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Exhibit 10.1    
    

 
 

EMPLOYMENT AGREEMENT    
    

        THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of December 18, 2002 ("Effective Date"), by and between China Hospitals, Inc.
("Company"), and Frank Hu, an individual ("Employee"). 

RECITALS 

        A.    The
Company desires to appoint Employee as its Chairman of the Board ("Chairman") and Chief Executive Officer ("CEO"), in order to retain Employee's experience, skills,
abilities, background and knowledge and is, therefore, willing to engage his services upon the terms herein contained. 

        B.    Employee
desires to accept the appointment as Chairman and CEO of the Company and is willing to do so upon the terms herein contained. 

        NOW,
THEREFORE, in consideration of the mutual covenants and conditions herein contained, the Parties agree as follows: 

        1.    Term as Chairman and CEO.    Effective from and after the Effective Date, Employee shall serve as the Company's
Chairman and CEO, and shall fulfill his duties and responsibilities in accordance with the
Bylaws of Company and Delaware law. Employee's term (the "Term") shall terminate as of the date Employee is terminated by the Company or resigns as an employee of Company. 

        2.    Compensation.    Employee shall be compensated as follows: 

        2.1    Fees.    Employee shall receive a salary of $280,000 per year (the "Fees") commencing immediately on the
closing of a minimum offering of at least $777,777 in a private placement of the Company's common stock. 

        2.2    Performance Bonus.    In addition to the Fees, for the Company's fiscal year ending December 31, 2004
and for each subsequent fiscal year under the Term, Employee shall be eligible to receive a bonus of up to one-half of Employee's salary based upon criteria to be determined by the
Compensation Committee of the Company's Board of Directors. 

        2.3    Benefits.    During the Term, Employee shall be entitled to four weeks of paid vacation per year, seven paid
holidays per year and three paid sick days per year. Additionally, Employee shall receive medical and other benefits provided to management-level employees of the Company pursuant to the terms of the
Company's benefit plan on the earlier to occur of (i) January 1, 2005 or (ii) the completion of an Initial Public Offering of the Company (the "Benefit Commencement Date"). In the
event the Company does not have a benefit plan in place for management-level employees on the Benefit Commencement Date, the Company will reimburse Employee for 75% of Employee's cost for reasonable
benefits until such time as a benefit plan is established. 

        3.    Reimbursement.    All business expenses reasonably incurred by Employee in promoting the business of the Company
including, but not limited to, expenditures for travel, lodging, entertainment, telephone, office expense and personnel, are to be reimbursed to Employee by the Company, in accordance with policies in
effect that apply to the officers of the Company.    In the case of meetings in person Employee shall be reimbursed for all travel and other direct expenses incurred to attend the
meetings, as approved from time to time by the majority of the board of directors. 

1

 

        3.1    Expense Account Book.    With respect to reimbursement of such expenses, Employee shall keep an account book in
which Employee shall record at or near the time that each expenditure is made, the following: 

        3.1.1    The
amount of the expenditure; 

        3.1.2    The
time and place of the expenditure; 

        3.1.3    The
business reason, if any, for the expenditure and the nature of the business benefit, if any, derived or expected to be derived as a result of the expenditure; and 

        3.1.4    The
names, occupations, addresses and other information concerning each person upon whom monies were expended, if applicable, sufficient to establish business
relationships to the Company. 

        3.2    Other Documentation and Reimbursement.    Additionally, Employee shall provide documentary evidence which
states sufficient information to establish the amount, date, place and essential character of the expenditure, for those expenditures exceeding $100, except for transportation charges, if not readily
available. The foregoing account book and documentation evidence shall be delivered to the Company on the last day of each month. The Company shall reimburse Employee for all such expenses within ten
days after receipt of the account book and documentary evidence. 

        4.    At Will Employment.    Employee is an "at will" employee and may be terminated by the Company for any reason or
no reason at all. Employee may quit at any time for any reason or no reason at all. 

        5.    Proprietary Information Restrictions.    During the term of this Agreement, Employee will have access to certain
"Proprietary Information" (defined below). Employee shall not during the term of his engagement, or at any time thereafter, disclose any such Proprietary Information, directly or indirectly, or use
such Proprietary Information in any way, except as required in the course of Employee's engagement with Company. All Proprietary Information, which Employee shall prepare, use, or come into contact
with, shall be and remain the sole property of Company. For purposes of this Agreement, "Proprietary Information" shall mean all information proprietary and confidential to Company and shall include,
but shall not be limited to, confidential records, customer lists, customer leads or lead sources, files, pricing information, marketing ads or strategies, equipment, quotation guides, outstanding
quotations, books, records, manuals, training materials, calling or business cards, correspondence, files, contracts, orders, messages, memoranda, notes, circulars, agreements, bulletins, invoices,
receipts, or any other confidential papers or information concerning Company, its customers or potential customers. Notwithstanding a termination of this Agreement or of Employee's engagement with
Company, the terms of this Section 5 shall survive the termination of this Agreement and Employee's engagement with Company and shall thereafter remain of full force and effect. 

        6.    Indemnification.    Company agrees to indemnify, defend and hold harmless Employee against any and all claims,
disputes or actions arising from out of or in connection with the business of Company. 

        7.    Miscellaneous.    

        7.1    Binding Effect.    This Agreement shall be binding upon all of the Parties and their executors, administrators,
representatives, permitted assigns and other successors. 

        7.2    Construction and Law.    This Agreement shall not be construed against the party preparing it, but shall be
construed as if both Parties prepared this Agreement and in accordance with the laws of the State of California. 

2

 

        7.3    Attorneys' Fees.    Should suit be brought to enforce or interpret any part of this Agreement, the "prevailing
party" shall be entitled to recover, as an element of costs of suit and not as damages, reasonable attorneys' fees to be fixed by the court, including all costs and expenses of any appellate court
proceedings. The "prevailing party" shall be the party entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgement. A party not entitled to recover its costs
shall not be entitled to recover attorneys' fees. No sum for attorneys' fees shall be counted in calculating the amount of a judgment for the purposes of determining if a party is entitled to recover
costs or attorneys' fees. 

        7.4    Duplicate Originals.    This Agreement may be fully executed in several duplicate originals and all such fully
executed duplicates shall constitute one and the same Agreement, binding on all of the parties hereof. 

        7.5    Captions, Gender and Number.    The title or paragraph headings of the various provisions of this Agreement are
intended solely for convenience of reference and shall not in any manner amplify, limit or modify or otherwise be used in the interpretation of any of said provisions. As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to include the other whenever the context so indicates or requires. 

        7.6    Severability.    If any provision of this Agreement as applied to either party or to any circumstance shall be
adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this
Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of the Agreement as a whole. 

        7.7    Further Assurances.    Each party agrees to timely perform any further acts and execute and deliver all
documents, including documents relating to government approvals, which may be reasonably necessary to carry out the provisions and purposes of this Agreement. 

        7.8    Notices.    Any written notice or communication shall be personally delivered, facsimiled, telexed or
electronically mailed or sent by overnight courier service or certified or registered mail, postage prepaid, return receipt requested, to the other party at the applicable address on file with the
Company or at such other address as any party shall designate in a written notice to the other parties given in accordance with the provisions of this paragraph. If served personally, service shall be
deemed conclusively to occur at the time of service. If served by telex, facsimile, electronic mail, or overnight courier service, service shall be deemed conclusively to occur on the earlier of
(i) actual delivery to the authorized address (but if delivered on a holiday or weekend, then on the following non-holiday weekday), or (ii) the next non-holiday
weekday that is twenty-four (24) hours after communication provided the transmission has been independently verified to have occurred or twenty-four (24) hours
after deposit with the courier service, if earlier. If served by certified mail, service shall be deemed conclusively to occur seventy-two (72) hours after the deposit thereof in
the United States mail, postage prepaid, addressed to the party to whom such notice or demand is to be given, as provided below. If served by international courier delivery service, service shall be
deemed conclusively to occur no later than the next non-holiday weekday that is ninety-six (96) hours after deposit with the international courier service. The parties
may change their addresses for the receipt of notices under this Agreement by notifying all parties of the new address in the same manner, within the same time periods and at the same addresses as set
forth above. Upon the giving of such notice of a party's new address, the new address shall prevail for all subsequent notices under this Agreement until later changed in the same manner. 

        7.9    Written Amendments.    No amendment or addition to, or modification of, any provision contained in this
Agreement shall be effective unless fully set forth in writing by all of the Parties hereto. 

3

 

        7.10    Entire Agreement.    This Agreement, together with its exhibits, constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and the final, complete and exclusive expression of the terms and conditions thereof. All prior agreements, representations, negotiations and
understandings of the parties hereto, oral or written, express or implied, are hereby superseded and merged herein. 

        7.11    Non-waiver.    Except as specifically provided otherwise herein, any waiver by any party of a
breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of any other provision of this Agreement, and the failure by either party to exercise
any right under this Agreement shall not be deemed to be a waiver of such right. 

        7.12    Authorization.    Each corporate signatory hereto hereby represents that it is a duly authorized officer or
agent of its representing corporation and has the authority to enter into this Agreement. 

        7.13    Counterparts.    This Agreement (or any telephonic facsimile thereof) may be executed in more than one
counterpart and all such counterparts when taken together shall constitute a complete Agreement, binding on all of the parties hereto. 

        7.14    Assignment.    Neither party may assign this Agreement without the prior written consent of the other. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. 

	COMPANY:	 	China Hospital, Inc.,

a Delaware corporation
	

 	
 	

/s/  FRANK HU      
 By: Frank Hu

Its: Chairman and CEO
	

EMPLOYEE:	
 	

/s/  FRANK HU      
 Frank Hu

4

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Exhibit 10.1

EMPLOYMENT AGREEMENTQuickLinks
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Exhibit 10.2    
    

 
 

EMPLOYMENT AGREEMENT    
    

        THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of December 28, 2002 ("Effective Date"), by and between China Hospitals, Inc.
("Company"), and Steve Yu, an individual ("Employee"). 

RECITALS 

        A.    The
Company desires to appoint Employee as its President and Secretary ("President and Secretary"), in order to retain Employee's experience, skills, abilities,
background and knowledge and is, therefore, willing to engage his services upon the terms herein contained. 

        B.    Employee
desires to accept the appointment as President and Secretary of the Company and is willing to do so upon the terms herein contained. 

        NOW,
THEREFORE, in consideration of the mutual covenants and conditions herein contained, the Parties agree as follows: 

        1.    Term as President.    Effective from and after the Effective Date, Employee shall serve as the Company's
President and Secretary, and shall fulfill his duties and responsibilities in accordance with the Bylaws of
Company and Delaware law. Employee's term (the "Term") shall terminate as of the date Employee is terminated by the Company or resigns as an employee of Company. 

        2.    Compensation.    Employee shall be compensated as follows: 

        2.1    Fees.    Employee shall receive a salary of $78,000 per year (the "Fees") commencing immediately on the closing
of a minimum offering of at least $777,777 in a private placement of the Company's common stock. 

        2.2    Performance Bonus.    In addition to the Fees, for the Company's fiscal year ending December 31, 2004
and for each subsequent fiscal year under the Term, Employee shall be eligible to receive a bonus of up to one-half of Employee's salary based upon criteria to be determined by the
Compensation Committee of the Company's Board of Directors. 

        2.3    Stock Options.    As additional compensation to Employee for entering into this Agreement the Company shall
grant to Employee an option (the "Stock Options") to purchase 50,000 shares of the Company's common stock at an exercise price of $3.50 per share. Twenty-five percent of the Stock Options
shall vest on August 18, 2004, with 25% vesting on August 18, 2005, 25% vesting on August 18, 2006 and the remaining 25% vesting as of August 18, 2007. On the date that
Employee is terminated or resigns, the Stock Options shall cease vesting and vested Stock Options shall expire 180 days following such date. 

        2.4    Benefits.    During the Term, Employee shall be entitled to four weeks of paid vacation per year, seven paid
holidays per year and three paid sick days per year. Additionally, Employee shall receive medical and other benefits provided to management-level employees of the Company pursuant to the terms of the
Company's benefit plan on the earlier to occur of (i) January 1, 2005 or (ii) the completion of an Initial Public Offering of the Company (the "Benefit Commencement Date"). In the
event the Company does not have a benefit plan in place for management-level employees on the Benefit Commencement Date, the Company will reimburse Employee for 75% of Employee's cost for reasonable
benefits until such time as a benefit plan is established. 

        3.    Reimbursement.    All business expenses reasonably incurred by Employee in promoting the business of the Company
including, but not limited to, expenditures for travel, lodging, entertainment, 

1

 

telephone,
office expense and personnel, are to be reimbursed to Employee by the Company, in accordance with policies in effect that apply to the officers of the Company.    In the case of
meetings in person Employee shall be reimbursed for all travel and other direct expenses incurred to attend the meetings, as approved from time to time by the majority of the board of directors. 

        3.1    Expense Account Book.    With respect to reimbursement of such expenses, Employee shall keep an account book in
which Employee shall record at or near the time that each expenditure is made, the following: 

        3.1.1    The
amount of the expenditure; 

        3.1.2    The
time and place of the expenditure; 

        3.1.3    The
business reason, if any, for the expenditure and the nature of the business benefit, if any, derived or expected to be derived as a result of the expenditure; and 

        3.1.4    The
names, occupations, addresses and other information concerning each person upon whom monies were expended, if applicable, sufficient to establish business
relationships to the Company. 

        3.2    Other Documentation and Reimbursement.    Additionally, Employee shall provide documentary evidence which
states sufficient information to establish the amount, date, place and essential character of the expenditure, for those expenditures exceeding $100, except for transportation charges, if not readily
available. The foregoing account book and documentation evidence shall be delivered to the Company on the last day of each month. The Company shall reimburse Employee for all such expenses within ten
days after receipt of the account book and documentary evidence. 

        4.    At Will Employment.    Employee is an "at will" employee and may be terminated by the Company for any reason or
no reason at all. Employee may quit at any time for any reason or no reason at all. 

        5.    Proprietary Information Restrictions.    During the term of this Agreement, Employee will have access to certain
"Proprietary Information" (defined below). Employee shall not during the term of his engagement, or at any time thereafter, disclose any such Proprietary Information, directly or indirectly, or use
such Proprietary Information in any way, except as required in the course of Employee's engagement with Company. All Proprietary Information, which Employee shall prepare, use, or come into contact
with, shall be and remain the sole property of Company. For purposes of this Agreement, "Proprietary Information" shall mean all information proprietary and confidential to Company and shall include,
but shall not be limited to, confidential records, customer lists, customer leads or lead sources, files, pricing information, marketing ads or strategies, equipment, quotation guides, outstanding
quotations, books, records, manuals, training materials, calling or business cards, correspondence, files, contracts, orders, messages, memoranda, notes, circulars, agreements, bulletins, invoices,
receipts, or any other confidential papers or information concerning Company, its customers or potential customers. Notwithstanding a termination of this Agreement or of Employee's engagement with
Company, the terms of this Section 5 shall survive the termination of this Agreement and Employee's engagement with Company and shall thereafter remain of full force and effect. 

        6.    Indemnification.    Company agrees to indemnify, defend and hold harmless Employee against any and all claims,
disputes or actions arising from out of or in connection with the business of Company. 

        7.    Miscellaneous.    

        7.1    Binding Effect.    This Agreement shall be binding upon all of the Parties and their executors, administrators,
representatives, permitted assigns and other successors. 

2

 

        7.2    Construction and Law.    This Agreement shall not be construed against the party preparing it, but shall be
construed as if both Parties prepared this Agreement and in accordance with the laws of the State of California. 

        7.3    Attorneys' Fees.    Should suit be brought to enforce or interpret any part of this Agreement, the "prevailing
party" shall be entitled to recover, as an element of costs of suit and not as damages, reasonable attorneys' fees to be fixed by the court, including all costs and expenses of any appellate court
proceedings. The "prevailing party" shall be the party entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgement. A party not entitled to recover its costs
shall not be entitled to recover attorneys' fees. No sum for attorneys' fees shall be counted in calculating the amount of a judgment for the purposes of determining if a party is entitled to recover
costs or attorneys' fees. 

        7.4    Duplicate Originals.    This Agreement may be fully executed in several duplicate originals and all such fully
executed duplicates shall constitute one and the same Agreement, binding on all of the parties hereof. 

        7.5    Captions, Gender and Number.    The title or paragraph headings of the various provisions of this Agreement are
intended solely for convenience of reference and shall not in any manner amplify, limit or modify or otherwise be used in the interpretation of any of said provisions. As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to include the other whenever the context so indicates or requires. 

        7.6    Severability.    If any provision of this Agreement as applied to either party or to any circumstance shall be
adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this
Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of the Agreement as a whole. 

        7.7    Further Assurances.    Each party agrees to timely perform any further acts and execute and deliver all
documents, including documents relating to government approvals, which may be reasonably necessary to carry out the provisions and purposes of this Agreement. 

        7.8    Notices.    Any written notice or communication shall be personally delivered, facsimiled, telexed or
electronically mailed or sent by overnight courier service or certified or registered mail, postage prepaid, return receipt requested, to the other party at the applicable address on file with the
Company or at such other address as any party shall designate in a written notice to the other parties given in accordance with the provisions of this paragraph. If served personally, service shall be
deemed conclusively to occur at the time of service. If served by telex, facsimile, electronic mail, or overnight courier service, service shall be deemed conclusively to occur on the earlier of
(i) actual delivery to the authorized address (but if delivered on a holiday or weekend, then on the following non-holiday weekday), or (ii) the next non-holiday
weekday that is twenty-four (24) hours after communication provided the transmission has been independently verified to have occurred or twenty-four (24) hours
after deposit with the courier service, if earlier. If served by certified mail, service shall be deemed conclusively to occur seventy-two (72) hours after the deposit thereof in
the United States mail, postage prepaid, addressed to the party to whom such notice or demand is to be given, as provided below. If served by international courier delivery service, service shall be
deemed conclusively to occur no later than the next non-holiday weekday that is ninety-six (96) hours after deposit with the international courier service. The parties
may change their addresses for the receipt of notices under this Agreement by notifying all parties of the new address in the same manner, within the same time periods and at the same addresses as set
forth above. Upon the giving of such notice of a party's new address, the new address shall prevail for all subsequent notices under this Agreement until later changed in the same manner. 

3

 

        7.9    Written Amendments.    No amendment or addition to, or modification of, any provision contained in this
Agreement shall be effective unless fully set forth in writing by all of the Parties hereto. 

        7.10    Entire Agreement.    This Agreement, together with its exhibits, constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and the final, complete and exclusive expression of the terms and conditions thereof. All prior agreements, representations, negotiations and
understandings of the parties hereto, oral or written, express or implied, are hereby superseded and merged herein. 

        7.11    Non-waiver.    Except as specifically provided otherwise herein, any waiver by any party of a
breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of any other provision of this Agreement, and the failure by either party to exercise
any right under this Agreement shall not be deemed to be a waiver of such right. 

        7.12    Authorization.    Each corporate signatory hereto hereby represents that it is a duly authorized officer or
agent of its representing corporation and has the authority to enter into this Agreement. 

        7.13    Counterparts.    This Agreement (or any telephonic facsimile thereof) may be executed in more than one
counterpart and all such counterparts when taken together shall constitute a complete Agreement, binding on all of the parties hereto. 

        7.14    Assignment.    Neither party may assign this Agreement without the prior written consent of the other. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. 

	        COMPANY:	 	China Hospital, Inc.,

a Delaware corporation
	

 	
 	

/s/ Frank Hu
 Its: Chairman and CEO
	

        EMPLOYEE:	
 	

/s/ Steve Yu
 Steve Yu

4

  

 
 

AMENDMENT TO EMPLOYMENT AGREEMENT    
    

        This Amendment to Employment Agreement ("Amendment") is dated effective as of December 22, 2004
("Effective Date"), by and between China Hospitals, Inc., a Cayman Island corporation ("Company"), and
Steve Yu, an individual ("Employee"), as an amendment to the Employment Agreement effective December 28, 2002, by and between the Company and
Employee ("Agreement"). 

        Now,
therefore, in consideration of the mutual covenants and conditions herin contained, the Parties agree as follow: 

        1.     Defined Terms. Capitalized terms not defined herein shall have the meaning given them in the Agreement. 

        2.     Recitals of the Agreement. Effective from and after the Effective Date, the recitals in the Agreement are hereby deleted
and replaced in their entirety with the following: 

A.    Whereas,
as of the Effective Date, the Company desires to appoint Employee as its Vice President and Secretary ("Vice President and
Secretary"), in order to retain Employee's experience, skills, abilities, background and knowledge and is, therefore, willing to engage his services upon the terms herein
contained. 

B.    Whereas,
the Employee desires to accept the appointment of Vice President and Secretary of the Company and is willing to do so upon the terms herein contained. 

        3.     Section
1 of the Agreement. Effective from and after the Effective Date, Section 1 of the Agreement is hereby deleted and replaced in its entirety with the following: 

Term as Vice President and Secretary. Effective from and after the Effective Date, Employee shall serve as the Company's Vice President and Secretary,
and shall fulfill his duties and responsibilities in
accordance with the Bylaws of Company and applicable laws. Employee's term shall commence December 22, 2004, and ending December 27, 2006 (the "Intial
Term"), unless this Agreement is earlier terminated as proviced herein. 

        4.     Ratification.
Except as modified by this Agreement, the Agreement is hereby ratified and in full force and effect. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. 

	COMPANY:	 	EMPLOYEE:
	

China Hospital, Inc.,

a Cayman Island corporation	
 	

 
	

/s/  FRANK HU      
 By:    Frank Hu

Its:    Chairman and CEO	
 	

/s/  STEVE YU      
 Steve Yu

1

QuickLinks

Exhibit 10.2

EMPLOYMENT AGREEMENT

AMENDMENT TO EMPLOYMENT AGREEMENT

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