Unassociated Document

Cooperation Establishment of “Tangdu

Gamma Knife Therapeutic Center”

Agreement

Tangdu Hospital Affiliated to Fourth Military Medical University

Masep Medical Science & Technology Development (Shenzhen) Co., Ltd.

Cooperation Establishment of

“Tangdu Gamma Knife Therapeutic Center”

Agreement

Chapter I General Provisions

Article 1 In accordance with the relevant laws & regulations of the People’s Republic of China and the principle of the equality and mutual-benefits, Tangdu Hospital Affiliated to the Fourth Military Medical University and Masep Medical Science & Technology Development (Shenzhen) Co., Ltd. agree to cooperatively establish “Tangdu Gamma Knife Therapeutic Center” in Xi’an Tangdu Hospital via friendly negotiation. The corresponding agreement is signed as follows:

Article 2 Brief Introduction to Project

The gamma ray 3-dimension orientation therapeutic system, integrating 3-dimension-orientation technology and radiation surgical technology, is 3-dimension orientation radiation surgical therapeutic equipment mainly for treating cerebral disease (including various tumors in brain, the cerebrovascular abnormality and functional disease, etc.). It make a planned mass of gamma rays centrally focus on the pre-chosen target place in the body with gamma ray geometrical focusing type through precise 3-dimension orientation, which can thoroughly and fatally destroy the tissues in the target place so as to achieve the surgical operation removal or destroy therapeutic effect. Since this therapeutic system adopts gamma ray instead of scalpel, its irradiation scope has very obvious demarcation with the normal tissues during treatment and the edge is as uniform as cutting with scalpel. It is called the “gamma knife”. The gamma ray 3-dimension-orientation therapeutic system is the most advanced radiation therapeutic equipment in the world at present; it is also called the non-wound medical pioneering equipment with broad clinical application prospect.

In order to keep the pace with medical technology development and meet the challenge of medical market reform and competition, many of domestic hospitals have introduced the gamma knife therapeutic system respectively. As the gradual maturation of medical diagnosis therapeutic technology development and application both at home and abroad, with the encouraging policies of China’s western region development and boasting western region economy, Masep Medical Science & Technology Development (Shenzhen) Co., Ltd. plans to cooperate with Tangdu Hospital Affiliated to the Fourth Military Medical University and invest for “the gamma knife aiming at brain & body part” and establish “Tangdu Gamma Knife Therapeutic Center” via the mutual friendly negotiation and understanding with the Fourth Military Medical University in Xi’an City after investigating and knowing the medical sanitation facilities in five provinces in Northwest China and Shaanxi Province. With the regional advantage of Xi’an city and the long history, advanced & powerful technology strength, the academic status and outstanding medical role of Tangdu Hospital Affiliated to the Fourth Military Medical University in Northwest China and even the whole country, The center will stand in Xi’an and radiate 5 provinces in Northwest China to boost and improve the integral medical clinical diagnosis therapeutic level, speed up military and northwestern regional medical technology development, serve for the good health of soldiery & civilian and exert more economic & social benefit.

Chapter II Both Cooperative Parties

Article 3 Both contracted parties, signing place and performance area:

Party A: Tangdu Hospital Affiliated to the Fourth Military Medical University. Legal address: Xinsi Road, Baqiao District, Xi’an City. Legal person representative: Liu Zhenli, Post: President. Post Code: 710038, Fax: 86-29-3577477, Tel: 86-29-3577001.

Party B: Masep Medical Science & Technology Development (Shenzhen) Co., Ltd. Legal address: Room 909, New Century Hotel, North Huaqiang Road, Shenzhen City. Legal person representative: Hui Xiaobing Post: Board chairman. Post Code: 518028, Fax: 86-(0755)3237273, Tel: 86-(0755)3231352

Signing place of the agreement: Xi’an

Actual performance place of the agreement: Xi’an

Chapter III

Article 4 Both parties shall cooperatively establish “Tangdu Gamma Knife Therapeutic Center” in Tangdu Hospital in accordance with the relevant laws & regulations of the People’s Republic of China.

Article 5 Name of the center is “Tangdu Gamma Knife Therapeutic Center” (hereinafter referred to as the Center), the legal address of the Center is in Tangdu Hospital, Baqiao District, Xi’an City.

Article 6 The Center is an organization affiliated to Tangdu Hospital, and shall be responsible for accounting and the corresponding liability independently.

Article 7 All the activities launched in the Center must comply with the laws & regulations of the People’s Republic of China, and all the therapeutic activities must observe the medical treatment rules & regulations confirmed by both parties.

Article 8 The Center will conduct the independent accounting and open the independent accounts, accept the supervision and administration of the local competent organization. Party B shall assign the chief financial accountant and Party A shall assign the cashier.

Article 9 The operation cost of the Center should include the necessary cost expenditure such as paying a part to the general logistics department (2% of the gross income), maintenance cost in the Center (building and equipment maintenance), salary for employee, bonus, electricity and water expense, gas & heating fee, public relationship expense, advertisement fee, communication, office expense and relevant premium, etc.

If other expense is needed to pay by the Center, the detailed item should be decided by the Center administration commission.

Article 10 Financial settlement in the Center should be carried out once per month deducting the Center operation cost. The benefit made in Center should be shared according to the distribution proportion stipulated in the agreement of both parties.

Chapter IV Cooperation Purpose, Type and Distribution Scheme

Article 11 Cooperation purpose: For realizing the will to accelerate radiation therapeutic technology advancement in northwestern region of China, introducing the modern advanced gamma ray 3-dimension orientation therapeutic system (hereinafter referred to as the Gamma Knife) at home and abroad and adopting the advanced management methodology for scientific operation, the Center can become a leading modernization medical treatment organization and obtain the better social & economic benefit.

Article 12 Cooperation type: Party A shall supply the building, operation facilities and medical technical personnel complying with the construction of Gamma Knife Center. Party B shall offer the fund to purchase the Gamma Knife therapeutic system and the auxiliary equipments.

Article 13 Cooperation period: The total cooperation period is 16 years, and it is calculated from the day when starting formal operation of the Center.

Article 14 Distribution proportion: Sixteen-year cooperation period can be divided into 5 distribution periods, and the settlement can be done once a year.

The first period (2-year): The distribution proportion for Party A and Party B shall be 10% and 90% respectively.

The second period (5-year): The distribution proportion for Party A and Party B shall be 20% and 80% respectively.

The third period (3-year): The distribution proportion for Party A and Party B shall be 20% and 70% respectively.

The fourth period (3-year): The distribution proportion for Party A and Party B shall be 40% and 60% respectively.

The fifth period (3-year): The distribution proportion for Party A and Party B shall be 50% and 50% respectively.

Note: If the state policies have impact to the Center during cooperation period, the charge standard for hospital equipment will decline and the decline scope is less than 15%, the cooperation period shall not be changed. If the adjusting scope is over 15%, the total cooperation period shall be extended and the detailed items can be negotiated and comfirmed by both parties.

Chapter V

Article 15 Responsibilities for both parties

(1) Responsibilities for Party A:

1. Deal with the procedures of applying for establishing the Gamma Knife center cooperation medical treatment organization timely from the day when the contract is formally signed.

2. Apply for obtaining the “Application License of Large-size Medical Treatment Equipment”.

3. Supply the Center operation building based on the stipulated time and the place should be restrained in the legal address scope of Party A.

4. Cooperate with Party B to investigate & study, confirm and handle the relevant procedures for purchasing the Gamma Knife equipment and its approval, etc.

5. Cooperate with Party B to discuss and confirm the construction site and building reconstruction scheme of the Center.

6. Carry out the infrastructures such as water, electricity, communication and office facilities, etc.

7. Be responsible for recommending the required medical, technical and nursing personnel working in the Center.

8. Be responsible for coordinating the relationship between the Center and all the departments & sections of university and hospital.

9. Be responsible for handling other corresponding items.

(2) Responsibility for Party B:

1. Review and investigate, confirm and handle relevant procedures for purchasing the Gamma Knife equipment together with Party A.

2. Ensure that all the equipments of Gamma Knife system confirmed by both parities can be reached, installed and commissioned so as to ensure their normal operation and usage according to the time table confirmed by both from the day when formally signing the agreement.

3. Cooperate with Party A to investigate and confirm the organization configuration and building reconstruction scheme.

4. Cooperate with Party A to research and manage the relevant matters such as operation and public relationship, etc. of the Gamma Knife Center.

5. Be responsible for handling other corresponding matters.

(3) The period in which both parties perform the respective obligation shall not exceed December 31, 2001.

(4) Both parties should prepare the written confirmation letter for the respective obligation performed.

Chapter VI Organization Form

Article 16 “Tangdu Gamma Knife Therapeutic Center” cooperatively established by both parties shall be under the radiation therapeutic department of Tangdu Hospital to inside and the independent unit to outside. Both parties shall jointly set up the administration commission, and appoint 1 director and 1 deputy director in the administration commission. The director should be appointed by Party B while the deputy director should be appointed by Party A. The term of the director and deputy director is 4 years and they can be consecutive in office after recommendation of appointing party.

Article 17 The administration commission established by both parties shall be the supreme authority of the Center that can decide all the significant matters in the Center. The Center shall not have right to sign property right transfer, impawn, pledge, warrant and other contracts to undertake the relevant legal liability.

Both parties should negotiate to make the decision for the following key items, otherwise the liability party should undertake the responsibility independently.

1. Working out and modification of the regulations in the Center;

2. Termination and cancellation of the Center;

3. Serious financial problems in the Center;

4. The key human resource arrangement in the Center;

5. Other significant matters in the Center.

Article 18 If the director fails to implement his authority for some reasons, the deputy director should exert the authority. If the deputy director fails to implement his authority for some reasons, other principal appointed by the Center should exert the authority.

Article 19 The administration commission shall hold six meetings annually and once every two-month normally. The meeting should be cooperatively presided by the director and deputy director of both parties. Administration commission can hold the temporary meeting for emergence and important matters. Special record should be made in each meeting, which shall come into force with attending person’s signature and be kept in filing.

Chapter VII Administration Organization

Article 20 The Center shall establish the office affiliated to the administration commission, which should be responsible for the daily affairs in the Center. One director and one deputy director should be arranged in the administrative office. The director should be recommended by Party A and the deputy director should be assigned by Party B. The term of director and the deputy director is 4 years and they can be consecutive in office after employment of the administration commission. The medical, technical and nursing personnel in the Center should be examined and employed by the Center Administrative Office.

Article 21 Responsibility of the office director are to exert various resolutions made by the administration commission, plan and arrange the daily management work of the Center. The deputy director should help the director in work.

Article 22 If the director or deputy director is abuse of the power and the serious dereliction of duty, the medical, technical and nursing personnel can’t be competent for the assignment work; the administration commission can dismiss them at any time and their corresponding responsibility can be investigated by law.

Chapter VIII Labor Management

Article 23 The employment and dismission of the medical, technical and nursing personnel in the Center should be based on the allocation of Party A. Salaries labor insurance, labor protection, life welfare and rewards & punishment system, etc. For the medical, technical and nursing personnel in the Center shall be handled in accordance with the regulations of military and relevant labor management in Xi’an City, or the administration commission can discuss and work out the scheme with which the Center signs the labor contract with employees to formulate the detailed items. The Party, political, labor union and youth member relationship of the personnel employed by the Center should be uniformly managed in hospital.

Article 24 Employment, salary treatment, social insurance, welfare and travel expense standard, etc. of the working personnel in the Center should be decided by the administration commission.

Chapter IX Financial Management

Article 25 The Center shall conduct the business independently and be responsible for its own profits and losses. Party B should assign one financial supervisor and Party A should assign one cashier to control the finance in the Center. Calculate the cost monthly, the profit after deducting the cost should be distributed based on the contracted proportion of both parties.

Article 26 The Center should draw employee’ welfare and rewarding fund in accordance with the stipulations of the relevant laws and regulations issued by the Ministry of Health of the People’s Republic of China, the General Logistics Department and Xi’an Municipal People’s Government. Annual drawing proportion should be decided based on the actual income and expenditure in the Center by the administration commission.

Chapter X Property Right Ownership

Article 27 The ownership of the land and gamma knife room in the Center should belong to Party A. The ownership of the gamma knife and its auxiliary equipments in the Center during cooperation period (including advance termination and cancellation period of the contract) should belong to Party B. After expiration of cooperation, the equipment should be depreciated in accordance with depreciation term and proportion on large-size medical equipment stipulated in the “Management Regulation for Medical Equipment in the Military Hospital”. If there is residual value, the residual value should belong to both parties. Party A should have the priority of the transferee right, and purchase the equipment based on 50% of the residual value from Party B.

The ownership for purchasing the equipment after establishment of the Center should belong to the Center. The disposal principle after expiration should be the same as that in above article.

Chapter XI Insurance

Article 28 Various insurances in the Center should be insured in the insurance company. The insurance type, insurance value and insurance period, etc. should be decided by the Center administration commission according to the regulations in insurance company. If the insured value incurs, each partys should get 50% of it according to the distribution principle.

Chapter XII Modification, Alternation and Cancellation of Contract

Article 29 Any alternation or cancellation for the agreement and its appendix shall not become effective till both parties’ negotiation and the written agreement signed.

Article 30 If the agreement can’t be executed because of the force majeure, in this case, the agreement can be terminated in advance via both parties’ negotiation and confirmation.

Chapter XIII Special Stipulations for Breach Liability

Article 31 If either party fails to perform the obligations regulated in the agreement or breach of the regulations; the Center can’t operate or can’t reach the operation purpose stipulated in the agreement, which should be deemed to be breach. The party that breaks the regulations should pay RMB three million as penalty to the other party and the other party can terminate the agreement unconditionally. During claiming the penalty, the other party can ask the breach party to continually perform its obligation until the completion of the contract.

Chapter XIV Force Majeure

Article 32 Because of the force majeure such as earthquake, flood, fire, war or other incident that can’t be foreseen and its results can’t be prevented or avoided, one party should inform the accident to its counterparty timely via fax, and supply the detailed accidents, the effective certifying documents to explain the failure performance of the contract, or the reason for deferring within 15 days since the accident happens, the certifying documents should be issued by the notarization office where the accident happens. Both parties should decide whether to cancel the agreement or partially exempt the liability for performing the agreement or defer to perform the agreement or based on the impact degree for performance of the agreement because of the accident.

Chapter XV Applicable Law

Article 33 Formulation, effective force, interpretation, performance and interpretation for the disputes of the agreement should be protected and ruled by the laws of the People’s Republic of China.

Chapter XVI Disputes and Settlement

Article 34 All the disputes caused because of performance of the agreement or relating with the agreement, which should be solved via both parties’ friendly negotiation. If it fails to solve, the disputes should be submitted to the arbitration organization or the people’s court signed in the agreement for arbitration and solving.

Article 35 During arbitration or litigation, the agreement should be continually performed except the articles that are being arbitrated or litigated by both parties.

Chapter XVII Legal Effect and Other Items of Agreement

Article 36 The agreement and its appendix shall go into legal effect after signing them by the legal representative or authorized representative of both parities.

Article 37 Either party should timely inform its counterparty with written form on right and responsibility involved. The legal address listed in the agreement should be the mail address of each party.

Article 38 The replacement for the legal person representatives of both parties should not influence the normal performance of the agreement.

Article 39 Other items not covered in the contract should be friendly negotiated by both parties.

Article 40 The agreement is made in quadruplicating, each party shall take two copies of original, which will have the equal legal effect.

Party A (common seal):	Legal representative (signature):


Party B (common seal):	Legal representative (signature):


	Signed date: May 18, 2001

Cooperation Establishment of

“Tangdu PET Diagnosis Center” and

“Tangdu Y Knife Therapeutic Center”

Supplementary Agreement

Tangdu Hospital Affiliated to the Fourth Military Medical University

Masep Medical Science & Technology Development (Shenzhen) Co., Ltd.

Cooperation Establishment of “Tangdu PET Diagnosis

Center” and “Tangdu Y Knife Therapeutic Center”

Supplementary Agreement

Based on the principal agreement of “Tangdu PET Diagnosis Center” and “Tangdu Y Knife Therapeutic Center” and in order to ensure the successful performance of the cooperation agreement, and comply with the principles of friendly negotiation, mutual benefit and sharing the risk together, Tangdu Hospital Affiliated to the Fourth Military Medical University (Party A) and Masep Medical Science & Technology Development (Shenzhen) Co., Ltd. (Party B) confirm and sign the supplementary agreement as follows.

I. Total Amount of Investment: The assets invested because of the performance of the contract that is written confirmed by both parties shall be predominated.

Masep Company: ① PET; ② Cyclotron; ③ PET auxiliary equipments; ④ Y knife on brain part; ⑤ Y knife on body part.

Tangdu Hospital: ① Location; ② Equipment room (including civil engineering construction and inner decoration); ③ Professional technical personnel; ④ The brand of Tangdu Hospital Affiliated to the Fourth Military Medical University.

II. Warranty, Maintenance and After-sales Service

1. The warranty, maintenance and after-sales service for PET, cyclotron and the auxiliary equipments are seen in the appendix supplied by Adytech Company.

2. The warranty, maintenance and after-sales service for Y knife on brain part are seen in the appendix supplied by Masep Company.

3. The warranty, maintenance and after-sales service for Y knife on body part are seen in the appendix supplied by AOWO Company.

III. Training for Technical Personnel

1. Training for technical operator of PET and cyclotron shall be carried out according to the Appendix 3 supplied by Adytech Company.

2. Training for technical operator of Y knife on brain and body part shall be carried out according to the appendix supplied by Masep Company (including training number, time and place).

IV. Preparation Time of the Center Building Location

1. Time of supplying the building location for Y knife on brain and body part should not be later than October 1, 2001.

2. Time of supplying the building location for PET and cyclotron should not be later than February 1, 2002.

V. Formal Operation Time for the Center

1. Formal operation time for Y knife on brain part won’t be later than December 31, 2001.

2. Formal operation time for Y knife on body part shouldn’t be later than December 31, 2001.

3. Formal operation time for PET and cyclotron shouldn’t be later than July 1, 2002.

VI. If Party B plans to get a loan via equipment mortgage type in the location where the Center is situated, Party A shall give a help on loan. If Party B fails to repay the loan interest to the financial unit, Party B should undertake the responsibility for breach and compensate the loss.

VII. During paying the earnest money for the cyclotron, Party B should arrange the payment for the auxiliary equipments of PET and cyclotron (seen Appendix 2-l supplied by Adytech Company. List for Radio & Chemical Therapy Lab and Radio Protection Equipment in the PEC Center), the total amount is USD 200000. Taking the actual capital payment capacity of Party B carefully, Party A shall agree to help Party B advancing 50% of the total payment, namely USD 100000, the balance of USD 100000 shall be paid by Party B. Both parties agree that Party B shall firstly repay USD 10000 (which Party A helps to pay for the equipment) to Party A from the distributed profit after formal operation and getting the profit in PET Center.

VIII. Ownership of Equipments in Two Centers: Separate shared ownership for both parties during cooperation period can be seen in the principal agreement. The property right residual value of all the equipments in two centers after agreement expiration will be depreciated based on 15 years; Party A shall have the priority to purchase the equipments of the residual value part with 50% of the lowest price from Party B.

IX. Approved Documents for Production and Marketing of Radioactive Medicine: Party A and Party B shall comply with the national relevant laws & regulations for production & marketing the radioactive medicine to apply for “Operation License Registration Certificate for Radioactive Medicine” and “Authorization Certificate for Radioactive Medicine Preparation” carefully and actively. The cost for applying the license shall be listed for cost accounting in the Center.

X. Performance of the National and Military Profit & Tax Policy: During operation of the “two centers”, if the national or military policies are adjusted, the “Center” should abide by the national and military policy & regulations to pay for the income tax and the “tax” should be listed for cost accounting in the Center.

XI. The supplementary agreement is made in quadruplicating, each party shall take two copies of the original, which will have the equal legal effect with “Agreement for Cooperation Establishment of Tangdu PET Diagnosis Center” and “Agreement for Cooperation Establishment of Tangdu Gamma Knife Therapeutic Center”. The breach responsibility should be carried out referring to the principal agreement.

XII. The agreement shall become legal effective from the day when formally putting the signature of the legal representatives or authorized representatives of both parties.

Party A (common seal):	Legal representative (signature):


Party B (common seal):	Legal representative (signature):


	Signed date: May 18, 2001