time, for intention or gross negligence or for
        graft
        or serious dereliction of duties or other due causes permitted by PRC law.
        Other
        senior management staff may be dismissed by the General Manager [in consent
        with
        the Deputy General Manager], with the approval of the Board of Directors,
        at any
        time for graft or serious dereliction of duties.

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      CHAPTER
        6

      LABOR
        MATTERS

       

      Article
        28

       

      	28.1  	
              Labor
                contracts covering the hiring of workers, their qualifications and
                testing, employment, dismissals, resignation, salaries and wages,
                labor
                insurance, welfare, rewards and bonuses, safety, labor discipline,
                and
                other matters concerning the staff and workers of the Company shall
                be
                based on the "Foreign Investment Enterprises Labor Management Provisions",
                the "PRC Labor Law", as supplemented, and other relevant promulgated
                rules
                and regulations of the PRC and the Hubei Provincial
                Government.

            


       

      	28.2  	
              The
                Company shall sign labor contracts with individual staff and workers
                and
                shall submit a form of them to the local labor management bureau
                for
                record.

            


       

      	28.3  	
              Investor
                B undertakes to use its best endeavours to retain the existing personnel
                in charge of the operation and production in the Company to continue
                their
                employment.

            


       

      Article
        29

       

      The
        Company acting through its General Manager/management office shall have the
        widest authority, consistent with relevant promulgated laws and regulations
        of
        the PRC, to implement modern methods of management and work performance control.
        This shall include the power to dismiss workers and staff members as redundant
        and to maintain labor discipline which shall include the power to criticize,
        educate or take disciplinary actions extending to dismissal for cause against
        workers and staff members for violation to the labor contract or other internal
        rules of the Company.

       

      Article
        30

       

      	30.1  	
              The
                qualification and number of staff and workers of the Company shall
                be in
                accordance with the operating needs of the
                Company.

            


       

      	30.2  	
              The
                salary of the staff and workers shall be increased corresponding
                to the
                proposal made by the General Manager having regard to the development
                of
                business of the Company and local wages level , but subject always
                to
                final approval of the Board of Directors.

            


       

      Article
        31

       

      Matters
        concerning the welfare funds, bonuses, labor protection and labor insurance
        shall be stipulated in various rules set forth in Article 56.

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

       

      Article
        32

       

      The
        appointment of high ranking administrative personnel, their salaries, social
        insurance, welfare and the standard of travel expenses shall be decided jointly
        by the General Manager and Deputy General Managers upon prior consent having
        been obtained from the Board of Directors, provided that compensation for
        foreign personnel shall be in accordance with prevailing principles of
        remuneration in their respective home countries and standards for expatriate
        assignments in other similarly situated countries.

       

      Investor
        A shall have the right at its own cost to second to the Company not more
        than
        two (2) expatriate(s) according to the Company's operating needs, but the
        Company shall be responsible to pay for the local accommodation cost and
        living
        expenses (including food, local travelling, company car with driver
        etc.).

       

      Investor
        B represents and warrants that it shall hold the Company harmless from all
        claims arising out of any staff and worker's prior employment with Company
        before 1 March 2005.

       

      CHAPTER
        7

      MANAGEMENT
        SERVICE

       

      Article
        33

       

      	33.1  	
              Investor
                B further agrees to do the following when the management of the Company
                so
                requires:- 

            


       

      
        	 	
                (a)

              	
                Mr.
                  Li Wan Quan and Mr. Fang Xinyuan shall make themselves available
                  to
                  support the management of the Company free of charge if and when
                  the
                  business of the Company requires
                  assistance;

              


      

       

      
        	 	
                (b)

              	
                procure
                  the Winner Group (situated at Shenzhen) to, free of charge. assist
                  due
                  supervision and control over salary payment and other related labour
                  issues of the Company in compliance with relevant PRC regulations,
                  and
                  this include Winner Group to assist raising the standard of book-keeping
                  of the Company free of charge.

              


      

       

      Article
        34

       

      No
        sale,
        assignment, mortgage, pledge or other transfer of an interest in the Company
        shall become effective until all necessary approvals in form and substance,
        acceptable to the Investors, have been obtained.

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

       

      CHAPTER
        8

      TRANSFER
        OF EQUITY, PRE-EMPTION RIGHT

       

      Article
        35

       

      	35.1  	
              If
                one Investor ("Disposing Party") wishes to assign, or otherwise transfer
                all or any part of its share of the registered capital to a third
                party,
                the other Investor ("Other Party") shall have a pre-emptive right
                to
                purchase the entire share of the registered capital ("Offered Equity")
                of
                the Disposing Party. The Disposing Party must first offer the whole
                of its
                equity interest to the Other Party on terms and conditions no less
                preferential than those offered to the third party and the price
                of the
                Offered Equity shall be determined in accordance with Article 37
                ("Offered
                Price") .

            


       

      The
        Other
        Party shall exercise such pre-emptive right within ninety (90) days after
        receipt of notice of such assignment or transfer [including name of transferee,
        proposed Offered Price and proposed terms], otherwise such right shall be
        deemed
        forfeited and the Disposing Party shall be free to assign or otherwise transfer
        its entire share of the registered capital to such third party within another
        sixty (60) days at terms and conditions and a price not less than the offered
        terms and conditions and the Other Party and the directors appointed by the
        Other Party shall be deemed to have agreed to the assignment or transfer.
        Any
        assignment or transfer in violation of this Article shall render such assignment
        or transfer invalid.

       

      	35.2  	
              In
                the event that:

            


       

      
        	 	
                -

              	
                50%
                  or more of the shares of either Investor is acquired by a third
                  party:
                  or

              


      

       

      
        	 	
                -

              	
                substantially
                  all of the assets of either Investor are acquired by a third party;
                  or

              


      

       

      
        	 	
                -

              	
                a
                  competitor of an Investor owns or exercises voting control of over
                  twenty-five percent (25%) of the shares of such other Investor;
                  or

              


      

       

      
        	 	
                -

              	
                an
                  Investor merges with or into another entity in a transaction in
                  which such
                  Investor is not the surviving
                  corporation,

              


      

       

      then
        the
        other Party shall have the right to purchase all (but not less than all)
        of the
        shares of the Company held by such Investor, and such Investor shall be deemed
        to have consented to such purchase.

       

      In
        such
        case, the price for the sale of equity shall be determined in accordance
        with
        Article 37.

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

       

      Article
        36

       

      If,
        at
        any time, when 80% of the business turnover is generated by or through L&R
        Group, then Investor A shall have the right to serve a written notice ("First
        Notice") on Investor B to discuss an increase of registered capital in order
        to
        accommodate an enlargement of the output capacity of the Company. If no decision
        on the increase of registered capital could be reached by the Investors within
        six months of the date of the said notice or if Investor B desires to establish
        its own factory (directly or indirectly) for manufacture of the Products,
        then
        Investor A shall have a call option to acquire the whole of the equity interest
        of Investor B in the Company by serving a written notice to this effect and
        then
        the acquisition shall be based on a price to be determined in accordance
        with
        Article 37.

       

      Article
        37

       

      The
        Offered Price shall be determined as follows on the basis that at the time
        of
        evaluation, (1) the profit and loss of the Company is being treated as at
        zero
        balance and (2) business results and of the Company for the immediate last
        3
        years have been profit-making;

       

      {[Sum
        A
        plus 10% of Sum A per year] + Sum B} x percentage of the Disposing Party's
        total
        equity in the Company

       

      where
        Sum
        A = US$ 4,000,000.00

      Sum
        B =
        Sum A + base cost of additional investment from 1 March 2005 - depreciation
        of investment as from 1 March 2005

       

      period
        for depreciation on land = nil

      period
        for depreciation on buildings = 30 years 

      period
        for depreciation for machinery = 10 years

      period
        for depreciation for intellectual technology, software. cars etc = 5 years
        

       

      Article
        38

       

      	38.1  	
              The
                Investors agree that any increase of registered capital or share
                transfer
                carried out in accordance with Article 37 shall be completed within
                12
                months of the First Notice issued by Investor A under Article
                37.

            


       

      	38.2  	
              The
                right given to Investor A under Article 37 shall be repeated whenever
                the
                business turnover of the Company generated by Investor A reaches
                80% again
                after any increase of registered capital and there shall be no limitation
                on the number of times for Investor A to exercise its rights given
                under
                Article 36.

            


       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

      CHAPTER
        9

      SALE
        OF PRODUCTS,

       

      Article
        39

       

      	39.1  	
              It
                is the plan that the Products shall mainly be sold for overseas market
                outside the PRC (excluding Hong Kong, Taiwan and
                Macao).

            


       

      	39.2  	
              The
                Company shall only be allowed to sell its Products directly to L&R
                Group and Winner Group (depending on the circumstances), and shall
                not be
                allowed to sell through any other third
                party.

            


       

      If
        such
        right of exclusivity of the Investor is violated directly or indirectly by
        the
        Company, then any proceeds deriving from such sales shall be handed over
        to the
        relevant Investor suffered by the violation if not otherwise agreed between
        the
        Investors and the Company.

       

      	39.3  	
              Each
                Investor shall use its best endeavours to bring business to the Company
                in
                order to fill up the Company's production capacity. but Investor
                A has
                already informed Investor B about L&R Group's current activities in
                having a supply arrangement for OR drapes, OR gowns and masks from
                a
                factory in Kunshan (near to Shanghai) and this shall not be affected.
                Insofar as Winner Group has or obtains any orders for producing private
                label products which the Company is capable of handling within its
                business scope, then Investor B agrees to procure that all such production
                orders be given to the Company exclusively and not to any other party
                whether inside or outside Winner Group as long as the production
                capacity
                of the Company could permit acceptance of
                orders.

            


       

      As
        from 1
        March 2005, neither Investor B nor Winner Group shall, whether directly or
        indirectly, offer or sell surgical gowns, OR drapes and face masks to European
        markets except for United Kingdom and Russia ("European Markets") to the
        intent
        that the European Markets (except United Kingdom and Russia) shall become
        the
        exclusive business territories for Investor A and L & R Group. Investor B
        will procure Winner Group to refer or transfer its existing and potential
        customers in the European Markets (except United Kingdom and Russia) to L& R
        Group as along as the business is related to surgical gowns, OR drapes and
        face
        masks.

       

      For
        the
        avoidance of doubt, United Kingdom, Russia and all other countries outside
        Europe shall be territories open equally to both Investors without any
        non-competition restriction.

       

      	39.4  	
              The
                pricing policy of the Company's products shall be the same whether
                it is
                for sale to Winner Group or L& R Group. The Board of Directors shall
                determine the sales prices for the products for markets outside the
                PRC
                and/or in Hong Kong, Taiwan and Macao.

            


       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

       

      CHAPTER
        10

      NON-
        COMPETITION

       

      Article
        40

       

      If
        the
        Company has enough free production capacity and satisfy the order requirements
        of the Parties, then while an Investor or any Affiliate is the holder of
        any
        equity of the Company, neither shall without the prior written consent of
        the
        other party either alone or jointly with, through [which includes by ownership
        of any equity direct or indirect control] or on behalf of [whether as director,
        partner, consultant, manager, employee, agent or otherwise] any person, directly
        or indirectly, in the PRC:

       

      
        	 	
                (1)

              	
                carry
                  on or be engaged or concerned or interested in any business which
                  is in
                  competition with the business of the Company carried on at any
                  time during
                  the term of the Company in any territory in which the business
                  is carried
                  on;

              


      

       

      
        	
              	(2)	
                (a)    procure
                  orders or;

              


      

       

      
        	
              	(b)	
                do
                  business with or;

              


      

       

      
        	 	
                (c)

              	
                cause
                  directly or indirectly any other person to procure orders from
                  or do
                  business with,

              


      

       

      in
        connection with any business competing with the business of the Company carried
        on during the term of the Company;

       

      
        	 	
                (3)
                  

              	
                engage
                  or employ, or solicit or contact with a view to the engagement
                  or
                  employment by any person, any employee, officer or manager of or
                  any
                  person who has been an employee, officer or manager of the Company
                  at any
                  time during the term of this
                  Company;

              


      

       

      
        	 	
                (4)
                  

              	
                do
                  or say anything which is harmful to the reputation of the Company
                  or which
                  may lead any person to cease to deal with the Company on substantially
                  equivalent terms to those previously offered or at all;
                  or

              


      

       

      
        	 	
                (5)
                  

              	
                seek
                  to contract with or engage in such a way as to adversely affect
                  the
                  Company any person who has been contracted with or engaged to manufacture,
                  assemble, supply or deliver products, goods, materials or services
                  to the
                  Company during the term of this
                  Company,

              


      

       

      with
        the
        intent that each of these restrictions shall constitute an entirely separate
        and
        independent restriction on the Investors and any Affiliate.

       

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

       

      CHAPTER
        11

      INSURANCE

       

      Article
        41

       

      Insurance
        policies of the Company on various risks shall be underwritten with an insurance
        company authorized to do business in the PRC. Types, value and duration of
        any
        insurance shall be decided by the Board of Director of the Company.

       

      CHAPTER
        12

      TAXES,
        FINANCE, AUDIT, PROFITS AND FOREIGN EXCHANGE

       

      Article
        42

       

      	42.1  	
              The
                Company shall pay taxes in accordance with the stipulations of Chinese
                national laws and regulations, provisions of the Hubei Provincial
                Government and other relevant rules and
                regulations.

            


       

      	42.2  	
              The
                Investors' share of profit and other income shall be exempted from
                taxation in accordance with the "Foreign Investment Enterprises and
                Foreign Enterprises Tax Law of the People's Republic of China", as
                supplemented, the Encouragement Provision and other relevant rules
                and
                regulations, and shall be permitted for foreign remittance according
                to
                the Wholly Foreign Owned Enterprise Law.

            


       

      	42.3  	
              The
                Company has been approved by the relevant tax authorities that it
                shall be
                completely exempted from income tax in its first and second profit-making
                years and be allowed a fifty-percent (50%) reduction in its third
                to fifth
                profit-making years,

            


       

      Article
        43

       

      Staff
        members and workers of the Company shall pay individual income tax according
        to
        the "Individual Income Tax Law of the People's Republic of China", as
        supplemented, and relevant treaties for the avoidance of double taxation
        in
        effect between the PRC and other countries.

       

      Article
        44

       

      Allocations
        for reserve funds and expansion funds of the Company and for funds for welfare
        and bonuses for staff and workers shall be set aside in accordance with the
        stipulations in relevant laws and regulations. The annual proportion of
        allocations shall be decided by the Board of Directors according to the business
        situation of the Company. The funds must be deposited in specified bank account
        under the control of the Company and may only be used for the intended
        purposes.

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

       

      Article
        45

       

      	45.1  	
              The
                fiscal year of the Company shall be the calendar year, from January
                1 s'
                to December 3151. All vouchers, receipts, financial statements,
                statistical and other reports and account books prepared by the Company
                shall be written in Chinese and English.

            


       

      	45.2  	
              The
                first fiscal year of the Company shall be deemed to start from 1st
                March
                2005 upon issuance of the new business licence of the Company, and
                shall
                end on December 315' of2005.

            


       

      Article
        46

       

      	46.1  	
              The
                financial and accounting system to be adopted by the Company shall
                be in
                accordance with international accounting standards and relevant laws,
                regulations and rules of the PRC governing finance and accounting
                systems
                and shall be reported to the relevant financial and tax
                bureaus.

            


       

      The
        Company's accounts shall be kept in Renminbi ("RMB"), with equivalent in
        United
        State Dollars indicated.

       

      For
        the
        purpose of preparing the Company's accounts and statements, calculation of
        profits to be distributed to the parties and for any other purposes where
        it may
        be necessary to effect a currency conversion, such conversion shall be made
        using the intermediate exchange rate of such currency as announced by the
        People's Bank of China on the date of actual receipt or payment by the
        Company.

       

      	46.2  	
              Accounting
                statements shall also be prepared in accordance with international
                accounting standards and may be stated in a currency as requested
                by the
                Investor.

            


       

      	46.3  	
              Assets
                of the Company shall be depreciated over a period of years mentioned
                below
                [starting fromis' March 2005:

            


       

      period
        for depreciation on land = nil

       

      period
        for depreciation on buildings = 30 years period for depreciation for machinery
        =
        10 years

       

      period
        for depreciation for intellectual technology, software, cars etc = 5
        years

       

      Article
        47

       

      The
        Company shall submit to the Investors quarterly financial statements in Chinese
        and English language within twenty (20) days after the end of the respective
        quarter and annual financial statements within sixty (60) days after the
        end of
        each fiscal year.

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

       

      Article
        48

       

      Audits
        and examination of the financial accounts of the Company shall be conducted
        by
        certified public accountants registered in the PRC which meet international
        standards, and reports of the results thereof shall be in Chinese and English
        language and submitted to the General Manager, Board of Directors and the
        Investors. The costs of such audits and execution shall be borne by the
        Company

       

      In
        addition, each Investor is entitled to designate duly authorized personnel
        to
        inspect at any time the books of the Company at the expense of such
        party.

       

      Article
        49

       

      Within
        the first fifty (50) days of each fiscal year, the General Manager shall
        have
        the balance sheet and profit and loss statement of the previous fiscal year
        prepared, and shall prepare a proposal regarding the disposal of profits
        and
        submit it to the Board of Directors for examination and approval not later
        than
        within sixty (60) days of the respective fiscal year.

       

      Article
        50

       

      	50.1  	
              The
                Company shall open with one or more banks authorized to do business
                in the
                PRC, RMB and foreign exchange accounts on the strength of its "Foreign
                Investment Enterprises Foreign Exchange Registration
                Certificate".

            


       

      	50.2  	
              The
                Company may after obtaining the approval of the State Administration
                for
                Foreign Exchange, if an approval is requested by the relevant PRC
                laws and
                regulations, open an account with a bank outside the PRC or in Hong
                Kong,
                Taiwan or Macao.

            


       

      	50.3  	
              The
                Company has the responsibility to submit applications to the relevant
                Chinese authorities for the approval of remittance in foreign exchange
                in
                order that dividends and other payments to be made to the Investors,
                payments for principal of and interest for foreign bank loans, payments
                for salaries and other legitimate income of the expatriate personnel,
                payments for purchase abroad, and all other expenses which must be
                paid in
                foreign exchange, can be freely transferred outside the
                PRC.

            


       

      Article
        51

       

      	51.1  	
              All
                matters concerning foreign exchange transactions of the Company shall
                be
                dealt with in accordance with the "Regulations of the People's Republic
                of
                China on Foreign Exchange Control" and other relevant laws and regulations
                in effect.

            


       

      	51.2  	
              If,
                as a consequence of modifications in the currency system of the PRC
                at any
                time throughout the duration of the Company, other or additional
                restrictions on the convertibility of Chinese currency come into
                force,
                the Company shall ensure that it is able to make all payments which
                it is
                required to make in foreign exchange, and shall exert its best efforts
                to
                ensure that profits distributed to the Investors and all other payments
                to
                be made to the Investor are made in foreign exchange or in RMB readily
                convertible into foreign exchange which the Investors may freely
                repatriate.

            


       

      	51.3  	
              Any
                costs incurred relating to the procurement of foreign exchange, shall
                be
                borne by the Company.

            


       

      	51.4  	
              As
                required by PRC law, all payments to be made by the Company shall
                be made
                and settled in Renminbi, unless incurred outside the
                PRC.

            


       

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

       

      Article
        52

       

      	52.1  	
              The
                Company's annual profit shall be subject to taxation in accordance
                with
                relevant laws and as specified in Article 42. After making allocations
                to
                reserve funds, expansion funds and funds for staff and worker welfare
                and
                bonuses under Article 44, the Board of Directors shall declare the
                remainder as net profit for that year, which shall be declared and
                paid to
                the Investors according to the dividend policy under Article
                52.2.

            


       

      	52.2  	
              The
                Investors agree that the dividend policy of the Company shall be
                as
                follows: 

            


       

      
        	 	
                (a)

              	
                If
                  and when either Investor is liable to pay any tax or fiscal duty
                  ("Tax
                  Liability") on basis of its equity interest in the Company, the
                  Investors
                  shall procure that the Company distributes dividend to the Investors
                  within one hundred and fifty (150) days after the close of the
                  previous
                  fiscal year according to the proportion of the shares in the registered
                  capital of the Investors as of the close of the previous fiscal
                  year to
                  the intent that the distributed dividend received by the relevant
                  Investor
                  affected shall be sufficient to cover its Tax Liability; if dividends
                  are
                  distributed, any foreign exchange profits shall first be used to
                  pay the
                  Investor's share of profit; and

              


      

       

      
        	 	
                (b)

              	
                Subject
                  to (a) above, the Investors shall procure that:


              


      

       

      
        	
              	(i)	
                the
                  Company retains its profits for reinvestment;
                  and

              


      

       

      
        	
              	(ii)	
                where
                  there is no imminent need for reinvestment, the issue of dividend
                  shall be
                  decided by the Board of directors of the
                  Company.

              


      

       

      	52.3  	
              When
                profits are distributed to the Investor, the Investors may have such
                profits remitted in Euro or United States Dollars by telegraphic
                transfer
                to the bank and account number designated by the Investor within
                ten (10)
                days after the declaration of profit distribution after deduction
                of
                Chinese taxes, if any, in accordance with the relevant tax laws of
                the
                PRC, or transferred on the Investor's RMB account
                respectively.

            


       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

       

      CHAPTER
        13

      DURATION
        OF THE COMPANY

       

      Article
        53

       

      The
        duration of the Company shall be 15 years, commencing from the date of issuance
        of the business licence after the signing of this Agreement. Any application
        for
        extension of the duration of the Company shall be submitted by the Investor
        to
        the examination and approval authority at least six (6) months prior to the
        expiration of the Company.

       

      CHAPTER
        14

      TERMINATION
        AND LIQUIDATION

       

      Article
        54

       

      	54.1  	
              The
                Investors agreed that only if any of the following conditions arises,
                the
                Company may be terminated by either Investor prior to its expiration
                date
                by written notice to the other Investor and the Board of Directors
                shall
                submit an application for dissolution to be approved by the relevant
                examination and approval authority:

            


       

      	1.      	
              If
                the Company suffers heavy losses for a long lasting period and the
                Investor decides to dissolve it;

            


       

      	2.      	
              If
                the Company is unable to continue operations for a period of 4 months
                due
                to an event of force majeure, as defined in Article
                57;

            


       

      	3.      	
              If
                the Company is unable to attain the objectives stated in these Articles
                of
                Association and has no reasonable prospects for
                development;

            


       

      	4.      	
              If
                the Company goes bankrupt;

            


       

      	5.      	
              If
                the assets of the Company are expropriated or
                requisitioned;

            


       

      	6.      	
              if
                the Investors mutually agree to dissolve the
                Company;

            


       

      	7.      	
              the
                Board of Director resolve not to extend the duration of the Company
                upon
                its expiry of its term.

            


       

      	54.2  	
              Only
                if any of the following conditions arises, the Contract may be terminated
                prior to its stated expiration date by written notice of the
                non-defaulting Party to the other Party:

            


       

      
        	 	
                (1)

              	
                if
                  the Company is unable to continue operations due to the failure
                  of one
                  Party to fulfill its obligations under the Contract or in case
                  of serious
                  breach of the Contract by one Party, within ninety (90) days after
                  receiving written notice from the other Party ("non-defaulting
                  Party");

              


      

       

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

       

      
        	 	
                (2)

              	
                if
                  a petition for bankruptcy proceeding, compulsory composition or
                  liquidation is filed for either Party, the other Party ("non-defaulting
                  Party") may terminate the Contract within ninety (90) days of knowledge
                  of
                  such event;

              


      

       

      
        	 	
                (3)

              	
                if
                  the ownership in an Investor ("First Investor") changes to the
                  extent that
                  any entity in competition to the other Investor ("non-defaulting
                  Party")
                  maintains an economic interest in the First Investor, then the
                  Investor
                  may terminate the Contract within ninety (90) days of knowledge
                  of such
                  event;

              


      

       

      
        	 	
                (4)

              	
                if
                  the Company is unable to obtain foreign exchange to make necessary
                  payments to or distribute profits to Investor ("non-defaulting
                  Party").

              


      

       

      	54.3  	
              Termination
                of the Contract shall be without prejudice to the accrued rights
                and
                obligations of the Parties, including, but not limited to, claims
                of
                damages directly caused by the failure of a Party to fulfill its
                obligations under the Contract.

            


       

      	54.4  	
              Upon
                termination of the Contract under Article 54.2, the non-defaulting
                Party
                shall be entitled to acquire the other Party's share or to sell its
                share
                to the other Party or a third party, at a price determined according
                Article 37 and according to the rules under Article
                35.

            


       

      	54.5  	
              Upon
                termination of the Contract under Article and of the non-defaulting
                Party
                does not exercise its rights under Article 54.2, the members of the
                Board
                of Directors shall meet and vote in favor of
                dissolution.

            


       

      Each
        Party shall cause its nominees to the Board of Directors to vote in favor
        of and
        to submit an application for dissolution to be approved by the examination
        and
        approval authority. In case of termination under Article the members of the
        Board of Directors appointed by the Party which gave cause for termination
        shall
        be deemed to consent to the dissolution.

       

      	54.6  	
              Upon
                expiration or termination of the Contract the relevant provisions
                of the
                Contract shall remain applicable to the settlement of claims arising
                from
                or in connection with the Contract.

            


       

      Article
        55

       

      	55.1  	
              Upon
                expiration of these Articles of Association or their early termination
                pursuant to Article 54 the Company shall be liquidated in accordance
                with
                the "Methods on Liquidation of Foreign Investment Enterprises" dated
                July
                9. 1996 ("Liquidation Methods"). In case of ordinary liquidation
                the Board
                of Directors shall, within fifteen (15) days upon the date of commencement
                of the Liquidation procedures, appoint a Liquidation Committee consisting
                of at least three (3) members to be selected from the members of
                the Board
                of Directors [and/or the members of the management office and/or
                other
                experts]. The Board of Directors shall appoint a Chairman of the
                Liquidation Committee.

            


       

       

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

       

      	55.2  	
              In
                case of liquidation the procedures shall be handled in accordance
                with the
                Liquidation Methods.

            


       

      	55.3  	
              The
                tasks of the Liquidation Committee are: to conduct thorough check
                of the
                property of the Company, its creditors, rights and liabilities, to
                work
                out the statement of assets and liabilities and the list of property,
                to
                formulate a liquidation plan, to prepare the final liquidation report
                and
                all other tasks as stipulated in the Liquidation Methods. All these
                shall,
                in case of an ordinary liquidation, be carried out upon approval
                of the
                Board of Directors and in case of a special liquidation under the
                supervision of the Company's examination and approval
                authority.

            


       

      	55.4  	
              During
                the process of liquidation, the Liquidation Committee shall be the
                legal
                representative of the Company in suing and being
                sued.

            


       

      	55.5  	
              The
                Company shall be liable for its debts with all its assets. The value
                of
                the land use rights of the Company shall be considered an
                asset.

            


       

      	55.6  	
              The
                Liquidation Committee shall solicit offers for selling the business
                of the
                Company, or assets of the Company.

            


       

      	55.7  	
              Upon
                the end of liquidation procedures the books of the Company shall
                be left
                with the organization designated by the examination and approval
                authority
                of the Company.

            


       

      The
        remaining property after the clearance of debts shall be distributed between
        the
        Parties according to the proportion of each Party's share to the registered
        capital provided, however, that any property to be distributed to the Party
        which caused the termination of the Contract by failing to fulfill its
        obligations may be used to pay for the damages sustained by the other Party;
        all
        payments to be made to Investor shall be made in United States-Dollars. The
        Parties may elect to receive their respective share of any distribution in
        kind.

       

      CHAPTER
        15

      RULES
        AND REGULATIONS

       

      Article
        56

       

      The
        following rules and regulations shall be formulated by the Board of
        Directors:

       

      	1.      	
              Management
                regulations. including the powers and functions of the management
                organizations and its working rules and
                procedures;

            


       

      	2.      	
              Rules
                for the staff and workers;

            


       

      	3.      	
              System
                of labor management and salary;

            


       

      	4.      	
              System
                of work attendance record, promotion and awards and penalty for staff
                and
                workers;

            


       

      	5.      	
              Detailed
                rules of staff and workers' welfare;

            


       

      	6.      	
              Financial
                system;

            


       

      	7.      	
              Liquidation
                procedures upon the dissolution of the
                Company;

            


       

      	8.      	
              Other
                necessary rules and regulations (including operation manual on Product
                price list).

            


       

      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

       

      CHAPTER
        16

      FORCE
        MAJEURE

       

      Article
        57

       

      	57.1  	
              If
                any of the Investors or the Company has been prevented from performing
                its
                obligations under these Articles of Associations because of an event
                of
                force majeure such as earthquake, storm, flood, fire, other acts
                of
                nature, epidemic, war, riot, hostility, public disturbance, acts
                of public
                enemies, prohibition or acts by a government or public agency, strikes
                or
                other labor disputes or work stoppage, or other events beyond the
                control
                of the Investor or the Company, and their occurrence is unpreventable
                and
                unavoidable, the Investor so prevented shall notify the Company or
                the
                Company so prevented shall notify the Investor by telefax, telex
                or cable
                in writing within fourteen (14) days after the occurrence of such
                event of
                force majeure, act to mitigate damages, if possible, and within thirty
                (30) days thereafter provide detailed information of the event, a
                certificate of evidence thereof issued by the relevant authorities
                and a
                statement explaining the reason for its inability to perform all
                or part
                of its obligations under these Articles of
                Association.

            


       

      	57.2  	
              If
                an event of force majeure occurs, neither the Investor nor the Company
                shall be responsible for any damage, increased costs or loss which
                any of
                the Investors or the Company may sustain by reason of such failure
                or
                delay of performance. The party claiming force majeure shall take
                appropriate measures to minimize or remove the effect of force majeure
                and, within the shortest possible time, attempt to resume performance
                of
                the obligation(s) affected by the event of force
                majeure.

            


       

      	57.3  	
              The
                Investor shall decide whether to modify or terminate the Company
                according
                to the effects of the event of force
                majeure.

            


       

      CHAPTER
        17

      LIABILITIES
        FOR BREACH OF THE CONTRACT

       

      Article
        58

       

      	58.1  	
              If
                an Investor fails to pay all or part of its capital contribution
                when due
                in accordance with the Contract, such party shall pay as compensation
                for
                default to the Company 0.5 percent (D/D) per month for during the
                first 6
                months of delay and thereafter at one percent (D/D) per month of
                the
                amount or portion thereof or of the value of the assets it has not
                contributed commencing from the first day of the month following
                the date
                such contribution was due.

            


       

      Notwithstanding
        such compensation for default, the non-defaulting Investor may serve notice
        on
        the other Party requiring rectification of such defaults within thirty (30)
        days
        of receipt of notice. If, after expiry of such period, no resolution of default
        or no other agreement has been reached by the Investors, the non-defaulting
        Investor may give notice to the other party that it wishes to dissolve the
        Company or that it wishes to purchase the other Investor's share of the
        registered capital or part thereof in relation to the defaulted capital
        contribution and the other Investor hereby agrees to such purchase or
        dissolution. The purchase price is determined according to Article
        37.

       

      	58.2  	
              The
                Investor that breaks any of the warranties set out in the Contract
                or
                fails to fulfill all or part of its obligations under the Contract
                and its
                Annexes or these Articles shall bear the losses [directly] caused
                to the
                Company and to the other Investor by such failure. Should such failure
                be
                attributable to the fault of both Investors, they shall be liable
                therefore according to their respective degree of
                fault.

            


       

      	58.3  	
              A
                failure or delay by one Investor to require the enforcement on any
                provision of the Contract or these Articles shall not be construed
                as a
                waiver by such Investor of any of its rights nor shall it affect
                the
                validity of the Contract or these Articles or any provision thereof
                at any
                time thereafter.

            


       

      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

       

      CHAPTER
        18

      CONFIDENTIALITY
        AND EXCLUSIVITY

       

      Article
        59

       

      	59.1  	
              The
                Investors shall keep the contents of the Contract , their negotiations
                and
                their project including information relating to management methods,
                technology, know-how, client lists, sales and marketing plans and
                data and
                financial affairs ("Confidential Information"), confidential and
                shall not
                disclose any part thereof to any entity or third party, except as
                required
                to obtain relevant government permits or licenses and except if prior
                written permission has been obtained from the other Investor; the
                Investors shall take all necessary care to prevent third parties
                from
                obtaining knowledge or making use in any way of Confidential
                Information.

            


       

      	59.2  	
              The
                Investors shall take all such steps as shall be reasonably necessary
                at
                their own expense, to prevent or stop every violation of this secrecy
                obligation by a member of their
                personnel.

            


       

      	59.3  	
              Confidentiality
                and non-competition contracts shall be signed by the Company with
                such
                senior employees for which either one of the Investors finds it necessary
                or appropriate.

            


       

      	59.4  	
              This
                secrecy obligation shall apply for the duration of the Company and
                a
                period of five (5) years after its dissolution or
                termination.

            


       

      Unless
        otherwise required by law, any public statement or other public announcement
        relating to the establishing or operation of the Company shall be decided
        by the
        General Manager upon consultation with the Board of Directors.

       

      CHAPTER
        19

      MISCELLANEOUS

       

      Article
        60

       

      Any
        amendment or changes to the Articles of Association shall require the approval
        of the Board of Directors and shall become effective only after a written
        document signed by all the Investors has been approved by the examination
        and
        approval authority.

       

      Article
        61

       

      The
        Articles of Association shall be written in Chinese and in English versions,
        with six (6) sets of each version, and both are equally valid and
        binding.

       

      Article
        62

       

      The
        Articles of Association shall become effective upon the approval by the
        examination and approval authority and the date of issuance of the appropriate
        business license of the Company by the relevant authority whichever date
        is the
        later ("Effective Date").

       

      Article
        63

       

      The
        formation of the Articles of Association, their validity, termination, execution
        and settlement of any disputes arising thereunder shall be governed by the
        promulgated and publicly available laws and regulations of the PRC, provided
        that if no promulgated and publicly available Chinese law governs a particular
        issue, reference shall be made to generally accepted international
        practice.

       

      Any
        dispute arising out of or in relation to these Articles shall be settled
        in
        accordance with the "Dispute Resolution" clause of the Contract.

       

      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

       

      Article
        64

       

      If
        any
        part of these Articles of Association shall become void or invalid by virtue
        of
        law or government order, the remaining parts shall stay valid and the Articles
        of Association shall be fulfilled by the Investors in accordance with its
        general principles, and the void or invalid provision(s) shall be replaced
        by
        such valid provision(s) reflecting closest the intentions of the Investors
        at
        the time of signing the Articles of Association.

       

      Article
        65

       

      The
        Articles of Association are signed in Chinese and English language version,
        by
        the authorized representative of the Investor on 8 April 2005.

       

      Investor
        A :

       

      


      


      


      By: 
        _____________________________

      Name:
        Mr.
        Hans-Willi Mueller

      Title:
        Director

      


      


      Investor
        B :

       

       

      By: 
        _____________________________

      Name:
        Mr.
        Li
        Jian Quan

      Title:  
        Managing
        Director

       

      
        	 	 	 	 
	 	 	 	 
	
                -28-