Exhibit 10.1


    
      

    


    JOINT
      VENTURE CONTRACT

    FOR
      THE ESTABLISHMENT OF

    


    


    Neusoft
      Positron Medical Systems Co., Ltd.

    


    


    By
      and between

    
 

    1. NEUSOFT
      MEDICAL SYSTEMS CO., LTD.

     

    and

     

    2. POSITRON
      CORPORATION


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ANNEXES

    


    
      	
              Annex
                1

            	 	
              Articles
                of Association

            
	 	 	 
	
              Annex
                2

            	 	
              Technologies
                Contribution Agreement

            


    

    

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

    

     

    THIS
      JOINT VENTURE CONTRACT
      is
      entered into this July 30, 2005, in accordance with the Law of the People's
      Republic of China on Chinese-Foreign Equity Joint Ventures and the Regulations
      for the Implementation of the Law of the People's Republic of China on
      Chinese-Foreign Equity Joint Ventures (hereinafter collectively referred to
      as
      the "Joint
      Venture Law")
      and
      other relevant and officially promulgated Chinese laws and regulations by and
      between:

    


    NEUSOFT
      MEDICAL SYSTEMS CO., LTD.,
      a
      limited liability company incorporated under the laws of the P.R.C., with
      registered offices at No. 2 Xinxiu Street, Hun Nan New District, Shenyang
      110179, PRC (hereinafter referred to as "N
      M S");

    


    AND

    


    POSITRON
      CORPORATION,
      a
      limited liability company incorporated under the laws of State of Texas of
      the
      United States of America, with its registered office at 1304 Langham Creek
      Drive, Suite 300, Houston, TX 77084 USA (hereinafter referred to as
      "POSITRON").

    


    NMS
      and
      POSITRON may hereinafter be referred to individually as a "Party"
      or
      collectively as the "Parties".

    


    WHEREAS,
      each of POSITRON and NMS are active in researching, developing, manufacturing,
      marketing and/or selling of Positron Emission Tomography ("PET");
      and

    


    WHEREAS,
      the Parties seek to mutually benefit from each other's strengths, and intend
      to
      cooperate in the research, development and manufacturing of PET, as further
      described below; and

    


    WHEREAS,
      the Parties intend to form an equity joint venture company to be called
      "{
      1:9
      *WC( MAN ri gAh'RW%: aj"
      in
      Chinese and "Neusoft Positron Medical Systems Co., Ltd." in English;
      and

    


    WHEREAS,
      the Parties have agreed that the terms and conditions of the creation of such
      a
      company shall be as set out herein below, subject to such other terms and
      conditions as remain to be negotiated between the Parties; and

    


    WHEREAS,
      the respective board of directors, board of management and/or supervisory board
      of POSITRON and NMS, as applicable, have duly authorized and approved the
      execution of this Joint Venture Contract.

    


    NOW,
      THEREFORE, the Parties express their intentions as follows:

    


    The
      Parties agree that the following terms and conditions have been the agreed
      upon
      terms and conditions of the Joint Venture Contract the Parties intend to enter
      into.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
              1.

            	
              DEFINITIONS

            


    

    


    Unless
      the terms of this Joint Venture Contract provide otherwise, the following terms
      shall have the meanings set forth below:

    


    (a)    "Affiliate",
      with
      respect to a Party, shall mean any corporation, partnership, joint venture
      or
      other entity controlling, controlled by or under common control with such Party,
      but shall not include the Company; a person or entity shall be deemed to
      "control" another person or entity if the former possesses, directly or
      indirectly, at least 51% of the nominal value of the issued share capital and
      the power to direct or cause the direction of the management and policies of
      the
      latter.

    


    (b)    "Articles
      of Association"
      shall
      mean the Articles of Association of the Company dated as of the date hereof
      between the Parties, and as may be amended or restated from time to time by
      the
      Parties.

    


    (c)    "Assist"
      or
      "Assistance"
      shall
      mean, respectively, to actively and aggressively support and implement, or
      the
      active and aggressive support and implementation of, an activity or application
      with full intent and commitment to obtain the results sought by the Party or
      the
      Company which is being assisted.

    


    (d)    "Board"
      or
      "Board
      of Directors"
      shall
      mean the Board of Directors of the Company.

    


    (e)    "Business
      License"
      shall
      mean the business license to be issued to the Company by the competent PRC
      authorities.

    


    (f)    "Business
      Plan"
      shall
      mean the annually renewed 5-year operations plan of the Company as set by the
      Board for implementation by the Management Personnel of the
      Company.

    


    (g)    "Chairman"
      shall
      mean the chairman of the Board of Directors of the Company.

    


    (h)    "China"
      or the
      "PRC" shall mean the People's Republic of China.

    


    (i)    "Company"
      shall
      mean Neusoft POSITRON Medical Systems Co., Ltd., which is the equity joint
      venture company established by the Parties pursuant to the Joint Venture Law,
      other relevant and officially promulgated laws and regulations of the PRC,
      and
      this Contract.

    


    (j)    "Confidential
      Information"
      shall
      mean technology and know-how as well as trade secrets, strategic business or
      marketing information, business projections, secret processes and other
      processes, data, formulae, programs, manuals, designs, sketches, photographs,
      plans, drawings, specifications, reports, studies, findings, non-patented
      inventions and ideas, and other information relating to the production,
      packaging, use, pricing, or sales and distribution, whether of a technical,
      engineering, operational, business or economic nature, whenever designated
      as
      "Confidential" or the like by NMS or POSITRON or their Affiliates and provided
      by NMS, POSITRON or their Affiliates in connection with the establishment of
      the
      Company and any matters related thereto, the implementation of and/or the
      conduct of the business contemplated by this Contract and the other contracts
      contemplated herein. Confidential Information, however, shall not include
      information which is now or hereafter becomes part of the public domain through
      authorized publication, information which the receiving Party can demonstrate
      was in its possession at the time of receipt, and information which hereafter
      comes into the possession of the receiving Party was or is not acquired by
      the
      receiving Party directly or indirectly from the providing Party or sources
      under
      an obligation of secrecy to such providing Party.


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    


    (k)    "Contract"
      shall
      mean this Joint Venture Contract and the Annexes attached hereto.

    


    (l)    "Contribution
      Date"
      shall
      mean the mutually convenient date determined by the Parties in accordance with
      Article 6.3 on which the Parties shall simultaneously contribute all of their
      respective contributions subscribed by themselves to the registered capital
      of
      the Company .

    


    (m)    "Corporate
      Name License Agreement"
      shall
      mean the agreement to be entered into between the Company and POSITRON or NMS
      or
      any of its Affiliate(s) for the license by POSITRON or NMS or such Affiliate(s)
      of its corporate name to the Company.

    


    (n)    "Deputy
      General Manager"
      shall
      mean the deputy general manager of the Company.

    


    (o)    "Director"
      shall
      mean a member of the Board of Directors.

    


    (p)    "Effective
      Date"
      shall
      mean the day on which this Contract has been approved by the Examination and
      Approval Authority.

    


    (q)    "Establishment
      Date"
      shall
      mean the date on which the Business License of the Company is
      issued.

    


    (r)    "Examination
      and Approval Authority"
      shall
      mean the central Ministry of Commerce or such other Chinese authority as is
      duly
      authorized by law to approve this Contract.

    


    (s)    "Event
      of Force Majeure"
      shall
      mean any event, foreseeable or unforeseeable, the consequences of which are
      reasonably unavoidable or beyond the reasonable control of a Party, and which
      prevents total or partial performance of a non-payment obligation under this
      Contract by such Party.

    


    (t)    "Feasibility
      Study"
      shall
      mean the jointly prepared feasibility study as will be prepared by the
      Parties.

    


    (u)    "Foreign
      Exchange"
      shall
      mean any foreign currency which can be freely exchanged, converted, or traded
      in
      the open international currency market.

    


    (v)    "General
      Manager"
      shall
      mean the general manager of the Company.

    


    (w)    "Information"
      shall
      mean drawings, specifications, samples, models, processes, procedures,
      instructions, technology, applied development engineering data, reports, and
      all
      other technical or commercial information, data and documents of any kind
      whatsoever, but excluding any IPRs to which such Information
      relates.


    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    


    (x)    "Intellectual
      Property Rights"
      ("IPRs")
      shall
      mean patents (including reissues, divisions, continuations and extensions
      thereof), utility models, and registered and unregistered designs including
      mask
      works, copyrights and any other form of protection afforded by law to
      inventions, models, designs or technical Information, and applications
      therefor.

    


    (y)    "Invention(s)
      of the Company"
      shall
      mean any invention, discovery or, modification related to any patent, trademark,
      copyright, technology know how or, any intellectual property right, whether
      patentable or not patentable, which is individually or, jointly created,
      developed, conceived or generated by the Company. For the avoidance of doubt,
      Invention of Company shall include any invention, discovery or, modification
      related to any patent, trademark, copyright, technology know how or, any
      intellectual property right, whether patentable or not patentable, which is
      individually or, jointly created, developed, conceived or generated by the
      Company based on the software according to the provisions of the Software
      Sub-license Agreement and the Original Technologies.

    


    (z)    "Joint
      Venture Term"
      shall
      mean the duration of the Company as provided for in Article 21
      hereof.

    


    (aa)         
      "Labour
      Contract"
      shall
      mean the individual labour contract to be entered into between the Company
      and
      each Management Personnel and/or each Company Personnel.

    


    (bb)         
      "Liquidation"
      shall
      mean the adoption of a unanimous Board resolution to terminate the Joint Venture
      Contract pursuant to Articles 22.1(a), (d), (e), (f) or (g) of the Joint Venture
      Contract.

    


    (cc)         
      "Liquidation
      Committee"
      shall
      mean the committee consisting of five (5) members, of whom three (3) shall
      be
      appointed by NMS, two (2) by POSITRON.

    


    (dd)         
      "Management
      Personnel"
      shall
      mean the General Manager, Deputy General Manager and such other senior personnel
      positions that are designated as Management Personnel positions by the Board
      from time to time.

    


    (ee)         
      "Original
      Technologies"
      shall
      mean all the patents and Proprietary Information contributed by POSITRON as
      capital to the Company in accordance with the Technologies Contribution
      Agreement

    


    (ff)          
      "Plant
      Lease Agreement"
      shall
      mean the agreement entered into by and between the Company and NMS or NMS's
      Affiliate concerning the lease of plant by the Company.

    


    (gg)         "Product"
      or
      "Products
      "
      shall
      mean the PET system produced by the Company and the PET/CT created by
      integrating the CT products developed by Philips and Neusoft Medical Systems
      Co., Ltd. with PET system.

    


    (hh)         "Project
      Documents"
      shall
      mean (a) this Contract; (b) Technologies Contribution Agreements; (c) Corporate
      Name License Agreement; (d) Software Sub -license Agreement; (e) Trademark
      License Agreements; and (f) other documents and agreements entered into by
      NMS,
      POSITRON or the Company in connection with the transaction
      hereunder.


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    


    (ii)          
      "Proprietary
      Information"
      shall
      mean in respect to the technology possessed and owned by POSITRON, NMS or the
      Company each, which are specifically related to PET and image handling and
      storage systems, including, all existing and future advanced and technical
      information (i.e. written information, blueprints, pictures, charts, cassettes,
      disks, CDs, video-tapes and information systems), skills, technology and
      experience related to the design, developing, manufacturing, inspecting,
      marketing and selling of PET, which has not been patented and is not patentable,
      and all knowledge and experience related to the aforementioned medical
      technologies. Notwithstanding the foregoing, Proprietary Information shall
      exclude Software Components, which are based upon third party software. For
      the
      avoidance of doubt, Proprietary Information of the Company shall include all
      the
      relevant information contributed by POSITRON to the Company as
      capital.

    


    (jj)          
      "Renminbi"
      or
      "RMB"
      shall
      mean the lawful currency of the PRC.

    


    (kk)         "Site"
      shall
      mean the site located in Shenyang, China, which will be described in the Plant
      Lease Agreement.

    


    (ll)          
      "Software
      Sub-License Agreement"
      shall
      mean the agreement to be entered into between POSITRON and the Company for
      the
      sub-license by POSITRON of certain software to the Company.

    


    (mm)        "Technical
      Documentation of the Company"
      shall
      mean the written documentation, drawings, pictures, charts, cassette-tapes,
      disks, software know how, software platforms, video-tapes, and/or information
      for PET that are possessed and developed by the Company, which are related
      to
      the design, development, assembly, manufacture, quality assurance, management
      and after-sale services of the technology and products.

    


    (nn)         
      "Technologies
      Contribution Agreement"
      shall
      mean the agreement entered into between the Parties hereto in the form described
      in Annex 2 hereto regarding POSITRON's capital contribution in the form of
      technology.

    


    (oo)         
      "Three
      Funds "
      shall
      mean, collectively, the Company's reserve fund, the bonus and welfare fund,
      and
      the enterprise development fund.

    


    (pp)         
      "Trademark
      License Contract"
      shall
      mean the agreement to be entered into between the Company and POSITRON or NMS
      or
      any of its Affiliate(s) for the license by POSITRON or NMS or such Affiliate(s)
      of certain trademarks to the Company.

    


    (qq)         
      "United
      States Dollars"
      or "US"
      shall mean the lawful currency of the United States of America.

    


    (rr)           
      "Working
      Personnel"
      shall
      mean all employees and staff of the Company other than Management Personnel
      and
      members of the Board.


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    


    
      	
              2.

            	
              INTERPRETATION

            


    

    


    
      	 	
              2.1

            	
              Words
                importing the singular shall include the plural and vice versa; words
                denoting persons shall include bodies corporate and unincorporated
                associations of persons and vice
                versa.

            


    

    


    
      	 	
              2.2

            	
              The
                headings in this Contract do not affect its
                interpretation.

            


    

    


    
      	 	
              2.3

            	
              The
                Annexes to this Contract form an integral part of
                it.

            


    

    


    
      	
              3.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE PARTIES


            


    

    


    
      	 	
              3.1

            	
              Representations
                and Warranties of NMS

            


    

    


    NMS
      hereby represents and warrants to POSITRON as follows:

    


    
      	 	
              (a)

            	
              NMS
                is a limited liability company duly organized and validly existing
                under
                the laws of the PRC.

            


    

    


    
      	 	
              (b)

            	
              NMS
                has submitted to POSITRON a valid, true and complete copy of its
                current
                business license bearing a current annual inspection seal from the
                relevant administration for industry and
                commerce.

            


    

    


    
      	 	
              (c)

            	
              Each
                of NMS and its relevant Affiliates has taken all appropriate and
                necessary
                corporate action to (i) empower its legal representative or such
                other
                duly authorized representative whose signature is affixed hereto
                and
                thereto to sign this Contract and all of the contracts contemplated
                herein
                to which it is a party, (ii) authorize the execution and delivery
                of this
                Contract and all of the contracts contemplated herein to which it
                is a
                party, and (iii) authorize the performance and observance of the
                terms and
                conditions hereof and thereof.

            


    

    


    
      	 	
              (d)

            	
              Each
                of NMS and its relevant Affiliates has obtained all consents, approvals
                and authorizations necessary for the valid execution and delivery
                of this
                Contract and all of the contracts contemplated herein to which it
                is a
                Party and to observe and perform its obligations hereunder and thereunder;
                provided, however, that this Contract shall be subject to the approval
                of
                the Examination and Approval Authority or other examination and approval
                authority before the same may become
                effective.

            


    

    


    
      	 	
              (e)

            	
              Upon
                the approval of the Examination and Approval Authority, this Contract
                shall constitute the legal, valid and binding obligation of NMS
                enforceable against NMS in accordance with its
                terms.

            


    

    


    
      	 	
              (f)

            	
              NMS
                's execution, delivery and performance of this Contract or any of
                the
                other contracts contemplated herein will not violate any of their
                constitutive documents, any other agreement or obligation of NMS,
                or
                currently effective law, regulation or decree of China that may be
                applicable to any aspect of the transactions contemplated
                hereunder.

            


    


    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    


    
      	 	
              3.2

            	
              Representations
                and Warranties of POSITRON

            


    

    


    POSITRON
      hereby represents and warrants to NMS as follows:

    


    
      	 	
              (a)

            	
              POSITRON
                is a corporation duly organized, validly existing and in good standing
                under the laws of the State of Texas of the United States of
                America.

            


    

    


    
      	 	
              (b)

            	
              POSITRON
                has submitted to NMS a valid, true and complete copy of its proof
                of
                registration with the Secretary of State of the State of
                Texas.

            


    

    


    
      	 	
              (c)

            	
              POSITRON
                has taken all appropriate and necessary corporate action (i) to empower
                its duly authorized representative whose signature is affixed hereto
                or
                thereto to sign this Contract and all of the contracts contemplated
                herein
                to which it is a party, (ii) authorize the execution and delivery
                of this
                Contract and all of the contracts contemplated herein to which it
                is a
                party, (iii) to authorize the performance and observance of the terms
                and
                conditions hereof and thereof; provided however, this Contract shall
                be
                effective and binding upon POSITRON only when executed by both Gary
                H.
                Brooks and Patrick G. Rooney, POSITRON's President and Chairman,
                respectively.

            


    

    


    
      	 	
              (d)

            	
              POSITRON
                has obtained all consents, approvals and authorizations necessary
                for the
                valid execution and delivery of this Contract and all of the contracts
                referred to herein to which it is a party; provided, however, that
                this
                Contract shall be subject to the approval of the Examination and
                Approval
                Authority before the same may become
                effective.

            


    

    


    
      	 	
              (e)

            	
              Upon
                the approval of the Examination and Approval Authority, this Contract
                shall constitute the legal, valid and binding obligation of POSITRON
                enforceable against POSITRON in accordance with its
                terms.

            


    

    


    
      	 	
              (f)

            	
              Upon
                the Contribution Date, POSITRON shall shut down its product line
                in
                connection with the PET products and stop competing with the Company,
                subject to the terms of this
                Contract.

            


    

    


    
      	 	
              (g)

            	
              POSITRON's
                execution, delivery and performance of this Contract or any of the
                other
                contracts contemplated herein will not violate any of their constitutive
                documents, any other agreement or obligation of POSITRON, or currently
                effective law, regulation or decree of United States of America and
                PRC
                that may be applicable to any aspect of the transactions contemplated
                hereunder.

            


    

    


    
      	
              4.

            	
              ESTABLISHMENT
                OF THE COMPANY

            


    

    


    
      	 	
              4.1

            	
              Establishment
                of the Company

            


    

    


    In
      accordance with the Joint Venture Law and other relevant and officially
      promulgated PRC laws and regulations, the Parties hereby agree to establish
      the
      Company pursuant to the terms of this Contract. The Company shall be a legal
      person under the laws of the PRC subject to the protection and jurisdiction
      of
      PRC law.


    
      
        
        

      

      
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              4.2

            	
              Name
                and Address of the Company

            


    

    


    (a) The
      name
      of the Company shall be "Neusoft Positron Medical Systems Co., Ltd." in English
      and "it
      PEi .'
      I: iz ARA.
      PRiz. "
      in
      Chinese.

    


    
      	 	
              (b)

            	
              The
                legal address of the Company shall be as follows: No. 2 Xinxiu Street,
                Hun
                Nan New District, Shenyang 110179,
                PRC.

            


    

    


    
      	 	
              4.3

            	
              Limited
                Company

            


    

    


    The
      Company shall be a limited company. The liability of each of the Parties for
      the
      obligations, liabilities, debts and losses of the Company shall be limited
      to
      that Party's obligation to make its respective contribution to the registered
      capital of the Company within the period required by Chinese law. Unless it
      has
      agreed otherwise in a separate agreement with a third party, a Party shall
      not
      be liable for any obligations or liabilities of the Company. Creditors of the
      Company shall have recourse only to the assets of the Company and shall not
      have
      any claim against the Parties for the obligations of the Company, and in case
      any creditor of the Company brings any action or claim against any Party for
      any
      act of omission of the Company, the Company shall defend, at its cost, such
      Party and hold harmless such Party against such claims or actions or any loss
      or
      expenses incurred thereby. A Party shall not be required to provide any further
      funds to or on behalf of the Company beyond the amount contributed by the Party
      under this Contract.

    


    
      	 	
              4.4

            	
              Profits
                and Losses

            


    

    


    The
      Parties shall share the profits, losses and risks of the Company in proportion
      to and, in the event of losses, to the extent of their respective contributions
      to the registered capital of the Company.

    


    
      	 	
              4.5

            	
              Other
                Contracts

            


    

    


    Within
      thirty (30) days of the Establishment Date, (i) the Company and NMS or its
      relevant Affiliate shall duly execute the Plant Lease Agreement, the Trademark
      License Contract, the Corporate Name License Agreement; and (ii) the Company
      and
      POSITRON shall duly execute the Technologies Contribution Agreement, the
      Trademark License Contract, the Corporate Name License Agreement and the
      Software Sub - license Agreement. For the avoidance of doubt, no contracts
      in
      place between either Party and a third party shall be assigned to the Company
      without the express written consent of the Board.

    


    
      	 	
              4.6

            	
              Branches
                and Offices

            


    

    


    The
      Company may establish branches or offices in the PRC upon the approval of the
      Board of Directors and registration by the local administration for industry
      and
      commerce where such branch or offices shall be located.


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    
      	
              5.

            	
              PURPOSES,
                SCOPE OF BUSINESS AND SCALE OF PRODUCTION OF THE
                COMPANY

            


    

    


    
      	 	
              5.1

            	
              Purposes
                and Scope of the Company

            


    

    


    The
      purpose and scope of business of the Company shall be research, development,
      manufacturing of the Positron Emission Tomography system (PET), and an
      integrated system (PET/CT) by the X-ray Computed Tomography system (CT) and
      the
      PET system, and providing relevant technical consultation and
      services.

    


    
      	 	
              5.2

            	
              Estimated
                Scale of Production

            


    

    


    The
      estimated scale of production is as set forth in the Feasibility Study. All
      projections, figures, costs, capital and funding requirements contained in
      the
      Feasibility Study are estimates only and may be adjusted by the Board of
      Directors during the actual production and operation of the Company based upon
      the requirements of the market, the ability of the Company to utilize the
      relevant technology and other factors.

    


    
      	
              6.

            	
              TOTAL
                AMOUNT OF INVESTMENT AND REGISTERED CAPITAL
                

            


    

    


    
      	 	
              6.1

            	
              Total
                Amount of Investment

            


    

    


    The
      total
      amount of investment of the Company shall be Two Million Eight Hundred Thousand
      United States Dollars (US $2,800,000).

    


    
      	 	
              6.2

            	
              Registered
                Capital

            


    

    


    The
      registered capital of the Company shall be Two Million United States Dollars
      (US
      $2,000,000) and shall be contributed by the Parties in the following
      proportions:

    


    
      	 	
              (a)

            	
              NMS's
                aggregate contribution to the registered capital of the Company shall
                be
                sixty-seven point five percent (67.5%) of the total registered capital
                of
                the Company, and shall be Renminbi equivalent to One Million Three
                Hundred
                and Fifty Thousand United States Dollars (US$ 1,350,000). NMS's
                contribution shall be made in cash.

            


    

    


    
      	 	
              (b)

            	
              POSITRONS
                aggregate contribution to the registered capital of the Company shall
                be
                thirty two point five percent (32.5%) of the total registered capital
                of
                the Company, and shall be Six Hundred and Fifty Thousand United States
                Dollars (US$ 650,000), among which Two Hundred and Fifty Thousand
                United
                States Dollars (US$ 250,000) shall be made in cash, and Four Hundred
                Thousand United States Dollars (US$ 400,000) shall be made in the
                form of
                the technology (see the Technologies Contribution Agreement for
                details).

            


    

    


    The
      exchange rate of USD/RMB shall be according to the foreign exchange rate
      published by the People's Bank of China on the date of above
      contribution.


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    
      	 	
              6.3

            	
              Timing
                of Capital Contributions

            


    

    


    Contributions
      to the registered capital of the Company shall be made by the Parties in full
      within sixty (60) days after the Establishment Date, and POSITRON shall make
      its
      contribution of technology according to the provisions of the Technologies
      Contribution Agreement. The obligations of a party to make such contributions
      shall be subject to the other party simultaneously making its contributions
      and
      to the Company having received all necessary licenses, permits, leases and
      authorizations necessary to commence and conduct the business contemplated
      by
      this Contract.

    


    
      	 	
              6.4

            	
              Investment
                Certificates

            


    

    


    Within
      sixty (60) days after the Parties have made their capital contributions, the
      Company shall engage an accountant registered in China and approved by the
      Board
      to verify such contributions. Upon the issuance of a verification report by
      such
      accountant, the Company shall issue to each contributing Party an investment
      certificate signed by the Chairman evidencing that the contribution was made.
      Such investment certificate shall be conclusive evidence of each Party's capital
      contribution and equity interest in the Company.

    


    
      	 	
              6.5

            	
              Increase
                or Reduction of Registered
                Capital

            


    

    


    Any
      increase or reduction in the registered capital of the Company shall be approved
      by the Board of Directors and submitted to the Examination and Approval
      Authorities for approval. Upon receipt of such approval, the Company shall
      register the increase or reduction in the registered capital with the
      appropriate administration for industry and commerce. Each Party has the right
      (but no obligation) to contribute towards any increase in the registered capital
      a proportion of such increase equal to the proportion that such Party's
      contributions to the registered capital of the Company, when completed, bear
      to
      the total registered capital of the Company; provided, however, that the Parties
      may agree to adjust their proportional interests in the Company's registered
      capital subject to the approval of the Examination and Approval Authorities.
      In
      the event an increase of the registered capital is reasonably necessary, either
      to fulfill the then-current Business Plan of the Company (which Business Plan
      is
      approved by the Board) or to fulfill the actual requirement (as agreed by the
      Board), and a Party does not want to contribute to such registered capital
      increase, then such Party shall not unreasonably withhold its consent to
      increase the registered capital if the other Party hereto is prepared to
      contribute thereto. Notwithstanding the foregoing, the interest of POSITRON
      shall not be reduced by reason of any increase in the total registered capital
      to less than twenty percent (20%) of such capital.

    


    
      	 	
              6.6

            	
              Indemnification

            


    

    


    Each
      Party hereby agrees to defend and indemnify the Company and the other Party
      hereto, such Party's Affiliates, directors, officers, employees, and agents
      from
      and forever hold harmless the Company and the other Party, such Party's
      Affiliates, directors, officers, employees, and agents against all claims,
      actions, proceedings, damages, losses, liabilities, costs and expenses
      (including reasonable attorney's fees) arising out of, or based upon, a claim
      from any third party that any use of any of the contributions made by the other
      Party hereto, (whether or not incorporated in any products) constitutes
      infringement, or violation or misappropriation of an intellectual property
      right
      or other proprietary right of such third party based upon a legal judgment
      of a
      court of competent jurisdiction.


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    In
      the
      event that a contribution by a Party is held in any suit or proceeding to
      infringe, violate or misappropriate a third party's intellectual property right
      or other proprietary right, the contributing Party agrees that it shall defend
      at its own cost and expenses any suit or proceeding brought by any third party
      against the Company or the company responsible for selling of the Products
      insofar as such suit or proceeding is based on a claim that the contribution
      directly infringes any intellectual property right (IPR) of such third party
      and
      shall indemnify the Company or the company responsible for selling of the
      Products against any final award of damages in such suit or proceeding, provided
      that the contributing Party is notified promptly in writing of any such suit
      or
      proceeding for infringement and provided further that the contributing Party
      is
      given full authority at its option to settle or conduct the defence thereof,
      as
      well as full assistance and cooperation of the Company, and the other Party
      is
      provided for in the contributing Party's defence. No costs or expenses shall
      be
      incurred for the account of the contributing Party without the prior written
      consent of the contributing Party. If no appeal can be taken or is taken to
      the
      final judgment, and the use of the contributing Party's technology is enjoined,
      the contributing Party shall at its own option and at its own expense either:
      (a) replace the contribution, without additional charge, with a compatible,
      functionally equivalent and non-infringing contribution with an equivalent
      or
      better performance; or (b) modify the contribution to avoid the infringement,
      violation or misappropriation such that the performance is not deteriorated;
      or
      (c) procure for the other Party and the Company the right to continue to
      purchase, distribute; and for the other Party, the Company and their customers,
      to use the contribution as contemplated by this Contract.

    


    The
      foregoing states the entire liability of each contributing party in connection
      with the infringement of third party's IPR by the technology provided by each
      contributing party hereunder. For purposes of this Article 6.6, contribution
      of
      technology to the Company is deemed to include the license of technology by
      POSITRON to the Company.

    


    
      	
              7.

            	
              TRANSFER
                OF INTEREST

            


    

    


    
      	 	
              7.1

            	
              Non-Encumbrance

            


    

    


    Neither
      Party may encumber its share of the registered capital or its equity interest,
      rights and obligations under this Contract and other interests in the Company
      (collectively, "Interest")
      without (a) obtaining the required approvals, and (b) the prior written consent
      of the other Party; however, POSITRON does not need to obtain the prior written
      consent of NMS for any lien created in favor of Imagin Diagnostic Centers,
      Inc.,
      Cipher Holding Corporation., or Solaris Opportunity Fund, L.P. or their
      respective assigns ("Positron
      Investors"),
      provided that the enforcement of any lien by any POSITRON Investor will not
      affect POSITRON 's performance of its obligations hereunder.


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    
      	 	
              7.2

            	
              Valuation

            


    

    


    Except
      in
      the event of valuation pursuant to the Article 22.2 of this Contract, any Party
      who desires to sell or otherwise transfer its Interest shall bear the cost
      of
      any valuation of the Company as a going concern. The Parties shall render all
      assistance and provide all such documentation and other information to the
      appraiser as such appraiser may consider necessary and shall ensure that the
      Company provides same.

    


    
      	 	
              7.3

            	
              Transfer
                of Interest

            


    

    


    
      	 	
              (a)

            	
              Subject
                to the provisions of this section 7, a Party may assign, sell or
                otherwise
                dispose of all or part of its Interest in the Company to any third
                party
                (the "Transfer").

            


    

    


    
      	 	
              (b)

            	
              When
                a Party (the "Transferring
                Party")
                wishes to transfer all or part of its Interest to a third party,
                it shall
                provide written notice (the "Notice")
                to the other Party (the "Non-Transferring
                Party")
                specifying its wish to make the Transfer; the Interest it wishes
                to
                transfer; the terms and conditions of the Transfer; and the identity
                of
                the proposed transferee.

            


    

    


    
      	 	
              (c)

            	
              The
                Non-Transferring Party shall have a right of first refusal to purchase
                the
                whole of such offered Interest on terms and conditions no less favourable
                than those specified in the Notice. If the Non-Transferring Party
                elects
                to exercise its right of first refusal, it shall notify the Transferring
                Party in writing within thirty (30) days of the giving of the Notice
                to
                the Non-Transferring Party of its intention to purchase the whole
                of the
                Interest to be transferred and both Parties shall cause the Directors
                appointed by it to approve the Transfer at a duly convened Board
                meeting.
                The Non-Transferring Party shall then, within thirty (30) days following
                its written acceptance, subject only to delays caused by obtaining
                necessary government approvals, purchase such Interest on the terms
                and
                conditions specified in the Notice, unless both Parties agree otherwise
                in
                writing.

            


    

    


    
      	 	
              (d)

            	
              If
                the Non-Transferring Party fails to respond in writing to the Notice
                within such thirty (30)-day period, the Non-Transferring Party shall
                be
                deemed to have consented to the Transfer. If the Non Transferring
                Party
                consents, or is deemed to have consented to the Transfer, the Transferring
                Party shall be free during the period of ninety (90) days following
                the
                expiration of the thirty (30)-day notice period to transfer such
                Interest
                to a third party at a price which equals or exceeds the price specified
                in
                the Notice and on terms and conditions no more favourable to the
                third
                party than those of the original Notice without again complying with
                the
                procedures set forth in Articles 7.3 (b) and (c); provided, however,
                that
                the Transfer shall not be deemed effective and shall be subject to
                rescission unless and until (i) a copy of the transfer agreement
                to be
                executed between the Transferring Party and the transferee has been
                submitted to the Non-Transferring Party and, if only a portion of
                the
                Transferring Party's Interest in the Company is being transferred,
                the
                transferee has agreed therein to assume, jointly and severally with
                the
                Transferring Party, the rights and obligations of the Transferring
                Party
                under this Contract, or, if all of the Transferring Party's Interest
                in
                the Company is being transferred, the transferee has agreed therein
                to
                assume all of the rights and obligations of the Transferring Party
                under
                this Contract, (ii) the Board of Directors unanimously approves the
                Transfer at a duly convened Board meeting, and (iii) all necessary
                amendments to this Contract, the Annexes and other contracts and
                documents
                contemplated herein and therein have been submitted for approval
                to and
                have received the approval of, the Examination and Approval Authority,
                and
                (iv) all other government approvals necessary to give effect to the
                Transfer have been obtained.

            


    


    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    


    
      	 	
              (e)

            	
              The
                Transfer and payment of the purchase price shall be completed within
                such
                ninety (90)-day period, subject only to delays caused by obtaining
                necessary government approvals. If the Transfer is not completed
                within
                such ninety (90)-day period, except for the reason indicated above,
                the
                Transferring Party shall not be permitted to transfer its Interest
                to the
                third party without again complying with the procedures set forth
                in
                Articles 7.3(b) and (c).

            


    

    


    
      	 	
              (f)

            	
              The
                Transferring Party shall provide the Non-Transferring Party with
                a
                duplicate of the executed transfer agreement with the transferee
                within
                fourteen (14) days after such agreement is
                executed.

            


    

    


    
      	 	
              7.4

            	
              Transfer
                to Affiliated Companies

            


    

    


    Notwithstanding
      the provisions of Article 7.3, in the event either Party wishes to transfer
      all
      or part of its Interest in the Company to an Affiliated Company (which for
      purposes of this provision shall include any one or more of the POSITRON
      Investors, provided that the shareholding percentage of such POSITRON
      Investor(s) shall not be less than 20% of all outstanding shares of POSITRON),
      such Party may do so upon the other Party's written consent thereto, which
      shall
      not be unreasonably withheld. The right of first refusal set out in Article
      7.3
      shall not apply in such case.

    


    
      	 	
              7.5

            	
              Continued
                Implementation of Contract

            


    

    


    Until
      the
      date of the Transfer of a Party's Interest, both Parties shall continue to
      fully
      and timely perform their obligations under this Contract.

    


    
      	 	
              7.6

            	
              Effect
                of Transfer

            


    

    


    The
      Transfer of a Party's Interest shall not release such Party from its liability
      to pay any sums of money accrued, due and payable to the other Party, or to
      discharge its then-accrued and unfulfilled obligations including any liability
      to the Company or the other Party in respect of any breach of this Contract
      pursuant to Article 24 hereof.


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    
      	
              8.

            	
              RESPONSIBILITIES
                OF THE PARTIES

            


    

    


    
      	 	
              8.1

            	
              Responsibilities
                of NMS:

            


    

    


    Among
      its
      responsibilities under this Contract, NMS shall:

    


    
      	 	
              (a)

            	
              Make
                its contributions to the registered capital of the Company in accordance
                with the relevant provisions of this
                Contract;

            


    

    


    
      	 	
              (b)

            	
              Enter
                into, or cause its Affiliates to enter into, the Annexes hereto and
                any
                other contracts contemplated herein to which it or any of its Affiliates
                is a party;

            


    

    


    
      	 	
              (c)

            	
              Assist
                the Company in obtaining the Business License providing for a term
                of
                validity and scope of business acceptable to both
                Parties;

            


    

    


    
      	 	
              (d)

            	
              Assist
                the Company in handling the registration of the Company's right to
                use the
                Sites with all relevant government departments and handling all other
                necessary procedures to ensure that the Company has the right to
                use the
                Sites for the Joint Venture Term;

            


    

    


    
      	 	
              (e)

            	
              Assist
                the Company in obtaining the Chinese tax preferences, holidays and
                concessions and other preferential tax treatment available to or
                for the
                Company;

            


    

    


    
      	 	
              (f)

            	
              Assist
                the Company, if requested, in handling all licenses, approvals and
                registrations for the importation of technology in accordance with
                the
                terms set forth in the Technologies Contribution Agreement and Software
                Sub-License Agreement;

            


    

    


    
      	 	
              (g)

            	
              Assist
                the Company with the smooth transfer of employees from NMS who are
                recruited by the Company;

            


    

    


    
      	 	
              (h)

            	
              Supply
                to the Company such CT products as the Company may require for its
                Products at prices not greater than the lesser of (i) cost plus 8%,
                or
                (ii) the lowest price at which such products are sold to unaffiliated
                parties; and

            


    

    


    
      	 	
              (i)

            	
              Handle
                other matters entrusted to it by the Company and as agreed from time
                to
                time by NMS.

            


    

    


    
      	 	
              8.2

            	
              Responsibilities
                of POSITRON:

            


    

    


    Among
      its
      responsibilities under this Contract, POSITRON shall:

    


    
      	 	
              (a)

            	
              Make
                its contributions to the registered capital of the Company in accordance
                with the relevant provisions of this
                Contract;

            


    

    


    
      	 	
              (b)

            	
              Enter
                into the Annexes hereto and any other contracts contemplated herein
                to
                which it is a party;

            


    

    


    
      	 	
              (c)

            	
              Handle
                export license and other procedures for the Company necessary for
                the
                export of technology from United States of America pursuant to the
                Technologies Contribution Agreement and Software Sub -License
                Agreement;

            


    

    


    
      	 	
              (d)

            	
              Assist
                the Company to obtain the necessary approval from the relevant authorities
                for the import of technology and the technology contribution of POSITRON
                into the Company, including but not limited to providing the list
                of such
                technologies and relevant documents to the Company and relevant
                authorities;

            


    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    


    
      	 	
              (e)

            	
              (e)
                Assist the Company with the smooth transfer of one hardware engineer
                to
                the Company, and such engineer shall work full-time at the Company
                for at
                least one year;

            


    

    


    
      	 	
              (f)

            	
              Assist
                the Company in obtaining the Business License providing for a term
                of
                validity and scope of business acceptable to both
                Parties;

            


    

    


    
      	 	
              (g)

            	
              Make
                great efforts to assist the Company to recruit competent employees
                from
                United States of America to work at the
                Company;

            


    

    


    
      	 	
              (h)

            	
              Provide
                certain training to selected employees of the Company, the expenses
                for
                which shall be borne by the Company;
                and

            


    

    


    
      	 	
              (i)

            	
              Handle
                other matters entrusted to it by the Company and agreed from time
                to time
                by POSITRON.

            


    

    


    
      	
              9.

            	
              LEASE
                OF THE SITES AND BUILDING

            


    

    


    
      	 	
              9.1

            	
              The
                sites to be determined.

            


    

    


    
      	
              10.

            	
              OWNERSHIP
                AND LICENSING OF IPR 

            


    

    


    
      	 	
              10.1

            	
              Licensing
                of Trademark

            


    

    


    Each
      Party shall itself, or cause its relevant Affiliate to, license to the Company
      on a royalty- free basis certain trademarks pursuant to the terms and conditions
      set forth in the Trademark License Agreement.

    


    
      	 	
              10.2

            	
              Ownership
                of Patents, Patent Rights and Proprietary
                Information

            


    

    


    
      	
            	10.2.1	
              Ownership
                of Inversion of the Company during the term of this
                Contract

            


    

    


    Any
      Invention of the Company shall be individually owned by the Company. Subjection
      to the provisions of Section 10.2.3 below, the Company shall have the full
      right
      to make, have made, use, sell or otherwise dispose of products, methods and
      processes incorporating any and all such Invention of the Company, and to grant
      licenses or sublicenses under such Invention of the Company, without the consent
      of and without any obligation to account to either Party. The Company shall
      provide to the Parties full and complete information relating to each Invention
      of the Company not less frequently than semi-annually and upon Dissolution
      of
      the Company.


    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    


    
      	
            	10.2.2	
              Ownership
                of Invention of the Company after Dissolution of the
                Company.

            


    

    


    After
      the
      Dissolution of the Company, all Inventions of the Company shall be jointly
      owned
      by POSITRON and NMS and each co-owner shall have an equal undivided right in
      and
      to such Invention of the Company and in and to any patents based on such
      Invention of the Company and each joint owner of such Invention of the Company
      shall have the nontransferable right to make, have made, use, sell or otherwise
      dispose of products, methods and processes under any and all such Invention
      of
      the Company and to grant nonexclusive licenses or sublicenses under such
      Invention of the Company, without the consent of and without any obligation
      to
      account to the other Party.

    


    
      	
            	10.2.3	
              Ownership
                of the Original Technologies after the Dissolution of the
                Company

            


    

    


    If
      the
      Dissolution of the Company shall take place within three (3) years from the
      Establishment Date, then the Company shall assign back to POSITRON all the
      Original Technologies contributed by POSITRON pursuant to the Technologies
      Contribution Agreement subject to the then effective and applicable laws and
      regulations of PRC.

    


    If
      the
      Dissolution of the Company shall take place after three (3) years from the
      Establishment Date, all the Original Technologies contributed by POSITRON
      pursuant to the Technologies Contribution Agreement shall be jointly owned
      by
      NMS and POSITRON and each of the joint owners shall have an equal, undivided
      ownership and interest in and to such Original Technologies; provided however,
      that NMS shall have entered into an agreement with POSITRON to supply CT
      equipment for a period of not less than five years at not more than the price
      at
      which such equipment is sold to the Company prior to dissolution. In this case,
      both NMS and POSITRON shall have the right to conduct R&D and production
      business relating to PET products.

    


    
      	
              11.

            	
              PURCHASE
                OF MATERIALS

            


    

    


    The
      Company will purchase components, machinery and equipment from suppliers on
      a
      best value basis, acting always in accordance with market-oriented
      principles.

    


    
      	
              12.

            	
              SALES
                OF PRODUCTS 

            


    

    


    
      	 	
              12.1

            	
              General
                principle

            


    

    


    Subject
      to Clause 12.1 (a), the Company will sell Products manufactured by the Company
      to both Parties for further resale in the PRC market and international market.
      After the ramp-up period of the Company, each Party shall have rights to and
      risk obligations for its capacity of Products required from the Company. The
      Parties intend that the manufacturing capacity of the Company shall be shared
      on
      an equivalent basis to each Party's contribution to the registered capital
      of
      the Company, as measured by the manufacturing work and resources needed by
      the
      Company for the resulting Products. With due regard to the Product mix
      requirements as specified in the Business Plans, the Business Plans shall
      contain in detail the total capacity equivalent of the Company and the resulting
      equivalent capacity for each Party as based on the manufacturing work and
      resources needed. The Parties will each provide an industry common rolling
      forecast for Products needed to the Company, in accordance with the purchase
      and
      sale agreements to be entered into between the Company and the
      Parties.


    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    


    Notwithstanding
      the above, both Parties agree that (1) POSITRON shall have exclusive right
      to
      sell PET system of the Products in Canada and such products shall be sold under
      its registered trademarks, (2) POSITRON shall have exclusive right to sell
      PET/CT product of the Products in Canada and such products shall be sold under
      the trademark of "Neusoft POSITRON", (3) POSITRON shall have exclusive right
      to
      sell PET system of the Products in the US and Mexico and such products shall
      be
      sold under its registered trademarks, (4) POSITRON and NMS shall have equal
      right to sell PET/CT product of the Products in US and Mexico and such products
      shall be sold under the trademark of "Neusoft Positron", (5) NMS shall have
      the
      exclusive right to sell the Products in China and the Products shall be sold
      under its registered trademarks, and (6) NMS shall have the right to sell the
      Products in the countries and regions worldwide except for China, Canada, US
      and
      Mexico, and the Products shall be sold through its sales channels under its
      registered trademarks. Priorities for production shall be based on cash down
      payments received from customers by the Parties. This Contract does not commit
      either party to purchase any specific number of Products.

    


    
      	 	
              12.2

            	
              The
                Products shall be sold to the Parties for further resale, and the
                transfer
                price of the Products shall be calculated as follows:

            


    

    


    The
      profit and transfer price for the Company's sale of the Products shall be
      calculated according to the following formulas:

    


    Profit
      =
      (A+B)x 8% 

    


    Transfer
      price=A+B+Profit

    


    
      	 	
              (a)

            	
              "A"
                means the cost of the raw
                materials;

            


    

    


    
      	 	
              (b)

            	
              "B"
                means other expenses, including but not limited to labour cost, cost
                related to R&D, rental fee, depreciation and amortization, training
                fee, travelling fee, public utility fee, custom duty and VAT,
                administrative expenditures, financial cost, and other fees agreed
                by the
                Parties from time to time, with the exception of income
                tax.

            


    

    


    
      	 	
              12.3

            	
              NMS's
                Undertakings

            


    

    


    NMS
      undertakes that it will take the responsibility to sell one set of Product
      within 6 six month after the Company's prototype machine obtains the
      certification from the PRC State Food and Drug Administration (SFDA), and 5
      sets
      of Product during the next year following the foregoing 6-month
      period.

    


    
      	
              13.

            	
              BOARD
                OF DIRECTORS

            


    

    


    
      	 	
              13.1

            	
              Establishment

            


    

    


    The
      Board
      of Directors of the Company shall be established by the Parties and shall hold
      its first meeting within ninety (90) days of the Establishment
      Date.

    


    
      	 	
              13.2

            	
              Composition
                and Term

            


    

    


    The
      Board
      of Directors shall be composed of five (5) Directors, of whom three (3) shall
      be
      appointed by NMS and two (2) by POSITRON. Unless the Parties otherwise agree
      in
      writing, the Chairman shall be appointed by NMS and POSITRON shall appoint
      a
      Vice Chairman. Each individual serving in the capacity of Director, Chairman
      or
      Vice Chairman shall be appointed for a term of four (4) years, and each shall
      be
      eligible for consecutive terms of office upon reappointment by the original
      appointing Party. Any vacancy created in the Board of Directors shall be filled
      by the Party which originally appointed the absent Director causing the vacancy.
      Any Party may at any time remove for any reason any or all of the individuals
      appointed by such Party as a Director and appoint in lieu thereof another
      individual or individuals to serve the remainder of the relevant
      term(s).


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    


    
      	 	
              13.3

            	
              Legal
                Representative

            


    

    


    The
      Chairman of the Board shall be the legal representative of the Company and
      shall
      act only in accordance with the specific decisions, resolutions and instructions
      of the Board of Directors. Whenever the Chairman is unable to discharge his
      duties, the Vice Chairman is authorized to represent the Company. Each Director,
      in his capacity as a Director, shall serve in a non executive role.

    


    
      	 	
              13.4

            	
              Authority

            


    

    


    The
      Board
      of Directors shall be the highest authority of the Company and shall make
      decisions on all major and important matters of the Company. The rules of
      procedure governing the Board of Directors and its powers and responsibilities
      are as set forth in this Contract and the Articles of Association.
      Notwithstanding the foregoing, all transactions between the Company and a Party
      and/or its Affiliates shall be on an arm's length basis.

    


    
      	 	
              13.5

            	
              Personal
                Liability of Directors

            


    

    


    A
      Director, including the Chairman and Vice Chairmen, shall not have personal
      liability for action he undertakes on behalf of the Company within the scope
      of
      authority of this Contract, the Articles of Association or the Board resolutions
      unless his or her action:

    


    
      	 	
              (a)

            	
              is
                outside the scope of the approval or authorization given to him by
                this
                Contract or the Board of Directors' resolution ;
                or

            


    

    


    
      	 	
              (b)

            	
              is
                in breach of Articles 59 to 63 of the Company Law of
                PRC.

            


    

    


    Any
      Director, including the Chairman and Vice Chairmen, acting in violation of
      this
      Contract or Board of Director's resolutions shall indemnify and hold harmless
      the Company against all losses caused to or liabilities and expenses incurred
      by
      the Company. The Company shall, to the extent permitted by law, indemnify any
      Director for damages or losses incurred in good faith by such Director in the
      performance of his or her obligations.

    


    
      	 	
              13.6

            	
              Unanimous
                Approval

            


    

    


    Resolutions
      of the Board of Directors involving the following matters shall be adopted
      only
      upon the unanimous affirmative vote of all five (5) Directors (whether present
      in person, by conference phone or by proxy) at a duly convened
      meeting:

    


    
      	 	
              (a)

            	
              Amendment
                of the Articles of Association;

            


    


    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    


    
      	 	
              (b)

            	
              Increase,
                reduction or assignment of registered capital and the adjustment
                of each
                Party's share of interest in the registered capital of the
                Company;

            


    

    


    
      	 	
              (c)

            	
              Merger
                or consolidation of the Company with any other economic organization
                or
                reorganization of the Company; and

            


    

    


    
      	 	
              (d)

            	
              Extension,
                termination, Liquidation or dissolution of the
                Company.

            


    

    


    In
      the
      event not all five (5) Directors are present (whether in person, by conference
      phone or by proxy) in a meeting where any of the foregoing matters is on the
      agenda, such matter(s) will be discussed at the same location and time fourteen
      (14) days later. If, at the reconvened Board meeting, still not all five (5)
      Directors are present (whether present in person, by conference phone or by
      proxy), then any resolution on the foregoing matters that is agreed upon by
      all
      of the Directors present shall be circulated in writing to the Directors that
      were not present. Failure to react in writing by such Director(s) within thirty
      (30) days after receipt of such resolution shall be deemed to constitute
      agreement to such resolution by such Director.

    


    
      	 	
              13.7

            	
              Other
                Decisions of the Board

            


    

    


    Except
      for those matters set forth in Article 13.6, resolutions of the Board of
      Directors shall be adopted by the affirmative vote of not less than three (3)
      Directors for all other matters of the Company.

    


    
      	 	
              13.8

            	
              Deadlock

            


    

    


    If
      no
      five (5) Directors are able to collectively agree to vote in favour or against
      a
      resolution on any matters set forth in Article 13.6, the Board of Directors
      will
      be deemed to be in deadlock ("Deadlock") and the Chairman shall not have a
      casting vote. Upon the occurrence of Deadlock, the General Manager shall prepare
      and deliver a full report regarding the unsuccessfully resolved matter to the
      Chairman of NMS and the Chairman of POSITRON, or such other person each Party
      may nominate in writing, within thirty (30) days of the date of Deadlock. The
      representatives of the Parties shall have an additional thirty (30) days from
      the date of receipt of such report or such longer period as they may agree
      to
      successfully conciliate such matter. If the representatives of the Parties
      do
      not successfully resolve such matter during such relevant period,
      then:

    


    
      	 	
              (a)

            	
              if
                neither Party wishes to continue the business of the Company as a
                going
                concern, the provisions of Article 22.1(e) shall apply;
                or

            


    

    


    
      	 	
              (b)

            	
              if
                only one (1) Party desires to carry on the business of the Company
                as a
                going concern, the other Party may sell its Interest to the Party
                desiring
                to carry on the business of the Company in accordance with Article
                7.4;
                or

            


    

    


    
      	 	
              (c)

            	
              if
                both Parties wish to continue the business of the Company as a going
                concern, the provisions of Article 22.2(b) shall apply;
                or

            


    

    


    
      	 	
              (d)

            	
              failing
                all of the foregoing, the matter shall be submitted for resolution
                in
                accordance with Article 28 of this
                Contract.

            


    


    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    


    Both
      Parties shall continue to perform their obligations under this Contract during
      the period of Deadlock.

    


    
      	 	
              13.9

            	
              Board
                Meetings

            


    

    


    The
      regular meeting of the Board of Directors shall in principle be held twice
      a
      year. Meetings of the Board of Directors shall normally be held at the
      registered address of the Company, but may be held at any other place as may
      be
      jointly selected by the Chairman and the Vice Chairman.

    


    
      	 	
              13.10

            	
              Interim
                Board Meeting

            


    

    


    Within
      three (3) days after the receipt of a proposal by at least two- fifths (2/5)
      of
      the Directors requesting that an interim Board meeting be held, either the
      Chairman, or in his absence or failure to act, the Vice Chairman, of the Board
      shall send written notice calling an interim Board meeting, which meeting must
      be held no later than thirty (30) days after receipt of such
      proposal.

    


    
      	 	
              13.11

            	
              Notice
                of Meetings

            


    

    


    The
      Chairman, or in his absence or failure to act, the Vice Chairman, shall send
      written notice at least thirty (30) days prior to any Board meeting stating
      the
      specific agenda, time and place of the meeting. Such notice may be waived by
      the
      unanimous consent of all Directors attending the meeting in person or by proxy.
      A Board meeting shall be convened not less than thirty (30) days or more than
      sixty (60) days from the date of the notice.

    


    
      	 	
              13.12

            	
              Attendance

            


    

    


    A
      Director may attend a Board meeting in person, by conference telephone or
      designate another person by proxy and vote in his place. Such designation shall
      be in writing, shall be signed by the Director, and shall identify the meeting
      or meetings at which the person may act as a proxy and any instructions that
      may
      be applicable to the proxy. A Director may appoint another Director as his
      proxy. A person acting as a proxy may do so for more than one
      Director.

    


    
      	 	
              13.13

            	
              Quorum
                for Meetings

            


    

    


    The
      quorum for a Board meeting shall consist of four-fifths (4/5) of the Directors
      (i.e. four (4) Directors) present in person or by conference telephone or by
      proxy. However, if proper notice to convene a Board meeting has been given
      and
      if the Directors appointed by a Party fail to attend the meeting by themselves
      or by proxy or by conference telephone, and therefore a quorum is not present
      in
      accordance with the preceding sentence, such Board meeting shall be adjourned
      and reconvened at the same location and time fourteen (14) days later. If,
      at
      the reconvened Board meeting, these Directors still fail to attend the Board
      meeting by themselves or by proxy or by conference telephone, then the person
      presiding over the reconvened Board meeting shall be deemed to be appointed
      by
      these Directors as their representatives to attend the Board meeting and vote
      in
      respect of resolutions (the proposal of which shall have already been set out
      in
      the enclosures of the notice of the Board meeting). Resolutions passed in such
      manner shall also have full legal effect.


    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    


    
      	 	
              13.14

            	
              Voting

            


    

    


    The
      Directors may vote on any matters either by attending meetings in person, by
      telephonic conference or by proxy. Each Director shall have one vote. Matters
      not requiring a unanimous vote by the Board of Directors shall be decided by
      a
      simple majority vote of the Directors at a meeting at which a quorum is present.
      No Director shall have a casting vote.

    


    
      	 	
              13.15

            	
              Written
                Consent

            


    

    


    The
      Board
      of Directors may conduct any business and make decisions and take actions that
      could have been otherwise duly taken pursuant to a Board meeting by means of
      a
      unanimous written consent in lieu of a meeting.

    


    
      	 	
              13.16

            	
              Compensation
                and Expenses

            


    

    


    The
      Company shall not pay any fee, remuneration or subsidy to any Director for
      attendance at a Board meeting. The expenses incurred by the Directors shall
      be
      for the account of the respective appointing Party.

    


    
      	 	
              13.17

            	
              Minutes

            


    

    


    Minutes
      shall be kept for each Board meeting and signed by all Directors present at
      the
      Board meeting in person or by proxy. In order to facilitate the smooth conduct
      of Board meetings, the Chairman shall appoint a Company Secretary for the
      purpose of the Board meeting. The duties of such Company Secretary shall be
      to
      take detailed minutes of the Board meeting, procure the proper signatures for
      the adoption of such minutes, translate or arrange for the translation of
      documents and dispatch documents relating to the Board meeting to the Directors.
      Minutes of the Board meeting shall be maintained in both Chinese and English.
      Copies of the minutes in both Chinese and English languages shall be sent to
      NMS
      and POSITRON at the addresses set forth in Article 29.5.

    


    
      	 	
              13.18

            	
              Further
                Policies and Procedures

            


    

    


    The
      Company shall abide by any other policies and procedures adopted by the Board.
      The Parties shall take all appropriate action to cause the Board of Directors
      to
      adopt standards of conduct and business practices in conformity with the laws
      and regulations of the PRC.

    


    
      	
              14.

            	
              MANAGEMENT
                ORGANIZATION 

            


    

    


    
      	 	
              14.1

            	
              Establishment

            


    

    


    
      	 	
              (a)

            	
              The
                Board of Directors of the Company shall establish a management
                organization comprised of Management Personnel who shall be in charge
                of
                the day-to-day operations and management of the Company. The management
                organization shall be headed by one (1) General Manager. The General
                Manager shall be nominated by NMS. The Company shall initially have
                the
                following managerial departments: R&D and Manufacturing (including
                Sourcing and Logistics); Finance and Accounting; Administration (including
                Human Resources and Government Relations, etc.). The Company's initial
                Management Personnel shall be as follows: one (1) Administration
                Manager,
                one (1) Finance and Accounting Manager and one (1) R&D and
                Manufacturing Manager as nominated by NMS; as well as one (1) Deputy
                R&D and Manufacturing Manager, one (1) Deputy Finance and Accounting
                Manager as nominated by POSITRON. The above management personnel
                shall be
                nominated by the Parties, but shall only be appointed or removed
                by the
                Board. Without prejudice to the foregoing, the actual management
                organization of the Company may deviate from time to time from the
                positions set out above, based on mutual consent of the
                Parties.

            


    


    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    


    
      	 	
              (b)

            	
              Each
                Party agrees to cause the Directors appointed by it to approve all
                persons
                nominated to Management Personnel positions; provided, however, that
                each
                Party may veto the nomination of any candidate for a Management Personnel
                position if such candidate fails to meet the criteria ascribed to
                the
                position for which the candidate is nominated as may be provided
                in the
                Articles of Association or otherwise determined by the General Manager
                and
                the vetoing Party provides reasonable evidence of such failure. Each
                individual serving in the capacity of Management Personnel shall
                be
                appointed for a term of two (2) years, and each shall be eligible
                for
                consecutive terms of office if re-nominated by the original nominating
                Party. If it becomes necessary, due to dismissal or resignation,
                to
                replace the individual serving in the capacity of Management Personnel,
                the Party that originally nominated such individual shall nominate
                a
                replacement to serve the remainder of the relevant
                term.

            


    

    


    
      	 	
              (c)

            	
              The
                duties of the General Manager shall consist of carrying out the decisions
                of the Board of Directors and organizing and directing the day-to-day
                operations and management of the
                Company.

            


    

    


    
      	 	
              (d)

            	
              Any
                Management Personnel are forbidden from concurrently serving or working
                in
                any other company, unit, entity or organization whatsoever unless
                expressly approved by the Board.

            


    

    


    
      	 	
              14.2

            	
              Employment

            


    

    


    Each
      Management Personnel shall execute a Labour Contract with the Company. The
      specific powers and responsibilities of Management Personnel shall be prescribed
      in the relevant provisions of the Articles of Association of the Company. No
      Management Personnel shall have any personal liability for any acts performed
      in
      good faith, in the normal course of their employment and within the scope of
      activities permitted to be engaged in by such Management Personnel as set forth
      in this Contract and the Articles of Association.

    


    Each
      Management Personnel (other than the General Manager) shall receive his
      assignment from and shall report to the General Manager and shall be subject
      to
      removal at any time by the Board. In the event a manager is removed, the Party
      that originally nominated such manager shall nominate another individual for
      such position. The General Manager shall have the right to appoint an interim
      manager if such Party fails to nominate another individual within thirty (30)
      days of such individual's removal.


    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    


    
      	 	
              14.3

            	
              Compensation

            


    

    


    Matters
      such as salaries, wages, subsidies, benefits, insurance, allowances, rewards
      and
      other compensation matters of Management Personnel shall be stipulated in the
      Labour Contract between the Company and such Management Personnel. The Parties
      acknowledge that Management Personnel (including the expatriate Seconded
      Personnel) shall be compensated based on standards of the territory where the
      Company is located.

    


    
      	 	
              14.4

            	
              Confidentiality

            


    

    


    Each
      Management Personnel shall, as a condition to employment by the Company, execute
      an agreement in form and substance acceptable to the General Manager which
      shall
      contain provisions prohibiting the disclosure of confidential information
      obtained during the course of employment with the Company and restricting the
      ability of such Management Personnel to compete with the business of the
      Company.

    


    
      	
              15.

            	
              LABOUR
                MANAGEMENT 

            


    

    


    
      	 	
              15.1

            	
              Enterprise
                Autonomy

            


    

    


    The
      Company shall have all possible autonomy under the laws and regulations of
      the
      PRC concerning the recruitment, employment, compensation, designation of welfare
      benefits, procurement of labour insurance, promotion, discipline and dismissal
      of Working Personnel. The labour policies of the Company shall be determined
      in
      accordance with applicable PRC labour laws and regulations and the relevant
      regulations of Liaoning Province and Shenyang Municipality on labour management
      in foreign investment enterprises, and shall further be guided by the NMS HR
      principles in place before the Effective Date of this Contract. Labour union
      matters shall be handled in accordance with the applicable labour union law
      at
      such time.

    


    
      	 	
              15.2

            	
              Employment

            


    

    


    The
      qualification and number of Working Personnel shall be determined in accordance
      with the operating needs of the Company as determined by the General Manager,
      subject to the guidance and instructions from the Board of Directors. Each
      Working Personnel shall, as a condition to employment by the Company, execute
      a
      Labour Contract with the Company, which shall contain provisions prohibiting
      the
      disclosure of confidential information obtained during the course of employment
      with the Company and restricting the ability of such Working Personnel to
      compete with the Company. Working Personnel shall observe the various rules
      and
      regulations of the business of the Company in fulfilling their respective tasks.
      The General Manager may, subject to the guidance of the HR Manager, subject
      further to the General Business Principles of POSITRON, and according to the
      degree of seriousness of the case, give warnings, record demerits, deduct wages,
      dismiss, or otherwise remove any Working Personnel who has violated the terms
      of
      his or her Labour Contract or the rules, regulations or labour discipline of
      the
      Company. The HR Manager shall serve as compliance officer of the Company under
      the General Business Principles.


    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    


    
      	 	
              15.3

            	
              Compensation

            


    

    


    Matters
      such as compensation, wages, subsidies, benefits, insurance, allowances,
      rewards, and other compensation matters of Working Personnel shall be stipulated
      in the Labour Contract between the Company and each Working Personnel, in
      addition to provisions prohibiting each Working Personnel to disclose
      information obtained during the course of employment with the Company, which
      shall also be included in each such Labour Contract.

    


    
      	
              16.

            	
              ANNUAL
                OPERATING PLANS AND BUDGETS


            


    

    


    
      	 	
              16.1

            	
              Preparation

            


    

    


    The
      General Manager shall be responsible for the preparation of the annual operating
      plans and budgets of the Company. The operating plan and budget for the next
      fiscal year shall be submitted to the Board of Directors after sign-off of
      the
      General Manager for examination and approval prior to November 1 of each year
      and shall include detailed plans and projections regarding:

    


    
      	 	
              (a)

            	
              procurement
                of materials, machinery, equipment and other capital expenditures
                of the
                Company;

            


    

    


    
      	 	
              (b)

            	
              plans
                and policies with respect to the manufacture of the
                Products;

            


    

    


    
      	 	
              (c)

            	
              estimated
                revenues, expenditures and profits of the
                Company;

            


    

    


    
      	 	
              (d)

            	
              staffing
                levels and plans for training personnel of the
                Company;

            


    

    


    
      	 	
              (e)

            	
              R&D,
                Product roadmap, projects and investment
                plans;

            


    

    


    
      	 	
              (f)

            	
              annual
                production and sales plan agreements with the different local and
                international sales organizations.

            


    

    


    
      	 	
              16.2

            	
              Examination
                and Implementation

            


    

    


    The
      Board
      of Directors shall complete its examination and approval of each annual
      operating plan and budget for the next fiscal year prior to the end of December
      31 of each year. The General Manager shall be responsible for the implementation
      of the annual operating plan and budget as approved by the Board.

    


    
      	 	
              16.3

            	
              R&D
                Budget

            


    

    


    The
      Board
      of Directors shall ensure that an adequate amount of R&D funding shall be
      made available as set out in, and in order to fulfill, the Business Plan,
      ensuring sustainable growth, efficiency improvement as well as an appropriate
      quality level of the Products.


    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    


    
      	
              17.

            	
              TAXATION,
                THREE FUNDS AND PROFIT DISTRIBUTION


            


    

    


    
      	 	
              17.1

            	
              Tax
                Treatment

            


    

    


    The
      Company shall pay taxes in accordance with relevant Chinese laws and regulations
      and shall enjoy all preferential tax and customs treatment available to it
      under
      the PRC law.

    


    
      	 	
              17.2

            	
              Three
                Funds

            


    

    


    After
      fully making up accumulated losses of previous years, if any, and payment of
      taxes in accordance with the relevant laws and regulations of the PRC, the
      Company shall allocate a percentage of its annual after-tax profit for
      contribution towards the Three Funds. The amount to be allocated to the Three
      Funds shall be decided by the Board of Directors on a yearly basis in accordance
      with the financial performance of the Company, in light of the relevant laws
      and
      regulations of the PRC.

    


    
      	 	
              17.3

            	
              Profit
                Distribution

            


    

    


    
      	 	
              (a)

            	
              After
                paying taxes in accordance with the law and making contributions
                to the
                Three Funds, the remaining earnings of the Company shall be available
                for
                dividend distribution to the Parties. The General Manager shall recommend
                a dividend distribution plan to the Board of Directors within the
                first
                three (3) months following the end of each fiscal year of the Company
                for
                the Board's consideration and approval or modification. In his or
                her
                recommendation, the General Manager shall consider that the Company
                has
                sufficient funds on hand to pay the dividends and meet its approved
                capital expenditure budget and working capital requirement for the
                current
                budget year. The Company shall not distribute dividends unless the
                losses
                of previous fiscal year(s) have been fully made up. Remaining
                undistributed dividend from previous years may be distributed together
                with that of the current year and the Board of Directors may authorise
                the
                payment of dividends from undistributed dividends from previous years
                at
                any time.

            


    

    


    
      	 	
              (b)

            	
              Dividends
                shall be distributed to the Parties in proportion to each Party's
                holding
                of the registered capital of the Company at the time of the distribution.
                Payment of dividend distributions to POSITRON shall be in United
                States
                Dollars and POSITRONS right to receive previous declared dividends
                shall
                not lapse due to unavailability of Foreign Exchange. The rate of
                exchange
                for all Renminbi amounts that are required to be converted to United
                States Dollars for payment of such dividends shall be the rate announced
                by the People's Bank of China for the conversion from Renminbi to
                United
                States Dollars on the date that dividends are
                declared.

            


    


    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    


    
      	
              18.

            	
              FINANCIAL
                AFFAIRS AND ACCOUNTING 

            


    

    


    
      	 	
              18.1

            	
              Accounting
                System

            


    

    


    
      	 	
              (a)

            	
              The
                Company shall maintain its accounts in accordance with officially
                promulgated PRC laws and regulations and the provisions of this Contract
                and the Articles of Association and in a manner sufficient to satisfy
                the
                generally accepted accounting principles and the financial and tax
                reporting requirements of both Parties. The Finance and Accounting
                Manager, under the supervision of the General Manager, shall establish
                the
                accounting system and procedures for the
                Company.

            


    

    


    
      	 	
              (b)

            	
              The
                fiscal year of the Company shall start on January 1 of the year and
                end on
                December 31 of the same year. The first fiscal year of the Company
                shall
                commence on the Establishment Date and end on December 31 of the
                same
                year. The last fiscal year of the Company shall start on January
                1 of the
                year of termination and end on the date of
                termination.

            


    

    


    
      	 	
              18.2

            	
              Books
                and Records

            


    

    


    The
      Company shall keep true and correct records and accounts in accordance with
      applicable PRC accounting laws and regulations.

    


    
      	 	
              18.3

            	
              Inspection
                of Books and Records

            


    

    


    Each
      Party shall have the right to examine and copy all books of account, records,
      vouchers, contracts and documents of any kind that are necessary or appropriate
      for monitoring the financial performance of the Company. Each Party may make
      such examination and copies during the Company's normal business hours, provided
      that such examination and copying does not unreasonably interfere with the
      business operations of the Company. Each Party may exercise such rights through
      its agent or employee or by an independent accounting firm designated by the
      Party at the cost and expense of such Party.

    


    
      	 	
              18.4

            	
              Accounting
                Unit

            


    

    


    The
      currency of accounts of the Company shall be determined by the Board of
      Directors of the Company. When foreign currency transactions take place, the
      foreign currency amount will be translated into the reporting currency for
      recording purposes. Any increase or decrease in the balance of accounts relating
      to foreign currency transactions shall be translated into the currency of
      account in accordance with the official Foreign Exchange rate announced by
      the
      People's Bank of China on the transaction date or on the first day of the month
      when the transaction takes place.


    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    


    
      	 	
              18.5

            	
              Reports

            


    

    


    The
      Company shall prepare and provide to the Parties:

    


    
      	 	
              (a)

            	
              Within
                ninety (90) days after the last day of each fiscal year, the balance
                sheet
                of the Company as of the end of such fiscal year and the related
                profit
                and loss statement and statement of cash flows for the fiscal year
                then
                ended, in each case audited as provided
                below.

            


    

    


    
      	 	
              (b)

            	
              Within
                thirty (30) days after the last day of each financial quarter, the
                unaudited balance sheet of the Company as of the end of such quarter
                and
                the related profit and loss statement (for such quarter and for the
                year-to-date).

            


    

    


    
      	 	
              (c)

            	
              Within
                thirty (30) days after the last day of each month, (i) a profit and
                loss
                statement for such month; and (ii) a forecast/outlook for the remainder
                of
                the current fiscal quarter as well as the next fiscal quarter, which
                shall
                include without limitation the number of personnel, revenue, cash
                balance
                and expenses.

            


    

    


    
      	 	
              18.6

            	
              Audit

            


    

    


    An
      independent and reputable international accounting firm licensed in China and
      approved by the Board shall be engaged by the Company as its auditor to examine
      and verify the annual financial statements of the Company and shall submit
      the
      audit report to the Board and the General Manager. Either Party shall also
      have
      the right not more than once in each fiscal year, to appoint either its own
      internal audit department or an accountant registered in China or abroad to
      audit the accounts of the Company. If the results of any such audit are
      significantly different from that conducted by the Company's auditors and are
      accepted by the Board, the expense of the audit shall be borne by the Company,
      and re-audits may take place by either Party more frequently than once per
      fiscal year until there is no significant difference anymore. The Company will
      permit such accountant to have access to the Company's books and records and
      Management Personnel and will provide such accountant with office space and
      all
      other reasonable facilities to enable the accountant to carry out the
      audit.

    


    
      	 	
              18.7

            	
              Provision
                of Returns

            


    

    


    The
      Company shall provide, without charge, to any Party that may so request a copy
      of each tax return and report that it is required to file with any governmental
      entity in sufficient time prior to such filing to permit its review by such
      Party prior to filing.

    


    
      	
              19.

            	
              BANK
                ACCOUNTS AND FOREIGN EXCHANGE


            


    

    


    
      	 	
              19.1

            	
              Bank
                Accounts

            


    

    


    The
      Company shall open RMB deposit accounts and Foreign Exchange deposit accounts
      with authorized banks in China. The Company may also open Foreign Exchange
      deposit accounts with foreign banks outside China as designated by the Board
      of
      Directors subject to approval by the relevant government
      authorities.

    


    
      	 	
              19.2

            	
              Foreign
                Exchange Requirements of the
                Company

            


    

    


    All
      of
      the Company's Foreign Exchange receipts shall be deposited in its Foreign
      Exchange accounts and all the payments in Foreign Exchange shall be made from
      its Foreign Exchange deposit accounts. In addition to payment of dividend
      distributions to POSITRON, other payments to be made by the Company to POSITRON
      and/or to any expatriate employees of the Company shall be made in United States
      Dollars. The Company shall, according to applicable laws and regulations of
      PRC,
      remit all the money to be paid by the Company to POSITRON, including the money
      to be paid upon the dissolution of the Company, to the account designated by
      POSITRON.


    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    


    
      	
              20.

            	
              CONFIDENTIALITY
                AND NON-COMPETITION

            


    

    


    
      	 	
              20.1

            	
              Confidentiality

            


    

    


    
      	 	
              (a)

            	
              Each
                of the Parties acknowledges and agrees that the discharge of its
                obligations under this Contract and the contracts and documents referred
                to herein to which it is a party will involve the disclosure of
                Confidential Information.

            


    

    


    
      	 	
              (b)

            	
              The
                Parties and their Affiliates shall use the Confidential Information
                only
                for the purposes specified in this Contract, the Annexes and the
                other
                contracts and documents contemplated, herein and therein to which
                it is a
                party, and shall not disclose any Confidential Information to third
                parties without the prior written consent of the Party providing
                such
                Confidential Information; provided, however, (i) that a Party may
                be
                permitted to disc lose Confidential Information received by it to
                its
                Affiliate(s) when such disclosure is necessary for such Party to
                carry out
                its obligations under this Contract, the Articles of Association
                or the
                other contracts referred to herein upon the execution of a non-disclosure
                agreement between such Affiliate(s) and the Party providing the
                Confidential Information, and (ii) that either Party may disclose
                certain
                required Confidential Information to the relevant stock exchange
                authorities in the event this is required under applicable regulations,
                provided, however, that such Party shall always provide timely and
                detailed written notice to the other Party in such event. Each Party
                warrants the full adherence of its Affiliates to these confidentiality
                obligations, and hereby fully and unconditionally guarantees such
                adherence by its Affiliates.

            


    

    


    
      	 	
              (c)

            	
              The
                Company, the Parties and their respective Affiliates that receive
                Confidential Information shall make such Confidential Information
                available only to those of their directors, managers and personnel
                whose
                duties necessitate familiarity with such Confidential Information
                and
                shall cause such directors, managers and personnel also to comply
                with the
                confidentiality obligations set forth in Article
                20.1(b).

            


    

    


    
      	 	
              (d)

            	
              The
                confidentiality obligations set forth in this Article 20.1 shall
                be
                maintained during the Joint Venture Term and for an additional period
                of
                five (5) years after the termination of this Contract; subject to
                the
                rights of the Parties following Dissolution or termination as provided
                in
                this Contract.

            


    

    


    
      	 	
              20.2

            	
              Non-Competition

            


    

    


    For
      a
      period of 5 years from the Effective Date of this Contract, neither Party
      hereto, nor any of their Affiliates, will have another joint venture or other
      form of cooperation with a third party with respect to the development,
      manufacturing or procurement of finished products which are the same or similar
      to the Products; provided, however, in the event that either Party shall
      determine in reasonable good faith that the Company has failed its purpose
      of
      supplying the Parties with the Products in accordance with the Business Plan,
      then such Party, by notice to the other, may terminate this provision; provided
      further, that this provision shall terminate upon termination of this Contract
      pursuant to Article 22 or Article 23.


    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    


    
      	
              21.

            	
              DURATION
                OF THE COMPANY

            


    

    


    The
      Joint
      Venture Term shall commence on the Establishment Date and shall continue for
      an
      initial period of ten (10) years or until terminated pursuant to Article 22
      hereof. Not less than two (2) years prior to the expiration of the initial
      period of ten (10) years or any subsequent extended period, the Parties or
      their
      approved successors shall commence discussions on the extension of the period
      of
      this Contract. However, if a written agreement for the extension of the Joint
      Venture Term is not signed between the parties twenty-four (24) months prior
      to
      the expiration of the then current period of existence (or by such later date
      as
      the parties may agree and applicable PRC law then permits), this Contract shall
      end upon expiry of such current period of existence.

    


    
      	
              22.

            	
              EARLY
                TERMINATION 

            


    

    


    
      	 	
              22.1

            	
              Triggering
                Events

            


    

    


    This
      Contract may be terminated in the event that any of the conditions or events
      set
      forth below occurs:

    


    
      	 	
              (a)

            	
              Either
                Party fails to make its contributions to the registered capital of
                the
                Company on the Contribution Date and such failure continues for a
                period
                of more than ninety (90) days and is not waived by the other Party.
                In
                such case, either Party may give notice of
                termination.

            


    

    


    
      	 	
              (b)

            	
              There
                occurs a material breach of this Contract and such breach is not
                cured by
                the breaching Party within sixty (60) days after receipt of written
                notice
                of the breach from the non-breaching Party. In such case, the
                non-breaching Party may give notice of
                termination.

            


    

    


    
      	 	
              (c)

            	
              Any
                Party or its relevant Affiliate fails to perform any of its material
                obligations under the Annexes or any other contract referred to herein
                if,
                in the reasonable opinion of the non-breaching Party, such non-performance
                creates a material risk of loss to such non-breaching Party or the
                Company
                and such risk is not cured by the breaching party within sixty (60)
                days
                after receipt of notice from the non breaching Party. In such case,
                the
                non-breaching Party may give notice of
                termination.

            


    

    


    
      	 	
              (d)

            	
              The
                Company sustains serious losses for three (3) consecutive years or
                the
                Company is unable to attain its business goals and, after consultation,
                the Parties are unable to agree on a Business Plan to improve the
                economic
                situation of the Company. In such case, either Party may give notice
                of
                termination.

            


    


    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    


    
      	 	
              (e)

            	
              Deadlock
                occurs and neither Party wishes to continue the business of the Company
                as
                a going concern. In such case, either Party may give notice of
                termination.

            


    

    


    
      	 	
              (f)

            	
              Total
                or partial performance of this Contract is prevented by an Event
                of Force
                Majeure lasting for more than one hundred and twenty (120) consecutive
                days and, after consultation, the Parties are unable to agree on
                a method
                to perform this Contract. In such case, either Party may give notice
                of
                termination, provided, however, that in the case of partial performance
                being prevented, such partial performance is material to the
                Company.

            


    

    


    
      	 	
              (g)

            	
              The
                Parties mutually agree to terminate this Contract and agree on the
                terms
                for the dissolution of the Company. In such case, the Company and
                its
                assets shall be dealt with in accordance with such agreement and
                applicable law.

            


    

    


    
      	 	
              22.2

            	
              Purchase
                of the Company as a Going
                Concern

            


    

    


    
      	 	
              (a)

            	
              In
                the event that (1) one (1) Party is the subject of proceedings for
                Liquidation or dissolution or ceases to carry on business, or (2)
                notice
                of termination is given by a Party pursuant to Article 22.1(b) or
                (c), the
                remaining or non-breaching Party may elect to purchase the Company
                as a
                going concern in accordance with the procedures set forth
                below:

            


    

    


    
      	 	
              (b)

            	
              Each
                Party shall, at its own cost, engage a reputable, independent and
                qualified appraiser to appraise the Company as a going concern with
                the
                same instruction going to the two appraisers. The average of the
                two
                appraisals shall be considered the fair market value ("Fair Market
                Value")
                of the Company, provided that, if only one Party engages such an
                appraiser, the purchase price shall be based on that one appraiser's
                valuation. In the event the appraisals (or, in the case of ranges
                of
                values, the averages of the two ranges) deviate more than 100% (e.g.
                200-420) then the following applies: A third appraiser, being a top
                5
                internationally reputed investment bank, will be appointed by the
                Parties
                at the cost of the Company, which investment bank must choose within
                thirty (30) days between one and the other appraisal, and such choice
                will
                constitute the binding Fair Market
                Value.

            


    

    


    
      	 	
              (i)

            	
              The
                purchasing Party shall purchase the Interest of the selling Party
                in the
                Company for a purchase price equal to the percentage interest that
                such
                selling Party then currently holds in the registered capital of the
                Company multiplied by the Fair Market Value of the Company; provided
                however, that the purchase price paid to POSITRON in the event NMS
                is the
                purchasing Party shall be not less than USD
                $20,000,000.

            


    


    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    


    
      	 	
              (c)

            	
              After
                determination of the purchase price, the Parties shall execute a
                purchase
                and sale agreement and shall use their best efforts to secure, within
                thirty (30) days of the execution of such purchase and sale agreement,
                all
                necessary governmental approvals required to give effect to such
                purchase
                and sale agreement. The closing of such purchase and sale shall occur
                within fifteen (15) days following approval of the purchase and sale
                agreement; provided, however, that the selling Party shall not be
                required
                to complete any sale pursuant to this Article 22.2 unless the entire
                purchase price is paid in the lawful currency of, or a currency which
                may
                be freely converted and remitted to, the jurisdiction of organization
                of
                the selling Party.

            


    

    


    
      	 	
              (i)

            	
              After
                approval of the purchase and sale agreement has been obtained and
                the
                purchase price has been paid in accordance with (iii) above, the
                Parties
                shall terminate this Contract, the Annexes and all of the contracts
                contemplated herein by a writing executed by the duly authorized
                representative of each of the
                Parties.

            


    

    


    
      	 	
              (d)

            	
              In
                the event that Deadlock occurs and both Parties wish to continue
                the
                business of the Company as a going concern, the Fair Market Value
                shall be
                determined pursuant to Article 22.2(a) (i) and an auction shall be
                conducted by the Company's auditor to determine which Party shall
                sell its
                Interest to the other Party. During such auction, each Party shall
                bid
                openly for the purchase of the other Party's Interest, and each Party
                may
                repeatedly place a higher bid than the other Party until the highest
                bid
                has been made. No bid shall be lower than the applicable percentage
                held
                by the selling Party in the registered capital of the Company multiplied
                by the Fair Market Value of the Company. The Party making the highest
                bid
                (per percentage interest) shall be entitled to purchase the Interest
                of
                the other Party. After determination of the final purchase price,
                the
                procedures set forth in Articles 22.2(a) (iii) and (iv) shall apply.
                Notwithstanding the foregoing, any purchase price paid to POSITRON
                in the
                event NMS is the purchasing Party shall be not less than USD
                $20,000,000.

            


    

    


    
      	 	
              (e)

            	
              Both
                Parties shall continue to perform their obligations under this Contract
                prior to completion of Article 22.2(a)(iv)
                above.

            


    

    


    
      	
              23.

            	
              LIQUIDATION
                AND DISSOLUTION 

            


    

    


    
      	 	
              23.1

            	
              Liquidation

            


    

    


    Upon
      the
      adoption of a unanimous Board resolution to terminate this Contract pursuant
      to
      Articles 22.1(a), (d), (e), (f) or (g) and approval by the Examination and
      Approval Authority to dissolve the Company, the Parties shall cause the
      Directors appointed by them to adopt a resolution to liquidate the Company
      and
      establish a Liquidation Committee. The composition, powers and functions of
      the
      Liquidation Committee, formulation of Liquidation procedures, and payment of
      Liquidation proceeds shall be as set forth in the Articles of
      Association.

    


    
      	 	
              23.2

            	
              Effect
                of Dissolution or Sale as a Going
                Concern

            


    

    


    The
      dissolution of the Company or sale of the Company as a going concern, shall
      not
      release a Party from its liability to pay any sums of money accrued, due and
      payable to the other Party, or to discharge its then-accrued and unfulfilled
      obligations including any liability to the Company or the other Party in respect
      of any breach of this Contract pursuant to Article 24 hereof.


    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    


    
      	 	
              23.3

            	
              Termination

            


    

    


    After
      the
      Liquidation of the Company is completed and the Company has been effectively
      dissolved, the Parties shall terminate this Contract, the Articles of
      Association and all of the contracts contemplated herein by a writing executed
      by the duly authorized representative of each of the Parties.

    


    
      	
              24.

            	
              LIABILITY
                FOR BREACH OF CONTRACT

            


    

    


    
      	 	
              24.1

            	
              Breach
                of Contract

            


    

    


    If
      a
      Party fails to perform any of its material obligations under this Contract,
      or
      if a representation or warranty made by a Party under this Contract is untrue
      or
      materially inaccurate, the Party shall be deemed to have breached this
      Contract.

    


    
      	 	
              24.2

            	
              Failure
                to Pay Capital Contributions

            


    

    


    Provided
      that each of the conditions in Article 6.4(a) has either been expressly
      fulfilled or waived by the Parties, should one of the Parties fail to pay any
      portion of its contribution to the registered capital of the Company at the
      time
      and in the amounts stipulated in Article 6 of this Contract, such Party shall
      be
      deemed to be in breach of the Contract and, in addition to any liability it
      may
      incur for such breach, such Party shall pay to the Company a late contribution
      penalty at a monthly rate equal to the then applicable shortest-term lending
      rate published by the People's Bank of China for United States Dollar loans
      on
      the amount of the contribution due and unpaid for as long as such contribution
      is due and unpaid plus three percent (3%).

    


    
      	 	
              24.3

            	
              Continued
                Implementation of Contract

            


    

    


    During
      the period of breach, the Parties shall in all other respects continue their
      implementation of this Contract.

    


    
      	
              25.

            	
              INSURANCE

            


    

    


    The
      Company shall, at its own cost and expense and at all times during the operation
      of the Company, procure and maintain full and adequate insurance coverage in
      a
      manner prudent and advisable for the Company. The relevant insurance policies
      may be obtained from any insurance company authorized to provide such policies
      in the PRC. The types of insurance (which shall include product liability
      insurance) and the value, duration and denomination of the currency of the
      premiums and insurance proceeds shall be determined by the Board of Directors
      based upon the recommendation of the General Manager based on the practices
      of
      similar business in other countries and the actual circumstances in the
      PRC.

    


    
      	
              26.

            	
              FORCE
                MAJEURE 

            


    

    


    
      	 	
              26.1

            	
              Performance
                of Obligations

            


    

    


    If
      any
      Party is prevented from performing any of its obligations excluding the payment
      of monies due hereunder which payment obligations are hereby specifically
      stipulated to be outside the scope of the definition of Event of Force Majeure
      under this Contract due to an Event of Force Majeure, the time for performance
      of the obligations under this Contract specifically prevented from performance
      by such Event of Force Majeure shall be extended by a period equal to the period
      of delay caused by such Event of Force Majeure. A Party claiming inability
      to
      perform due to an Event of Force Majeure shall take appropriate means to
      minimize or remove the effects of the Event of Force Majeure and, within the
      shortest possible time, attempt to resume performance of the obligation(s)
      affected by the Event of Force Majeure. If an Event of Force Majeure occurs,
      no
      Party shall be responsible for any damage, increased costs or loss which the
      other Parties may sustain by reason of such a failure or delay of performance,
      and such failure or delay shall not be deemed a breach of this Contract. All
      other obligations under this Contract and the time for performance thereof
      shall
      remain unaffected.


    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    


    
      	 	
              26.2

            	
              Notice

            


    

    


    The
      affected Party shall immediately notify the other Party of the occurrence of
      any
      Event of Force Majeure in accordance with Article 29.5 and shall provide
      available evidence thereof. Should the delay caused by any Event of Force
      Majeure continue for more than ninety (90) consecutive days, the Parties shall
      settle the issue of further performance of this Contract through friendly
      negotiations or in accordance with Article 22.1(f).

    


    
      	 	
              26.3

            	
              Continued
                Implementation of Contract

            


    

    


    During
      the period of an Event of Force Majeure, the Parties shall in all other respects
      continue their implementation of this Contract.

    


    
      	
              27.

            	
              APPLICABLE
                LAW 

            


    

    


    
      	 	
              27.1

            	
              Governing
                Law

            


    

    


    The
      laws
      or regulations of the PRC which are officially published and publicly available
      shall apply to and govern the formation, validity, interpretation and
      implementation of this Contract.

    


    
      	
              28.

            	
              DISPUTE
                RESOLUTION 

            


    

    


    
      	 	
              28.1

            	
              Arbitration

            


    

    


    
      	 	
              (a)

            	
              Any
                dispute arising from, out of or in connection with this Contract
                shall be
                settled through friendly consultations between the Parties. Such
                consultations shall begin immediately after a Party has delivered
                to the
                other Party a written request for such consultation. If within forty-five
                (45) days following the date on which such notice is given, the dispute
                cannot be settled through consultations, the dispute shall, upon
                the
                request of any Party with notice to the other Party, be submitted
                to
                arbitration at Singapore International Arbitration Center in
                Singapore.

            


    


    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    


    
      	 	
              (b)

            	
              There
                shall be three (3) arbitrators, who shall be appointed in accordance
                with
                the Rules of Arbitration of the United Nations Commission on International
                Trade Law ("UNCITRAL") which are effective at that
                time.

            


    

    


    
      	 	
              (c)

            	
              The
                arbitration proceedings shall be conducted in Chinese. The arbitration
                tribunal shall apply the Rules of UNCITRAL which are effective at
                that
                time.

            


    

    


    
      	 	
              (d)

            	
              Each
                Party shall cooperate with the other Party in making full disclosure
                of
                and providing complete access to all information and documents requested
                by the other Party in connection with such proceedings, subject only
                to
                any confidentiality obligations binding on such
                Party.

            


    

    


    
      	 	
              (e)

            	
              The
                arbitral award shall be final and binding upon all Parties, not subject
                to
                any appeal, and shall deal with the question of costs of arbitration
                and
                all matters related thereto.

            


    

    


    
      	 	
              (f)

            	
              Judgment
                upon the award rendered by the arbitration may be entered into any
                court
                having jurisdiction, or application may be made to such court for
                a
                judicial recognition of the award or any order of enforcement
                thereof.

            


    

    


    
      	 	
              28.2

            	
              Continued
                Implementation of Contract

            


    

    


    During
      the period when a dispute is being resolved, the Parties shall in all other
      respects continue their implementation of this Contract.

    


    
      	
              29.

            	
              MISCELLANEOUS
                

            


    

    


    
      	 	
              29.1

            	
              Language

            


    

    


    This
      Contract is executed in English and Chinese in eight (8) original counterparts
      in each language. Both language versions shall have equal validity. In case
      of
      any disparity, the Chinese version shall govern.

    


    
      	 	
              29.2

            	
              Entire
                Agreement

            


    

    


    This
      Contract and the other contracts contemplated herein constitute the entire
      agreement among NMS and POSITRON with respect to the subject matters set forth
      herein and therein and supersede all prior discussions, notes, memoranda,
      negotiations, understandings and all the documents and agreements between them
      relating to the same. All documents, agreements, understandings and
      correspondence between the Parties prior to the execution of this Contract
      shall, with the exception of any non-disclosure/confidentiality undertakings,
      become null and void automatically when this Contract enters into
      effect.

    


    
      	 	
              29.3

            	
              Amendment

            


    

    


    Amendments
      to this Contract and the other contracts contemplated herein may be made only
      by
      a written agreement in English and Chinese signed by duly authorized
      representatives of each of the Parties. This Contract and its annexes shall
      become effective upon approval from the Ministry of Commerce of the PRC or
      its
      authorized department.


    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    


    
      	 	
              29.4

            	
              Conflict
                or Inconsistency

            


    

    


    The
      rights and obligations of the Parties established by and under this Contract
      shall continue to exist throughout the Joint Venture Term and shall not be
      prejudiced by the establishment of the Company, the adoption of the Articles
      of
      Association or the execution of any of the contracts contemplated herein. In
      the
      event of any conflict or inconsistency between this Contract on the one hand
      and
      the Annexes on the other, this Contract shall prevail over the
      Annexes.

    


    
      	 	
              29.5

            	
              Notices

            


    

    


    Notices
      or other communications required to be given by any Party or the Company
      pursuant b this Contract shall be written in English and may be delivered
      personally, sent by registered airmail (postage prepaid) by a recognized courier
      service, or sent by facsimile transmission to the address of the other Party
      set
      forth below or such other address notified in lieu thereof. The dates on which
      notices shall be deemed to have been effectively given shall be determined
      as
      follows:

    


    
      	 	
              (a)

            	
              Notices
                given by personal delivery shall be deemed effectively given on the
                date
                of personal delivery.

            


    

    


    
      	 	
              (b)

            	
              Notices
                given by registered airmail (postage prepaid) shall be deemed effectively
                given on the seventh (7th) day after the date on which they were
                mailed
                (as indicated by the postmark).

            


    

    


    
      	 	
              (c)

            	
              Notices
                given by air courier shall be deemed effectively given on the date
                of
                delivery (as indicated by the airway
                bill).

            


    

    


    
      	 	
              (d)

            	
              Notices
                given by facsimile transmission shall be deemed effectively given
                on the
                first (1st) business day following the date of
                transmission.

            


    

    


    For
      the
      purpose of notices, the addresses of the Parties are as follows:

    


    
      	
              NMS:
                

            	 	
              Neusoft
                Park, Hun Nan New District 

            
	 	 	
              Shenyang
                110179, Liaoning Province 

            
	 	 	
              People's
                Republic of China

            
	 	 	 
	
              Attention:

            	 	
              Quanlu
                Zheng, President

            
	
              Telephone
                No.:

            	 	
              (86
                )24 2378 2784

            
	
              Facsimile
                No.:

            	 	
              (86
                )24 8378 0480

            
	 	 	 
	
              POSITRON:

            	 	
              Positron
                Corporation

            
	 	 	
              1304
                Langham Creek Drive, Suite 300 

            
	 	 	
              Houston,
                TX 77084

            
	 	 	 
	
              Attention:

            	 	
              Gary
                H. Brooks, CEO and President

            
	
              Telephone
                No:

            	 	
              (011)
                281 492-7100

            
	
              Facsimile
                No:

            	 	
              (011)
                281 492-2961

            


    


    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    


    Any
      Party
      may at any time change its address for service of notice or communication in
      writing delivered to the other Party in accordance with the terms
      hereof.

    


    
      	 	
              29.6

            	
              Waiver

            


    

    


    Unless
      otherwise provided for, failure or delay on the part of any Party to exercise
      any right or privilege under this Contract shall not operate as a waiver of
      such
      right or privilege nor shall any partial exercise of any right or privilege
      preclude any further exercise thereof. Any waiver by a Party of a breach of
      any
      term or provision of this Contract shall not be construed as a waiver by such
      Party of any subsequent breach, its rights under such term or provision, or
      any
      of its other rights hereunder.

    


    
      	 	
              29.7

            	
              Survival

            


    

    


    The
      following Articles shall survive the termination or expiration of this Contract:
      1, 2, 3, 6, 7, 10.2, 20, 23, 27, 28.1 and 29.

    


    
      	 	
              29.8

            	
              Headings

            


    

    


    The
      headings contained in this Contract are for reference only and shall not be
      deemed to be a part of this Contract or to affect the meaning or interpretation
      hereof.


    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      the
      Parties hereto have caused this Contract to be executed as of the date first
      above written by their duly authorized representatives.

    


    


    
      	
              NEUSOFT
                MEDICAL SYSTEMS CO., LTD.

            
	 	 
	 	 
	
              By:

            	 
	
              Name:

            	
              Liu
                Jiren

            
	
              Title:

            	
              Chairman

            
	 	 
	 	 
	
              POSITRON
                CORPORATION

            
	 	 
	 	 
	
              By:

            	 
	
              Name:

            	
              Gary
                H. Brooks

            
	
              Title:

            	
              President
                and Chief Executive Officer

            
	 	 
	
              By:

            	 
	
              Name:

            	
              Patrick
                G. Rooney

            
	
              Title:

            	
              Chairman
                of the Board

            


    

     

    -37-