Sample Business Contracts

Binding Letter of Intent - Cheung Laboratories Inc. and Ardex Equipment LLC

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                              ARDEX EQUIPMENT, LLC

                                                               August 2, 1996
Dr. Augustine Y. Cheung, President
Cheung Laboratories, Inc.
10220 Old Columbia Road, Suite I
Columbia, MD  21046-1705

RE:      Binding Letter of Intent
         Rescission  of Cheung Laboratories, Inc. Investment In Ardex Equipment,

Dear Dr. Cheung:

This letter will serve to set forth the background  and confirm our  discussions
to proceed in the following  manner to rescind the  transaction  in which Cheung
Laboratories,  Inc. ("CLI") invested $450,000 in Ardex Equipment,  LLC ("Ardex")
stock ($400,000  purchased from Ardex and $50,000 from the principals of Ardex),
$50,000 of which has been repaid from Ardex and $400,000 of which  remains as an
investment in Ardex in the form of 17.1111% of the present equity of Ardex.

1.       CLI  contracted to acquire  a controlling interest in Ardex and provide
         substantial funding  to  Ardex as part of  implementing a business plan
         for  CLI's  Industrial  Division,  which  business   plan   involved  a
         significant  investment  in  CLI by Mr. Gao Yu Wen.  Mr. Gao has become
         seriously ill, the  Industrial Division  is being  closed  and  CLI has
         entered into an agreement to redeem Mr. Gao's investment in CLI.

2.       CLI desires to rescind the remaining  $350,000  transaction  with Ardex
         and the $50,000  transaction with the principals as part of its general
         restructuring  pertaining  to  closing  its  Industrial  Division.  CLI
         desires to cancel its contract to acquire a controlling interest in and
         provide  substantial  funding to Ardex and be repaid its  investment in
         Ardex, all without prejudice to the business or opportunities of Ardex.

319383.001(B&F)                                    2


3.       $350,000 of the equity  interest of CLI  will be converted  to a 5-year
         negotiable promissory  note payable  by Ardex under the following terms
         and conditions:

         a.       Interest to be paid at the rate of 8%.
         b.       The note is payable on an  interest-only basis until principal
                    becomes due.
         c.       Principal  becomes due  and payable upon the first to occur of
                    any of the following:
                  (i)      Public or private offerings successfully completed by
                             Ardex of $1.5 million in the aggregate or more;
                  (ii)     Ninety  (90)  days  following a  year end of Ardex in
                             which sales for  the year  have been  $3,000,000 or
                  (iii)    Ardex  having a cash balance of $800,000 or more from
                           operations; or
                  (iv)     A date 5 years from the date of the promissory note.
         d.       The promissory note to be the subject of a limited guaranty by
                  the three principals of Ardex in which each principal provides
                  a limited guaranty of  one-third of the  principal  balance of
                  the note,  the  limited guaranty  to be secured  solely by the
                  interest  each  principal  has  in Ardex and the interest each
                  principal has in options to purchase CLI stock.
         e.       The principals will provide promissory notes of $50,000 in the
                  aggregate  on the  same  terms  and  conditions  as the  Ardex
                  promissory   notes,   $22,500   payable   by   Joseph   Colino
                  (representing   the  interest  of  Joseph  Colino  and  Daniel
                  Alfieri), $12,500 payable by John Kohlman, and $15,000 payable
                  by Charles Shelton.
4.       This  transaction  is to be implemented on or before August 31, 1996 by
         the  execution  of detailed  documents  containing  standard  terms and
         conditions and  appropriate  detailed terms and conditions to implement
         this binding letter of intent.
                                             Very truly yours,

                                                Joseph M. Colino
cc:      Charles C. Shelton
         John J. Kohlman

The above terms and conditions are agreed this 2nd day of August, 1996.
By:      /s/ ______________________________
         Dr. Augustine Y. Cheung, President

319383.001(B&F)                                    3