Cayman Islands | 8011 | Not Applicable | ||
(State or other jurisdiction
of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Leiming Chen | Portia Ku | |
Simpson Thacher & Bartlett LLP | OMelveny & Myers LLP | |
35th Floor, ICBC Tower | 37/F Plaza 66, 1266 Nanjing Road W | |
3 Garden Road | Shanghai, Peoples Republic of China | |
Central, Hong Kong | (86 10) 2307-7000 | |
(852) 2514-7600 |
Title of Each Class of
|
Proposed Maximum Aggregate
|
Amount of
|
||||
Securities to be Registered | Offering Price (1) | registration fee | ||||
Ordinary shares, par value US$0.0001 per
share
(2)(3)
|
US$100,000,000 | US$5,580 | ||||
(1) | Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933. | |
(2) | Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes ordinary shares that may be purchased by the underwriters pursuant to an over-allotment option. These ordinary shares are not being registered for the purposes of sales outside of the United States. | |
(3) | American depositary shares issuable upon deposit of the ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333- ). Each American depositary share represents ordinary shares. |
The
information in this prospectus is not complete and may be
changed. Neither we nor the selling shareholders may sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and we are not
soliciting offers to buy these securities in any state where the
offer or sale is not permitted.
|
Underwriting
|
||||||||||||||||
Discounts
|
Proceeds to
|
|||||||||||||||
Price to
|
and
|
Proceeds to
|
Selling
|
|||||||||||||
Public | Commissions | Company | Shareholders | |||||||||||||
Per ADS
|
US $ | US $ | US $ | US $ | ||||||||||||
Total
|
US $ | US $ | US $ | US $ |
MORGAN STANLEY | J.P.MORGAN | CICC |
Cms O J centers in .30 cities* Concord Medical operates the largest network of radiotherapy and diagnostic imaging centers in China** 1 As ot September 30,2009. In terms of revenues and the total number of centers in operation in 2008, according to a Frost & Sullivan report commissioned by Concord Medical. |
1 | ||||||||
18 | ||||||||
45 | ||||||||
46 | ||||||||
47 | ||||||||
48 | ||||||||
49 | ||||||||
51 | ||||||||
52 | ||||||||
54 | ||||||||
56 | ||||||||
60 | ||||||||
93 | ||||||||
97 | ||||||||
113 | ||||||||
122 | ||||||||
128 | ||||||||
131 | ||||||||
133 | ||||||||
143 | ||||||||
152 | ||||||||
154 | ||||||||
160 | ||||||||
166 | ||||||||
167 | ||||||||
167 | ||||||||
168 | ||||||||
F-1 | ||||||||
F-74 | ||||||||
P-1 | ||||||||
EX-3.1 | ||||||||
EX-3.2 | ||||||||
EX-4.2 | ||||||||
EX-4.4 | ||||||||
EX-4.5 | ||||||||
EX-4.6 | ||||||||
EX-4.7 | ||||||||
EX-4.8 | ||||||||
EX-4.9 | ||||||||
EX-4.10 | ||||||||
EX-4.11 | ||||||||
EX-4.12 | ||||||||
EX-4.13 | ||||||||
EX-4.14 | ||||||||
EX-4.15 | ||||||||
EX-4.16 | ||||||||
EX-4.17 | ||||||||
EX-8.2 | ||||||||
EX-10.1 | ||||||||
EX-10.3 | ||||||||
EX-10.4 | ||||||||
EX-10.5 | ||||||||
EX-10.6 | ||||||||
EX-10.7 | ||||||||
EX-10.8 | ||||||||
EX-10.9 | ||||||||
EX-10.10 | ||||||||
EX-10.11 | ||||||||
EX-10.12 | ||||||||
EX-10.13 | ||||||||
EX-10.14 | ||||||||
EX-10.15 | ||||||||
EX-10.16 | ||||||||
EX-10.17 | ||||||||
EX-10.18 | ||||||||
EX-10.19 | ||||||||
EX-21.1 | ||||||||
EX-23.1 | ||||||||
EX-23.4 | ||||||||
EX-23.5 |
i
1
Table of Contents
leading market position and successful track record;
doctors with extensive cancer treatment experience developed and
supported by our network;
market-oriented management of centers;
successful track record of new center development and
acquisitions; and
strong and experienced management team.
continue to develop new radiotherapy and diagnostic imaging
centers;
increase marketing efforts to drive growth in patient cases at
our existing centers;
establish specialty cancer hospitals;
introduce advanced cancer treatment options and diagnostic
technology in our network; and
complement our development of new centers with selected
acquisitions.
2
Table of Contents
we may encounter difficulties in successfully opening new
centers or renewing agreements for existing centers due to the
limited number of suitable hospital partners and their potential
ability to finance the purchase of medical equipment directly;
we have historically derived a significant portion of our
revenues from centers located at a limited number of our
hospital partners and regions;
we conduct our business in a heavily regulated industry;
any failure by our hospital partners to make contracted payments
to us or any disputes over, or significant delays in receiving,
such payments could have a material adverse effect on our
business and financial condition; and
our business may be harmed by technological and therapeutic
changes or by shifts in doctors or patients
preferences for alternative treatments.
3
Table of Contents
Shenzhen Aohua Medical Services Co., Ltd., our wholly owned
subsidiary incorporated in the PRC that engages in the provision
of radiotherapy and diagnostic center management services to
hospitals in the PRC;
Shenzhen Aohua Medical Leasing and Services Co., Ltd., our
wholly owned subsidiary incorporated in the PRC that engages in
the provision of radiotherapy and diagnostic equipment leasing
services to hospitals in the PRC;
Medstar (Shanghai) Leasing Co., Ltd., our wholly owned
subsidiary incorporated in the PRC that engages in the sale of
medical equipment and the provision of radiotherapy and
diagnostic equipment leasing and management services to
hospitals in the PRC;
CMS Hospital Management Co., Ltd., our wholly owned subsidiary
incorporated in the PRC that engages in the provision of
radiotherapy and diagnostic equipment management services to
hospitals in the PRC; and
Beijing Xing Heng Feng Medical Technology Co., Ltd., our wholly
owned subsidiary incorporated in the PRC that engages in the
provision of radiotherapy and diagnostic equipment management
services to hospitals in the PRC.
4
Table of Contents
5
Table of Contents
ADRs are to the American depositary receipts, which,
if issued, evidence our ADSs;
ADSs are to our American depositary shares, each of
which
represents
ordinary shares;
China and the PRC are to the
Peoples Republic of China, excluding, for the purposes of
this prospectus only, Taiwan and the special administrative
regions of Hong Kong and Macau;
ordinary shares are to our ordinary shares, par
value US$0.0001 per share;
PRC subsidiaries are to our subsidiaries
incorporated in the Peoples Republic of China, including
Aohua Medical, Aohua Leasing, Shanghai Medstar, CMS Hospital
Management Co., Ltd., or CMS Hospital Management, and Xing Heng
Feng Medical;
RMB and Renminbi are to the legal
currency of China;
US$ and U.S. dollars are to the
legal currency of the United States;
we, us, our company and
our are to Concord Medical Services Holdings
Limited, its predecessor entities and its consolidated
subsidiaries; and
£ is to the legal currency of the United
Kingdom of Great Britain and Northern Ireland.
6
Table of Contents
Price per ADS
We currently estimate that the initial public offering price
will be between
US$
and
US$
per ADS.
ADS offered by us
ADSs
ADSs
Each ADS
represents
ordinary shares, par value US$0.0001 per share. The ADSs may be
evidenced by an ADR.
The depositary will be the holder of the ordinary shares
underlying the ADSs and you will have the rights of an ADS
holder as provided in the deposit agreement among us, the
depositary and owners and beneficial owners of ADSs from time to
time.
You may surrender your ADSs to the depositary to withdraw the
ordinary shares underlying your ADSs. The depositary will charge
you a fee for such an exchange.
We may amend or terminate the deposit agreement for any reason
without your consent. If an amendment becomes effective, you
will be bound by the deposit agreement as amended if you
continue to hold your ADSs.
To better understand the terms of the ADSs, you should carefully
read the section in this prospectus entitled Description
of American Depositary Shares. We also encourage you to
read the deposit agreement, which is an exhibit to the
registration statement that includes this prospectus.
We and the selling shareholders have granted the underwriters an
option, exercisable within 30 days from the date of this
prospectus, to purchase up to an aggregate
of
additional ADSs
representing
ordinary shares
immediately after the
offering
ordinary shares
(or
ordinary shares if the underwriters exercise the option to
purchase additional ADSs in full), excluding ordinary shares
reserved for issuance under our 2008 share incentive plan.
after the offering
ADSs
(or
ADSs if the underwriters exercise the option to purchase
additional ADSs in full).
We will receive net proceeds from this offering of approximately
US$ million,
after deducting the underwriting discounts and commissions and
estimated aggregate offering expenses payable by us. We intend
to use a portion of the net proceeds we receive from this
offering for the following purposes:
We will use the remaining portion of the net proceeds we receive
from this offering for the expansion of our network of centers
and for general corporate purposes, including potential
acquisitions of, or
7
Table of Contents
investments in, other businesses or technologies that we believe
will complement our current operations and expansion strategies.
See Use of Proceeds for additional information.
We will not receive any of the proceeds from the sale of the
ADSs by the selling shareholders.
We have applied to have our ADSs traded on the New York Stock
Exchange, or the NYSE. Our ordinary shares will not be listed on
any exchange or quoted for trading on any over-the-counter
trading system.
CCM
We, our directors, executive officers and all existing
shareholders have agreed with the underwriters, subject to
certain exceptions, not to sell, transfer or dispose of any of
our ADSs, ordinary shares or similar securities for a period of
180 days after the date of this prospectus. See
Underwriting.
At our request, the underwriters have reserved for sale, at the
public offering price, up to an aggregate
of ADSs offered by this prospectus
to our directors, officers, employees, business associates and
related persons through a reserved share program.
JPMorgan Chase Bank, N. A.
The ADSs are expected to be delivered against payment
on ,
2009. The ADSs will be deposited with a custodian for, and
registered in the name of a nominee of, The Depository
Trust Company, or DTC, in New York, New York. Initially,
beneficial interests in the ADSs will be shown on, and transfers
of these beneficial interest will be effected through, records
maintained by DTC and its direct and indirect participants.
See Risk Factors and other information included in
this prospectus for a discussion of factors you should carefully
consider before deciding to invest in the ADSs.
8
Table of Contents
10
11
12
9
Table of Contents
Concord
Medical
Predecessor
(Successor)
Combined
Concord Medical (Successor)
Period from
Period from
January 1,
September 10,
2007 to
2007 to
Year Ended
October 30,
December 31,
December 31,
Nine Months Ended September 30,
2007
2007
2007
Year Ended December 31, 2008
2008
2009
RMB
RMB
RMB
US$
RMB
RMB
RMB
US$
(in thousands, except share, per share and per ADS data)
63,082
13,001
76,083
155,061
22,716
94,296
184,937
27,092
4,340
982
5,322
12,677
1,857
7,519
20,096
2,944
4,051
593
178
624
91
67,422
13,983
81,405
171,789
25,166
101,993
205,657
30,127
(20,396
)
(1,908
)
(22,304
)
(25,046
)
(3,669
)
(14,671
)
(42,144
)
(6,174
)
(2,002
)
(2,002
)
(20,497
)
(3,003
)
(13,671
)
(20,388
)
(2,987
)
(20
)
(4
)
(24
)
(54
)
(8
)
(19
)
(9
)
(1
)
(20,416
)
(3,914
)
(24,330
)
(45,597
)
(6,680
)
(28,361
)
(62,541
)
(9,162
)
47,006
10,069
57,075
126,192
18,486
73,632
143,116
20,965
(1,601
)
(757
)
(2,358
)
(5,497
)
(805
)
(3,275
)
(4,463
)
(654
)
(8,467
)
(57,171
)
(65,638
)
(18,869
)
(2,764
)
(12,468
)
(19,687
)
(2,884
)
36,938
(47,859
)
(10,921
)
101,826
14,917
57,889
118,966
17,427
(2,494
)
(649
)
(3,143
)
578
84
(5,262
)
(4,275
)
(626
)
34,444
(48,508
)
(14,064
)
102,404
15,001
52,627
114,691
16,801
(15,014
)
182
(14,832
)
(23,335
)
(3,418
)
(12,611
)
(25,734
)
(3,770
)
19,430
(48,326
)
(28,896
)
79,069
11,583
40,016
88,957
13,031
(270,343
)
(39,604
)
(262,286
)
(23,851
)
(3,494
)
(304,763
)
(44,646
)
(38,383
)
(5,623
)
19,430
(48,326
)
(28,896
)
(496,037
)
(72,667
)
(222,270
)
26,723
3,914
0.39
(0.97
)
(0.58
)
(8.63
)
(1.26
)
(3.67
)
0.38
0.06
50,000,000
50,000,000
50,000,000
57,481,400
57,481,000
60,621,700
70,428,100
70,428,100
(1)
Our general and administrative
expenses include share-based compensation expenses related to
certain share options granted in 2007 that amounted to
RMB49.5 million, RMB4.2 million (US$0.6 million)
and RMB4.2 million in 2007, 2008 and for the nine months
ended September 30, 2008, respectively. We did not
recognize any
share-based
compensation expenses for the nine months ended
September 30, 2009.
(2)
On November 17, 2009, we
effected a share split whereby all of our issued and outstanding
704,281 ordinary shares of a par value of US$0.01 per share were
split into 70,428,100 ordinary shares of US$0.0001 par value per
share and the number of our authorized shares were increased
from 4,500,000 to 450,000,000. The share split has been
retroactively reflected in this prospectus so that share number,
per share price and par value data are presented as if the share
split had occurred from our inception.
Table of Contents
Actual
Pro Forma as
As of December 31,
As of September 30,
Adjusted as of
2007
2008
2008
2009
September 30,
2009
(1)
RMB
RMB
US$
RMB
US$
RMB
US$
(in thousands)
39,792
353,991
51,858
285,703
41,854
66,135
492,978
72,219
466,487
68,338
54,703
349,121
51,144
557,433
81,661
557,433
81,661
259,282
300,163
43,972
300,163
43,972
300,163
43,972
129,998
181,838
26,638
161,450
23,652
161,450
23,652
543,023
1,514,395
221,850
1,673,254
245,122
39,840
5,836
44,880
6,575
44,880
6,575
52,120
7,635
104,912
15,369
104,912
15,369
254,358
37,262
269,017
39,409
411,101
60,224
434,036
63,584
394,878
565,020
82,772
591,582
86,663
543,023
1,514,395
221,850
1,673,254
245,122
(1)
Pro forma as adjusted summary
consolidated balance sheet data take into account (i) the
automatic conversion of all our outstanding contingently
redeemable convertible preferred shares
into
of our ordinary shares immediately upon the completion of this
offering and (ii) the issuance and sale
of ordinary
shares in the form of ADSs by us in this offering, assuming an
initial public offering price of
US$ per
ADS, the midpoint of the estimated range of the initial public
offering price, after deducting estimated underwriting discounts
and commissions and estimated aggregate offering expenses
payable by us and assuming no exercise of the underwriters
option to purchase additional ADSs and no other change to the
number of ADSs sold by us as set forth on the cover of this
prospectus. Assuming the number of ADSs offered by us as set
forth on the cover page of this prospectus remains the same, and
after deduction of underwriting discounts and commissions and
the estimated offering expenses payable by us, a US$1.00
increase (decrease) in the assumed initial public offering price
of
US$
per ADS would increase (decrease) each of cash, total current
assets, total assets, total shareholders equity and total
liabilities and shareholders equity by
US$ million.
Predecessor
Concord Medical (Successor)
Period
Period
from
from
January 1,
September 10,
2007 to
2007 to
October 30,
December 31,
Nine Months Ended September 30,
2007
2007
Year Ended December 31, 2008
2008
2009
RMB
RMB
RMB
US$
RMB
RMB
US$
(in thousands)
44,593
6,103
46,774
6,852
27,370
104,500
15,308
(50,452
)
(30,441
)
(376,371
)
(55,136
)
(300,692
)
(223,426
)
(32,731
)
6,020
63,225
649,494
95,147
278,407
50,829
7,448
138
(5,698
)
(834
)
(5,949
)
(191
)
(29
)
161
39,025
314,199
46,029
(864
)
(68,288
)
(10,004
)
(1)
Net cash used in investing
activities in 2008 and for the nine months ended September 30,
2008 and 2009 includes cash used for acquisitions, net of cash
acquired, of RMB231.5 million (US$33.9 million),
RMB219.1 million and RMB21.5 million (US$3.2 million),
respectively.
Table of Contents
Concord
Medical
(Successor)
Combined
Concord Medical (Successor)
Predecessor
Period
Period
from
from January 1,
September 10,
2007 to
2007 to
Year Ended
October 30,
December 31,
December 31,
Nine Months Ended September 30,
2007
2007
2007
Year Ended December 31, 2008
2008
2009
RMB
RMB
RMB
RMB
US$
RMB
RMB
US$
(in thousands)
54,844
4,753
59,597
144,167
21,120
85,188
174,455
25,556
(1)
Adjusted EBITDA is defined as net
(loss) income plus interest, taxes, depreciation and
amortization, share-based compensation expenses and other
adjustments. Adjusted EBITDA is used by management to evaluate
our financial performance and determine the allocation of
resources and provides the management with the ability to
determine our return on capital expenditure relating to our
purchase of medical equipment used in our network of centers and
businesses acquired. Items that are eliminated from the
calculation of Adjusted EBITDA are collectively managed by our
senior executive officers, taking into consideration our
strategic, business and financial goals. Depreciation and
amortization are primarily managed by our chief executive
officer, our chief operating officer and our chief financial
officer. Share-based compensation expense is primarily managed
by our chief executive officer and our financial officers.
Interest expense and income, income tax expense or benefit and
all other items eliminated from the calculation of Adjusted
EBITDA are primarily managed by our chief executive officer, our
financial controller and corporate vice president. In addition,
we believe that Adjusted EBITDA will be a key metric analyzed in
determining the amount of new debt financing that may be
available to us and, therefore, we believe this measure provides
investors with additional information about our ability to fund
our growth through debt financing, if needed. Furthermore,
Adjusted EBITDA eliminates the impact of items that we do not
consider indicative of the performance of our network of
centers. For example, depreciation and amortization expenses
relating to the medical equipment used in our network of centers
and acquired intangibles represented historical accrued
expenditures that are not indicative of the operating
performance of our network of centers during the periods
presented. We believe investors will similarly use Adjusted
EBITDA as one of the key metrics to evaluate our financial
performance and to compare our current operating results with
corresponding historical periods and with other companies in the
healthcare services industry. The presentation of Adjusted
EBITDA should not be construed as an indication that our future
results will be unaffected by other charges and gains we
consider to be outside the ordinary course of our business.
The use of Adjusted EBITDA has
certain limitations. Items excluded from Adjusted EBITDA are
significant components in understanding and assessing our
operating and financial performance. Depreciation and
amortization expense, income tax expense, interest expense and
interest income as well as share-based compensation expenses
have been and will be incurred in our business and are not
reflected in the presentation of Adjusted EBITDA. Each of these
items should also be considered in the overall evaluation of our
results. Additionally, Adjusted EBITDA does not consider capital
expenditures and other investing activities and should not be
considered as a measure of our liquidity. We compensate for
these limitations by providing the relevant disclosure of our
depreciation and amortization expense, interest expense and
interest income, income tax expense, capital expenditures as
well as share-based compensation expenses and other relevant
items both in our reconciliations to the U.S. GAAP financial
measures and in our consolidated financial statements, all of
which should be considered when evaluating our performance. The
term Adjusted EBITDA is not defined under U.S. GAAP, and
Adjusted EBITDA is not a measure of net income, operating
income, operating performance or liquidity presented in
accordance with U.S. GAAP. When assessing our operating and
financial performance, you should not consider this data in
isolation or as a substitute for our net income, operating
income or any other operating performance measure that is
calculated in accordance with U.S. GAAP. In addition, our
Adjusted EBITDA may not be comparable to Adjusted EBITDA or
similarly titled measures utilized by other companies since such
other companies may not calculate Adjusted EBITDA in the same
manner as we do.
Table of Contents
The following table is a
reconciliation of Adjusted EBITDA to net income, the most
directly comparable financial measure calculated and presented
in accordance with U.S. GAAP:
Nine Months Ended September 30,
Concord
Predecessor
Medical
Period from
(Successor)
Combined
Concord Medical (Successor)
January 1,
Period from
2007 to
September 10, 2007 to
Year Ended
October 30,
December 31,
December 31,
2007
2007
2007
Year Ended December 31, 2008
2008
2009
RMB
RMB
RMB
RMB
US$
RMB
RMB
US$
(in thousands)
19,430
(48,326
)
(28,896
)
79,069
11,583
40,016
88,957
13,031
939
279
1,218
7,025
1,029
5,177
4,057
594
15,014
(182
)
14,832
23,335
3,418
12,611
25,734
3,770
17,906
3,086
20,992
38,126
5,585
23,084
55,489
8,129
49,526
49,526
4,215
617
4,215
1,555
370
1,925
(7,603
)
(1,114
)
85
218
32
54,844
4,753
59,597
144,167
21,120
85,188
174,455
25,556
13
Table of Contents
As of December 31,
As of September 30,
Operating
Data
(1)
2007
2008
2009
1
12
16
15
15
16
8
9
10
3
7
2
10
16
8
15
16
34
64
81
Year Ended December 31,
Nine Months Ended September 30,
2007
2008
2009
697
4,678
8,554
8,493
9,455
7,767
2,635
3,057
2,706
1,929
3,766
11,830
31,827
57,972
Predecessor
Concord Medical (Successor)
Combined
Concord Medical (Successor)
Period from
Period from
January 1, 2007
September 1,
Year Ended
to October 30,
2007 to
December 31,
Nine Months Ended September 30,
2007
December 31, 2007
2007
Year Ended December 31, 2008
2008
2009
(in RMB thousands)
3,206
877
4,083
40,506
21,588
60,183
40,408
8,731
49,139
65,365
47,096
51,673
13,537
2,565
16,102
20,071
12,225
18,204
5,241
578
14,289
2,899
437
3,336
15,123
7,515
27,618
3,032
391
3,423
8,755
5,294
12,970
63,082
13,001
76,083
155,061
94,296
184,937
(1)
Excluding data from seven, eight
and two centers under service-only agreements as of
December 31, 2007, December 31, 2008 and
September 30, 2009, respectively.
(2)
Other primary medical equipment
used includes computed tomography scanners, or CT scanners, and
emission computed tomography scanners, or ECT scanners, for
diagnostic imaging, electroencephalography for the diagnosis of
epilepsy, thermotherapy to increase the efficacy of and for pain
relief after radiotherapy and chemotherapy, high intensity
focused ultrasound therapy for the treatment of cancer,
stereotactic radiofrequency ablation for the treatment of
Parkinsons Disease and refraction and tonometry for the
diagnosis of ophthalmic conditions.
14
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16
FOR THE YEAR ENDED DECEMBER 31, 2008
15
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Pro Forma
Pro Forma
Concord Medical
China Medstar
Adjustment
Combined
Seven-month
Year Ended
Period Ended
December 31, 2008
July 31, 2008
2008
RMB
RMB
RMB
US$
(in thousands, except share, per share and per ADS data)
155,061
48,745
203,806
29,856
12,677
7,980
20,657
3,026
4,051
6,148
10,199
1,494
171,789
62,873
234,662
34,377
(25,046
)
(14,806
)
5,624
(1)
(34,228
)
(5,014
)
(20,497
)
(5,743
)
(1)
(26,240
)
(3,844
)
(54
)
(63
)
(117
)
(17
)
(45,597
)
(14,869
)
(60,585
)
(8,875
)
126,192
48,004
174,077
25,501
(5,497
)
(1,581
)
(7,078
)
(1,037
)
(18,869
)
(8,340
)
(27,209
)
(3,986
)
101,826
38,083
139,790
20,478
(7,455
)
(1,585
)
(9,040
)
(1,324
)
(464
)
(464
)
(68
)
(325
)
(230
)
(555
)
(81
)
658
658
96
430
32
462
68
7,734
(200
)
7,534
1,104
102,404
36,100
138,385
20,273
(23,335
)
(8,445
)
21
(2
)
(31,759
)
(4,653
)
79,069
27,655
106,626
15,620
1.38
1.85
0.27
57,481,400
57,481,400
57,481,400
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(1)
The aggregate purchase price of
approximately £17.1 million (RMB238.7 million or
US$35.0 million) for the purchase of China Medstar is
comprised of the following:
RMB
US$
(in thousands)
21,210
3,107
77,053
11,287
9,397
1,377
217,965
31,931
52,380
7,673
83,505
12,233
23,089
3,382
(12,529
)
(1,835
)
(233,323
)
(34,180
)
238,747
34,975
The preliminary purchase price
allocation and preliminary intangible asset valuations described
above were based on valuation work determined by us with the
assistance of American Appraisal China Limited, an independent
valuation firm. The valuation report utilizes and considers
generally accepted valuation methodologies such as the income,
market, cost and actual transaction of shares approach. We have
incorporated certain assumptions which include projected cash
flows and replacement costs.
This adjustment of
RMB5.6 million reflects an additional seven full months of
amortization of the acquired intangibles recorded as a result of
our acquisition of China Medstar on July 31, 2008 as if the
acquisition had been consummated on January 1, 2008.
This adjustment of
RMB5.7 million reflects an additional reduction in
depreciation expense as if the acquisition had been consummated
on January 1, 2008 related to medical equipment because the
assigned estimated fair values are lower than the net book
values as at the acquisition date.
(2)
Reflects the adjustment to income
tax expense based on the pro forma adjusting entries to
depreciation expense and amortization expense discussed above.
17
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reduction in the number of patient cases at the centers located
at these partner hospitals;
18
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loss of key experienced medical professionals;
decrease in the profitability of such centers;
failure to maintain or renew our agreements with these hospital
partners;
any failure of these hospital partners to pay us our contracted
percentage of any such centers revenue net of specified
operating expenses;
any regulatory changes in the geographic areas where our
hospital partners are located; or
any other disputes with these hospital partners.
19
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20
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21
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22
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23
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24
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25
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26
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our future financial condition, results of operations and cash
flows;
general market conditions for capital raising and debt financing
activities; and
economic, political and other conditions in China and elsewhere.
27
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28
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have a majority of the board be independent (other than due to
the requirements for the audit committee under the United States
Securities Exchange Act of 1934, as amended, or the Exchange
Act);
have a minimum of three members in our audit committee;
have a compensation committee, a nominating or corporate
governance committee;
provide annual certification by our chief executive officer that
he or she is not aware of any non-compliance with any corporate
governance rules of the NYSE;
have regularly scheduled executive sessions with only
non-management directors;
have at least one executive session of solely independent
directors each year;
seek shareholder approval for (i) the implementation and
material revisions of the terms of share incentive plans,
(ii) the issuance of more than 1% of our outstanding
ordinary shares or 1% of the voting power outstanding to a
related party, (iii) the issuance of more than 20% of our
outstanding ordinary shares, and (iv) an issuance that
would result in a change of control;
adopt and disclose corporate governance guidelines; or
adopt and disclose a code of business conduct and ethics for
directors, officers and employees.
29
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30
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31
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32
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33
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the degree of government involvement;
the level of development;
the growth rate;
the control of foreign exchange;
the allocation of resources;
an evolving regulatory system; and
lack of sufficient transparency in the regulatory process.
34
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35
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36
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37
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38
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39
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40
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41
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announcements of technological or competitive developments;
regulatory developments in China affecting us or our competitors;
announcements of studies and reports relating to the
effectiveness or safety of the services provided in our network
of centers or those of our competitors;
actual or anticipated fluctuations in our quarterly operating
results and changes or revisions of our expected results;
changes in financial estimates by securities research analysts;
changes in the economic performance or market valuations of
other medical services companies;
addition or departure of our senior management and other key
personnel;
release or expiry of
lock-up
or
other transfer restrictions on our outstanding ordinary shares
or ADSs; and
sales or perceived sales of additional ordinary shares or ADSs.
42
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43
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44
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the risks, challenges and uncertainties in the radiotherapy and
diagnostic imaging industry and for our business generally;
our beliefs regarding our strengths and strategies;
our current expansion strategy, including our ability to expand
our network of centers and to establish specialty cancer
hospitals;
our ability to maintain strong working relationships with our
hospital partners;
our expectations regarding patients and their referring
doctors demand for and acceptance of the radiotherapy and
diagnostic imaging services offered by our centers;
changes in the healthcare industry in China, including changes
in the healthcare policies and regulations of the PRC government;
technological or therapeutic changes affecting the field of
cancer treatment and diagnostic imaging;
our ability to comply with all relevant environmental, health
and safety laws and regulations;
our ability to obtain and maintain permits, licenses and
registrations to carry on our business;
our planned use of proceeds;
our future prospects, business development, results of
operations and financial condition; and
fluctuations in general economic and business conditions in
China.
45
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approximately US$20 million to US$25 million to
develop our Changan CMS International Cancer
Center; and
approximately US$25 million to US$30 million to
develop our Beijing Proton Medical Center.
46
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47
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on an actual basis; and
on a pro forma as adjusted basis to reflect (i) the
automatic conversion of all our outstanding contingently
redeemable convertible preferred shares into 41,027,400 of our
ordinary shares immediately upon the completion of this offering
and (ii) the issuance and sale
of
ordinary shares in the form of ADSs by us in this offering,
assuming an initial public offering price of
US$
per ADS, the midpoint of the estimated range of the initial
public offering price, after deducting estimated underwriting
discounts and commissions and estimated aggregate offering
expenses payable by us and assuming no exercise of the
underwriters option to purchase additional ADSs and no
other change to the number of ADSs sold by us as set forth on
the cover page of this prospectus.
As of September 30, 2009
Actual
Pro Forma as Adjusted
RMB
US$
RMB
US$
(in thousands)
104,912
15,369
104,912
15,369
8,719
1,277
8,719
1,277
269,017
39,410
434,036
63,584
55
8
1,113,204
163,078
(4,037
)
(592
)
(4,037
)
(591
)
(517,640
)
(75,831
)
(517,640
)
(75,831
)
591,582
86,663
1,408,266
206,303
(1)
On November 17, 2009, we
effected a share split whereby all of our issued and outstanding
704,281 ordinary shares of a par value of US$0.01 per share were
split into 70,428,100 ordinary shares of US$0.0001 par value per
share and the number of our authorized shares were increased
from 4,500,000 to 450,000,000. The share split has been
retroactively reflected in this prospectus so that share number,
per share price and par value data are presented as if the share
split had occurred from our inception.
(2)
Assuming the number of ADSs offered
by us as set forth on the cover page of this prospectus remains
the same, and after deduction of underwriting discounts and
commissions and the estimated offering expenses payable by us, a
US$1.00 increase (decrease) in the assumed initial public
offering price of
US$
per ADS would increase (decrease) each of additional paid-in
capital, total shareholders equity and total
capitalization by
US$ million.
48
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US$
US$
US$
US$
49
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Average Price
Ordinary Shares Purchased
Total Consideration
per Ordinary
Average Price
Number
Percent
Amount
Percent
Share
per ADSs
%
%
US$
US$
US$
US$
%
%
US$
US$
50
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Noon Buying Rate
Period End
Average
(1)
Low
High
(RMB per US$1.00)
8.2765
8.2768
8.2774
8.2764
8.0702
8.1826
8.2765
8.0702
7.8041
7.9579
8.0702
7.8041
7.2946
7.5806
7.8127
7.2946
6.8225
6.9193
7.2946
6.7800
6.8262
6.8306
6.8470
6.8176
6.8227
6.8221
6.8265
6.8176
6.8302
6.8334
6.8371
6.8264
6.8319
6.9186
6.8342
6.8300
6.8299
6.8323
6.8358
6.8299
6.8262
6.8277
6.8303
6.8247
6.8264
6.8267
6.8292
6.8248
6.8260
6.8265
6.8278
6.8255
(1)
Annual averages are calculated from
month-end rates. Monthly averages are calculated using the
average of the daily rates during the relevant period.
51
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political and economic stability;
an effective judicial system;
a favorable tax system;
the absence of exchange control or currency restrictions; and
the availability of professional and support services.
the Cayman Islands has a less developed body of securities laws
as compared to the United States and provides significantly less
protection to investors; and
Cayman Islands companies do not have standing to sue before the
federal courts of the United States.
recognize or enforce judgments of United States courts obtained
against us or our directors or officers predicated upon the
civil liability provisions of the securities laws of the United
States or any state in the United States; or
entertain original actions brought in each respective
jurisdiction against us or our directors or officers predicated
upon the securities laws of the United States or any state in
the United States.
a final and conclusive judgment in the federal or state courts
of the United States under which a sum of money is payable,
other than a sum payable in respect of taxes, fines, penalties
or similar charges, and which was neither obtained in a waiver
nor is of a kind of enforcement which is contrary to natural
justice or the public policy of the Cayman Islands, may be
subject to enforcement proceedings as a debt in the courts of
the Cayman Islands under common law; and
52
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it is unlikely that a monetary award ordered by a
U.S. court as a result of a fine or a penalty arising under
the U.S. federal securities laws would be recognized as
valid, or enforced, by the courts of the Cayman Islands.
53
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Shenzhen Aohua Medical Services Co., Ltd., our wholly owned
subsidiary incorporated in the PRC that engages in the provision
of radiotherapy and diagnostic center management services to
hospitals in the PRC;
Shenzhen Aohua Medical Leasing and Services Co., Ltd., our
wholly owned subsidiary incorporated in the PRC that engages in
the provision of radiotherapy and diagnostic equipment leasing
services to hospitals in the PRC;
Medstar (Shanghai) Leasing Co., Ltd., our wholly owned
subsidiary incorporated in the PRC that engages in the sale of
medical equipment and the provision of radiotherapy and
diagnostic equipment leasing and management services to
hospitals in the PRC;
CMS Hospital Management Co., Ltd., our wholly owned subsidiary
incorporated in the PRC that engages in the provision of
radiotherapy and diagnostic equipment management services to
hospitals in the PRC; and
Beijing Xing Heng Feng Medical Technology Co., Ltd., our wholly
owned subsidiary incorporated in the PRC that engages in the
provision of radiotherapy and diagnostic equipment management
services to hospitals in the PRC.
54
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55
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57
56
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Predecessor
Concord Medical (Successor)
Period from
Period from
January 1,
September 10,
Year Ended
2007 to
2007 to
December 31,
October 30,
December 31,
Year Ended December 31,
Nine Months Ended September 30,
2006
2007
2007
2008
2008
2009
RMB
RMB
US$
RMB
RMB
RMB
RMB
US$
(in thousands, except share, per share and per ADS data)
61,440
63,082
13,001
155,061
22,716
94,296
184,937
27,092
876
4,340
982
12,677
1,857
7,519
20,096
2,944
4,051
593
178
624
91
62,316
67,422
13,983
171,789
25,166
101,993
205,657
30,127
(22,388
)
(20,396
)
(1,908
)
(25,046
)
(3,669
)
(14,671
)
(42,144
)
(6,174
)
(2,002
)
(20,497
)
(3,003
)
(13,671
)
(20,388
)
(2,987
)
(24
)
(20
)
(4
)
(54
)
(8
)
(19
)
(9
)
(1
)
(22,412
)
(20,416
)
(3,914
)
(45,597
)
(6,680
)
(28,361
)
(62,541
)
(9,162
)
39,904
47,006
10,069
126,192
18,486
73,632
143,116
20,965
(1,267
)
(1,601
)
(757
)
(5,497
)
(805
)
(3,275
)
(4,463
)
(654
)
(15,600
)
(8,467
)
(57,171
)
(18,869
)
(2,764
)
(12,468
)
(19,687
)
(2,884
)
23,037
36,938
(47,859
)
101,826
14,917
57,889
118,966
17,427
(1,710
)
(954
)
(279
)
(7,455
)
(1,092
)
(5,293
)
(4,880
)
(715
)
(341
)
(464
)
(68
)
(460
)
(4
)
(325
)
(48
)
(17
)
(218
)
(32
)
(469
)
(1,555
)
(25
)
658
96
392
68
15
430
63
116
823
121
7,734
1,133
20,926
34,444
(48,508
)
102,404
15,001
52,627
114,691
16,801
(4,097
)
(15,014
)
182
(23,335
)
(3,418
)
(12,611
)
(25,734
)
(3,770
)
16,829
19,430
(48,326
)
79,069
11,583
40,016
88,957
13,031
(270,343
)
(39,604
)
(262,286
)
(23,851
)
(3,494
)
(304,763
)
(44,646
)
(38,383
)
(5,623
)
16,829
19,430
(48,326
)
(496,037
)
(72,667
)
(222,270
)
26,723
3,914
0.34
0.39
(0.97
)
(8.63
)
(1.26
)
(3.67
)
0.38
0.06
50,000,000
50,000,000
50,000,000
57,481,400
57,481,000
60,621,700
70,428,100
70,428,100
(1)
Our general and administrative
expenses include share-based compensation expenses related to
certain share options granted in 2007 that amounted to
RMB49.5 million, RMB4.2 million (US$0.6 million)
and RMB4.2 million in 2007, 2008 and for the nine months
ended September 30, 2008, respectively. We did not
recognize any share-based compensation expenses in 2006 and for
the nine months ended September 30, 2009.
(2)
On November 17, 2009, we
effected a share split whereby all of our issued and outstanding
704,281 ordinary shares of a par value of US$0.01 per share were
split into 70,428,100 ordinary shares of US$0.0001 par value per
share and the number of our authorized shares were increased
from 4,500,000 to 450,000,000. The share split has been
retroactively reflected in this prospectus so that share number,
per share price and par value data are presented as if the share
split had occurred from our inception.
Table of Contents
As of December 31,
As of September 30,
2006
2007
2008
2008
2009
RMB
RMB
RMB
US$
RMB
US$
(in thousands)
606
39,792
353,991
51,858
285,703
41,854
23,333
66,135
492,978
72,219
466,487
68,338
231,215
54,703
349,121
51,144
557,433
81,661
259,282
300,163
43,972
300,163
43,972
129,998
181,838
26,638
161,450
23,652
256,330
543,023
1,514,395
221,850
1,673,254
245,122
39,840
5,836
44,880
6,575
52,120
7,635
104,912
15,369
254,358
37,262
269,017
39,409
411,101
60,224
434,036
63,584
134,264
394,878
565,020
82,772
591,582
86,663
256,330
543,023
1,514,395
221,850
1,673,254
245,122
Predecessor
Concord Medical (Successor)
Period from
Period from
January 1,
September 10,
2007
2007
to
to
October 30,
December 31,
Nine Months Ended September 30,
2007
2007
Year Ended December 31, 2008
2008
2009
RMB
RMB
RMB
US$
RMB
RMB
US$
(in thousands)
44,593
6,103
46,774
6,852
27,370
104,500
15,308
(50,452
)
(30,441
)
(376,371
)
(55,136
)
(300,692
)
(223,426
)
(32,731
)
6,020
63,225
649,494
95,147
278,407
50,829
7,448
138
(5,698
)
(834
)
(5,949
)
(191
)
(29
)
161
39,025
314,199
46,029
(864
)
(68,288
)
(10,004
)
(1)
Net cash used in investing
activities in 2008 and for the nine months ended September 30,
2008 and 2009 includes acquisition, net of cash acquired, of
RMB231.5 million (US$33.9 million).
RMB219.2 million and RMB21.5 million
(US$3.2 million), respectively.
58
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As of December 31,
As of September 30,
Operating
Data
(1)
2007
2008
2009
1
12
16
15
15
16
8
9
10
3
7
2
10
16
8
15
16
34
64
81
Year Ended December 31,
Nine Months Ended September 30,
2007
2008
2009
697
4,678
8,554
8,493
9,455
7,767
2,635
3,057
2,706
1,929
3,766
11,830
31,827
57,972
Predecessor
Concord Medical (Successor)
Combined
Concord Medical (Successor)
Period from
Period from
January 1, 2007
September 1,
Year Ended
to October 30,
2007 to
December 31,
Nine Months Ended September 30,
2007
December 31, 2007
2007
Year Ended December 31, 2008
2008
2009
(in RMB thousands)
3,206
877
4,083
40,506
21,588
60,183
40,408
8,731
49,139
65,365
47,096
51,673
13,537
2,565
16,102
20,071
12,225
18,204
5,241
578
14,289
2,899
437
3,336
15,123
7,515
27,618
3,032
391
3,423
8,755
5,294
12,970
63,082
13,001
76,083
155,061
94,296
184,937
(1)
Excluding data from seven, eight
and two centers under service-only agreements as of
December 31, 2007, December 31, 2008 and
September 30, 2009, respectively.
(2)
Other primary medical equipment
used includes CT scanners and ECT scanners for diagnostic
imaging, electroencephalography for the diagnosis of epilepsy,
thermotherapy to increase the efficacy of and for pain relief
after radiotherapy and chemotherapy, high intensity focused
ultrasound therapy for the treatment of cancer, stereotactic
radiofrequency ablation for the treatment of Parkinsons
Disease and refraction and tonometry for the diagnosis of
ophthalmic conditions.
59
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95
AND RESULTS OF OPERATIONS
60
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our ability to expand our network of centers;
the number of patient cases treated in our network;
the operational arrangements with our hospital partners;
the range and mix of services provided in our network; and
the cost of our medical equipment.
61
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the reputation of our existing network of centers and doctors
providing services in our network of centers;
our financial resources;
our ability to timely establish and manage new centers in
conjunction with our hospital partners; and
our relationship with our hospital partners.
the size and location of potential hospital partner;
the length of the arrangement;
the type of medical equipment to be installed in the
hospitals center;
the capabilities of the doctors that will provide services at
the centers; and
the potential growth of such center.
62
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63
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China Medstar in July 2008 for approximately
£17.1 million or approximately RMB238.7 million
(US$35.0 million);
Xing Heng Feng Medical in October 2008 for approximately
RMB35.0 million (US$5.1 million);
certain medical equipment located in Tianjin Peoples
Liberation Army 272 Hospital and the related business from a
third party for RMB14.0 million
(US$2.1 million); and
certain medical equipment located in Peoples Liberation
Army 254 Hospital and the related business from another third
party for RMB4.0 million (US$0.6 million).
64
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Year Ended December 31,
Nine Months Ended September 30,
2007
(1)
2008
2008
2009
% of Total
% of Total
% of Total
% of Total
RMB
Net Revenues
RMB
US$
Net Revenues
RMB
Net Revenues
RMB
US$
Net Revenues
(in thousands, except for percentages)
76,083
93.5
155,061
22,716
90.3
94,296
92.5
184,937
27,092
89.9
5,322
6.5
12,677
1,857
7.4
7,519
7.4
20,096
2,944
9.8
4,051
593
2.3
178
0.1
624
91
0.3
81,405
100.0
171,789
25,166
100.0
101,993
100.0
205,657
30,127
100.0
(1)
Represent the addition of the
amounts for the specific line items of OMS, our predecessor, for
the period from January 1, 2007 to October 30, 2007,
and the amounts for the corresponding line items of Concord
Medical for the period from September 10, 2007 to
December 31, 2007. For the period from September 10,
2007, the date of inception of Ascendium, to October 30,
2007, during which period the financial statements of our
predecessor and those of Concord Medical overlap, Ascendium did
not engage in any business or operations. The unaudited combined
financial data for the year ended December 31, 2007 do not
comply with U.S. GAAP.
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Year Ended December 31,
Nine Months Ended September 30,
2007
(1)
2008
2008
2009
% of Total
% of Total
% of Total
% of Total
RMB
Net Revenues
RMB
US$
Net Revenues
RMB
Net Revenues
RMB
US$
Net Revenues
(in thousands, except for percentages)
22,304
27.4
25,046
3,669
14.6
14,671
14.4
42,144
6,174
20.5
2,002
2.5
20,497
3,003
11.9
13,671
13.4
20,388
2,987
9.9
24
0.0
54
8
0.0
19
0.0
9
1
0.0
24,330
29.9
45,597
6,680
26.5
28,361
27.8
62,541
9,162
30.4
57,075
70.1
126,192
18,486
73.5
73,632
72.2
143,116
20,965
69.6
2,358
2.9
5,497
805
3.2
3,275
3.2
4,463
654
2.2
65,638
80.6
18,869
2,764
11.0
12,468
12.2
19,687
2,884
9.6
67,996
83.5
24,366
3,569
14.2
15,743
15.4
24,150
3,538
11.7
(1)
Represent the addition of the
amounts for the specific line items of OMS, our predecessor, for
the period from January 1, 2007 to October 30, 2007,
and the amounts for the corresponding line items of Concord
Medical for the period from September 10, 2007 to
December 31, 2007. For the period from September 10,
2007, the date of inception of Ascendium, to October 30,
2007, during which the financial statements of our predecessor
and those of Concord Medical overlap, Ascendium did not engage
in any business or operations. The unaudited combined financial
data for the year ended December 31, 2007 do not comply
with U.S. GAAP.
(2)
Our general and administrative
expenses include share-based compensation expenses related to
certain share options granted in 2007 that amounted to
RMB49.5 million, RMB4.2 million (US$0.6 million)
and RMB4.2 million in 2007, 2008 and for the nine months
ended September 30, 2008, respectively. We did not
recognize any share-based compensation expenses for the nine
months ended September 30, 2009.
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72
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73
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hiring a professional consulting firm to help us to improve
internal control in preparation for compliance with the
Sarbanes-Oxley Act and other applicable SEC rules and
regulations;
hiring additional qualified personnel with U.S. GAAP
expertise and SEC reporting experience to further build an
internal finance team and a dedicated internal audit department;
improving internal control procedures and standards, including
compiling an internal accounting policies and procedures manual,
and implementing policies as to the inspections and reporting of
the medical equipment used in our network of centers;
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enhancing the periodic and systematic physical inspections of
the medical equipment used in our network of centers to monitor
the working condition of the equipment and to report damages in
a timely manner;
enhancing the management of agreements with our hospital
partners and establishing standard policies and procedures
governing agreement terms and approval process; and
conducting accounting and financial reporting training for our
existing personnel as part of our commitment to provide ongoing
U.S. GAAP trainings to our employees.
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(1)
Our general and administrative
expenses include share-based compensation expenses related to
certain share options granted in 2007 that amounted to RMB49.5
million, RMB4.2 million (US$0.6 million) and RMB4.2 million
in 2007, 2008 and for the nine months ended September 30,
2008, respectively. We did not recognize any share-based
compensation expenses for the nine months ended
September 30, 2009.
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an increase in the number of new centers that are in operation
and the higher cost of revenues as a percentage of total net
revenues associated with such centers during their
ramp-up
period; and
an increase in the number of new centers that offer diagnostic
imaging services, which have a higher cost of revenues as a
percentage of total net revenues as compared to radiotherapy
treatments.
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Selling Expenses.
Our selling expenses
increased by 36.3% to RMB4.5 million (US$0.6 million)
for the nine months ended September 30, 2009 from
RMB3.3 million for the same period in 2008. This increase
in our selling expenses was due primarily to an increase in
salaries and benefits payment associated with an increased
headcount as a result of our acquisition of China Medstar, an
increase in marketing expenses and salaries and benefits payment
in connection with an increase in our business development
efforts for the nine months ended September 30, 2009 as
compared to the same period in 2008 to increase the number of
new centers and for the development of specialty cancer
hospitals. Selling expenses as a percentage of our total net
revenues decreased to 2.1% for the nine months ended
September 30, 2009 from 3.2% for the same period in 2008.
This was due primarily to increased economies of scale.
General and Administrative Expenses.
Our
general and administrative expenses increased by 57.9% to
RMB19.7 million (US$2.9 million) for the nine months
ended September 30, 2009 from RMB12.5 million for the
same period in 2008. This increase was due primarily to
increases in salaries and benefits payment in connection with
the increased headcount of our personnel and their travel
related expenses principally as a result of our acquisition of
China Medstar and also in connection with the continued
expansion of our business. Our general and administrative
expenses include charges of RMB4.2 million for the nine
months ended September 30, 2008 related to share-based
compensation. General and administrative expenses as a
percentage of our total net revenues decreased to 9.6% for the
nine months ended September 30, 2009 from 12.2% for the
same period in 2008. This was due primarily to
share-based
compensation expenses that were incurred during the nine months
ended September 30, 2008 that we did not incur for the same
period in 2009.
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Selling Expenses.
Our selling expenses were
RMB5.5 million (US$0.8 million) in 2008. Our selling
expenses were RMB1.6 million for the period from
January 1, 2007 to October 30, 2007 and
RMB0.8 million for the period from September 10, 2007
to December 31, 2007. Our selling expenses as a percentage
of total net revenues were 3.2% in 2008. Our selling expenses as
a percentage of total net revenues were 2.4% for the period from
January 1, 2007 to October 30, 2007 and 5.4% for the
period from September 10, 2007 to December 31, 2007.
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General and Administrative Expenses.
Our
general and administrative expenses were RMB18.9 million
(US$2.8 million) in 2008. Our general and administrative
expenses were RMB8.5 million for the period from
January 1, 2007 to October 30, 2007 and
RMB57.2 million for the period from September 10, 2007
to December 31, 2007. Our general and administrative
expenses as a percentage of total net revenues were 11.0% in
2008. Our general and administrative expenses as a percentage of
total net revenues were 12.6% for the period from
January 1, 2007 to October 30, 2007 and 408.9% for the
period from September 10, 2007 to December 31, 2007.
The general and administrative expenses for the period from
September 10, 2007 to December 31, 2007 were affected
by the share-based compensation expenses from the grant of
certain OMS share options, which amounted to
RMB49.5 million. The general and administrative expenses in
2008 were also affected by the share-based compensation expenses
that amounted to RMB4.2 million (US$0.6 million) from
the transfer of vested options of certain OMS share options to
three of our executive directors.
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the downward purchase price adjustment to the fair value of the
medical equipment used in our network of centers and a decrease
in depreciation expenses as a result;
an increase in net revenues derived from centers managed under
service-only agreements as a percentage of our total net
revenues to 7.4% in 2008 from 6.5% in 2007. Centers managed
under service-only agreements have a lower cost of revenues as a
percentage of total net revenues as compared to centers managed
under lease and management services arrangements. This is
because we do not purchase the medical equipment used in the
centers managed under service-only agreements and, as a result,
do not incur the associated equipment depreciation
expenses; and
our acquisition of China Medstar, which had a lower cost of
revenues as a percentage of total net revenues as compared to
our company. This was because of the higher cost of certain of
our installed medical equipment as compared to the cost of China
Medstars medical equipment, which had a higher
depreciation expenses.
Selling Expenses.
Our selling expenses increased by
129.0% to RMB5.5 million (US$0.8 million) in 2008 from
RMB2.4 million in 2007. This increase in our selling
expenses was due primarily to an increase in marketing expenses
and salaries and benefits payment in connection with an increase
in our business development efforts in 2008 as compared to 2007
to increase the number of new centers and for the development of
specialty cancer hospitals. Selling expenses as a percentage of
our total net revenues in 2008 remained in line with 2007 and
increased slightly to 3.2% in 2008 from 2.9% in 2007.
General and Administrative Expenses.
Our general and
administrative expenses decreased by 71.3% to
RMB18.9 million (US$2.8 million) in 2008 from
RMB65.6 million in 2007. Our general and administrative
expenses include charges of RMB4.2 million
(US$0.6 million) and RMB49.5 million in 2008 and 2007,
respectively, related to share-based compensation. Our general
and administrative expenses, not including the share-based
compensation expenses, have also increased in 2008 from 2007,
which was due primarily to increases in salaries and benefits
payments in connection with the increased headcount of our
personnel as well as their travel related expenses.
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For the Three Months Ended
March 31,
June 30,
September. 30,
December 31,
March 31,
June 30,
September 30,
2008
2008
2008
2008
2009
2009
2009
(in RMB thousands)
20,672
23,813
49,811
60,765
47,349
66,696
70,892
2,013
2,751
2,755
5,158
8,323
5,084
6,689
178
3,873
79
137
408
22,685
26,564
52,744
69,796
55,751
71,917
77,989
(3,092
)
(3,335
)
(8,244
)
(10,375
)
(11,171
)
(15,270
)
(15,703
)
(4,008
)
(4,008
)
(5,655
)
(6,826
)
(6,882
)
(6,882
)
(6,624
)
(7
)
(7
)
(5
)
(35
)
(3
)
(4
)
(2
)
(7,107
)
(7,350
)
(13,904
)
(17,236
)
(18,056
)
(22,156
)
(22,329
)
15,578
19,214
38,840
52,560
37,695
49,761
55,660
(799
)
(1,053
)
(1,423
)
(2,222
)
(1,316
)
(1,671
)
(1,476
)
(2,407
)
(2,742
)
(7,319
)
(6,401
)
(5,754
)
(5,722
)
(8,211
)
12,372
15,419
30,098
43,937
30,625
42,368
45,973
(1,006
)
(1,732
)
(2,555
)
(2,162
)
(1,638
)
(1,571
)
(1,671
)
(883
)
1,297
(878
)
(76
)
109
(46
)
(312
)
(663
)
542
(97
)
127
265
266
3
52
61
314
224
423
176
7,734
10,410
15,272
26,945
49,777
28,548
41,762
44,381
(3,062
)
(3,651
)
(5,898
)
(10,724
)
(6,709
)
(8,826
)
(10,199
)
7,348
11,621
21,047
39,053
21,839
32,936
34,182
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For the Three Months Ended
March 31,
June 30,
September 30,
December 31,
March 31,
June 30,
September 30,
2008
2008
2008
2008
2009
2009
2009
91.1
%
89.6
%
94.4
%
87.1
%
84.9
%
92.7
%
90.9
%
8.9
10.4
5.2
7.4
15.1
7.1
8.6
0.4
5.5
0.2
0.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
(13.6
)
(12.6
)
(15.6
)
(14.9
)
(20.0
)
(21.2
)
(20.1
)
(17.7
)
(15.1
)
(10.8
)
(9.7
)
(12.4
)
(9.6
)
(8.5
)
(0.1
)
(31.3
)
(27.7
)
(26.4
)
(24.7
)
(32.4
)
(30.8
)
(28.6
)
68.7
72.3
73.6
75.3
67.6
69.2
71.4
(3.5
)
(4.0
)
(2.7
)
(3.2
)
(2.4
)
(2.3
)
(1.9
)
(10.6
)
(10.3
)
(13.8
)
(9.2
)
(10.3
)
(8.0
)
(10.6
)
54.6
58.0
57.1
62.9
54.9
58.9
58.9
(4.4
)
(6.5
)
(4.8
)
(3.1
)
(2.9
)
(2.2
)
(2.1
)
(3.9
)
4.9
(1.7
)
(0.1
)
(0.3
)
0.4
(0.1
)
(0.4
)
(1.2
)
0.8
(0.1
)
0.5
0.5
0.4
0.2
0.1
0.5
0.4
0.6
0.2
11.1
46.0
57.5
51.1
71.3
51.2
58.1
56.9
(13.5
)
(13.8
)
(11.2
)
(15.3
)
(12.0
)
(12.3
)
(13.1
)
32.5
43.7
39.9
56.0
39.2
45.8
43.8
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Predecessor
Concord Medical (Successor)
Period from
Period from
January 1, 2007
September 10, 2007
to
to
Year Ended December 31,
Nine Months Ended September 30,
October 30, 2007
December 31, 2007
2008
2008
2008
2009
RMB
RMB
RMB
US$
RMB
RMB
US$
(in thousands)
44,593
6,103
46,774
6,852
27,370
104,500
15,308
(50,452
)
(30,441
)
(376,371
)
(55,136
)
(300,692
)
(223,426
)
(32,731
)
6,020
63,225
649,494
95,147
278,407
50,829
7,448
138
(5,698
)
(834
)
(5,949
)
(191
)
(29
)
161
39,025
314,199
46,029
(864
)
(68,288
)
(10,004
)
606
767
39,792
5,829
39,792
353,991
51,858
767
39,792
353,991
51,858
38,928
285,703
41,854
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Contractual Obligations
Less Than
More Than
1 Year
1-3 Year
3-5 Year
5 Years
Total
RMB
RMB
RMB
RMB
RMB
(in thousands)
20,800
20,800
39,840
52,120
91,960
5,084
7,562
6,392
19,038
2,700
2,703
1,144
6,547
115,919
115,919
184,343
62,385
7,536
254,264
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In April 2009, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Codification
(ASC)
805-20,
Accounting for Assets Acquired and Liabilities Assumed in
a Business Combination That Arise from Contingencies to
amend SFAS 141 (revised 2007) Business
Combinations. ASC
805-20
addresses the initial recognition, measurement and subsequent
accounting for assets and liabilities arising from contingencies
in a business combination, and requires that such assets
acquired or liabilities assumed be initially recognized at fair
value at the acquisition date if fair value can be determined
during the measurement period. If the acquisition-date fair
value cannot be determined, the asset acquired or liability
assumed arising from a contingency is recognized only if certain
criteria are met. ASC
805-20
also
requires that a systematic and rational basis for subsequently
measuring and accounting for the assets or liabilities be
developed depending on their nature. The Company does not
anticipate that the adoption of this statement will have a
material impact on its consolidated financial statements, absent
any material business combinations.
In June 2009, the FASB issued SFAS No. 166,
Accounting for Transfers of Financial Assets
an amendment of FASB Statement No. 140
(SFAS 166). SFAS 166 seeks to improve the
relevance, representational faithfulness, and comparability of
the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the
effects of a transfer on its financial position, financial
performance, and cash flows; and a transferors continuing
involvement, if any, in transferred
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financial assets. Specifically, SFAS 166 eliminates the
concept of a qualifying special-purpose entity, creates more
stringent conditions for reporting a transfer of a portion of a
financial asset as a sale, clarifies other sale-accounting
criteria, and changes the initial measurement of a
transferors interest in transferred financial assets. The
Company does not anticipate that the adoption of this statement
will have a material impact on its consolidated financial
statements.
In June 2009, the FASB issued SFAS No. 167,
Amendments to FASB Interpretation No. 46(R)
(SFAS 167). SFAS 167 amends FASB
Interpretation No. 46(R), Variable Interest
Entities for determining whether an entity is a variable
interest entity (VIE) and requires an enterprise to
perform an analysis to determine whether the enterprises
variable interest or interests give it a controlling financial
interest in a VIE. Under SFAS 167, an enterprise has a
controlling financial interest when it has a) the power to
direct the activities of a VIE that most significantly impact
the entitys economic performance and b) the
obligation to absorb losses of the entity or the right to
receive benefits from the entity that could potentially be
significant to the VIE. SFAS 167 also requires an enterprise to
assess whether it has an implicit financial responsibility to
ensure that a VIE operates as designed when determining whether
it has power to direct the activities of the VIE that most
significantly impact the entitys economic performance.
SFAS 167 also requires ongoing assessments of whether an
enterprise is the primary beneficiary of a VIE, requires
enhanced disclosures and eliminates the scope exclusion for
qualifying special-purpose entities. The Company is currently
evaluating the impact the adoption of SFAS 167 will have on
its consolidated financial statements.
In June 2009, the FASB issued Statement of Financial Accounting
Standard (SFAS) No. 168, The FASB Accounting
Standards
Codification
tm
and the Hierarchy of Generally Accepted Accounting Principles, a
replacement of FASB Statement No. 162. This statement
modifies the Generally Accepted Accounting Principles
(GAAP) hierarchy by establishing only two levels of
GAAP, authoritative and nonauthoritative accounting literature.
Effective July 2009, the FASB Accounting Standards
Codification
tm
(ASC), also known collectively as the
Codification, is considered the single source of
authoritative U.S. accounting and reporting standards,
except for additional authoritative rules and interpretive
releases issued by the SEC. Nonauthoritative guidance and
literature would include, among other things, FASB Concepts
Statements, American Institute of Certified Public Accountants
Issue Papers and Technical Practice Aids and accounting
textbooks. The Codification was developed to organize
U.S. GAAP pronouncements by topic so that users can more
easily access authoritative accounting guidance. It is organized
by topic, subtopic, section, and paragraph, each of which is
identified by a numerical designation. This statement applies
beginning in third quarter 2009. All accounting references have
been updated, and therefore U.S. GAAP standards have been
replaced with ASC references. This standard had no impact on the
Companys financial position, results of operations or cash
flows.
In August 2009, the FASB issued Accounting Standards Update
No. 2009-5,
Measuring Liabilities at Fair Value (ASU
2009-05).
ASU
2009-05
amends Accounting Standards Codification Topic 820, Fair
Value Measurements. Specifically, ASU
2009-05
provides clarification that in circumstances in which a quoted
price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value
using one or more of the following methods: 1) a valuation
technique that uses a) the quoted price of the identical
liability when traded as an asset or b) quoted prices for
similar liabilities or similar liabilities when traded as assets
and/or
2) a valuation technique that is consistent with the
principles of Topic 820 of the Accounting Standards Codification
(e.g. an income approach or market approach). ASU
2009-05
also
clarifies that when estimating the fair value of a liability, a
reporting entity is not required to adjust to include inputs
relating to the existence of transfer restrictions on that
liability. The Company does not anticipate that the adoption of
this statement will have a material impact on its consolidated
financial statements.
In September 2009, the Emerging Issues Task Force (EITF) reached
final consensus on ASC
605-25,
Revenue Arrangements with Multiple Deliverables. ASC
605-25
addresses how to determine whether an arrangement involving
multiple deliverables contains more than one unit of accounting,
and how the arrangement consideration should be allocated among
the separate units of accounting.
EITF 08-1
may be applied retrospectively or prospectively for new or
materially modified arrangements and early adoption is
permitted. The Company does not anticipate that the adoption of
this statement will have a material impact on its consolidated
financial statements.
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Increasing cancer incidence rate:
The cancer incidence
rate in China has grown from approximately 0.216% in 2003 to
approximately 0.260% in 2008, an increase of 20.4%, according to
a report by Frost & Sullivan. It is expected that
demographic changes and urbanization will lead to further
increases in the number of cancer cases in China.
Increasing physician adoption of advanced diagnostic imaging
equipment:
With the modernization of medical care in China,
more physicians are expected to utilize more advanced diagnostic
imaging equipment, such as MRI and PET-CT.
Increasing percentage of cancer patients treated with
radiotherapy:
The percentage of cancer patients treated with
radiotherapy is expected to increase due to improving awareness
of radiotherapy among the doctors and patients, and increased
availability of radiotherapy and diagnostic imaging equipment.
Increasing affordability and potentially increased
accessibility:
Chinas rising disposable income and
increasing government expenditure on healthcare are also
expected to stimulate the overall demand for radiotherapy and
diagnostic imaging services. In addition, China recently
approved a new round of healthcare reforms that encourage the
investment of private capital in non-profit hospitals, which may
potentially increase the accessibility of radiotherapy and
diagnostic imaging services to patients.
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98
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F-6
F-22
F-49
F-96
II-2
99
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100
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101
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102
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103
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104
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105
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population density, demographics and the level of economic
development of the regions or cities in which such new centers
would be located; and
the reputation of the potential hospital partner and its
doctors, nurses and other personnel and the number of licensed
patient beds and patient volume.
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As of September 30,
% of Total
2009
Employees
28
18.7
%
37
24.7
62
41.3
11
7.3
7
4.7
5
3.3
150
100.0
%
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111
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286
July 2010
16
November 2009
34
May 2010
195
January 2011
522
November 2012
112
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113
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114
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115
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Urban Employees Basic Medical
Urban Residents Basic Medical
1998
2007
2003
Urban employees
Urban non-employees
Rural residents
Mandatory
Voluntary
Voluntary
in 2008
Approximately 200.0 million (33.0% of Chinas urban
population)
Approximately 118.3 million (19.5% of Chinas urban
population)
Approximately 815 million (91.5% of Chinas rural
population)
amount in 2008
RMB208.4 billion
N/A
RMB66.2 billion
employer contributes approximately 6% of each employees total salary; and
monthly premium are paid by each household; and
individual pays no less than RMB20 per year and local government subsidizes no less than RMB40 per person annually; and
All of the employees contribution and 30% of the employers contribution are allocated to the individuals reimbursement account; the reimbursement cap from the individual account is the balance of that account; and
There is no specific requirement or guidance from the central
government. Reimbursement policy is separately determined by
local governments.
The central government suggests that, beginning in the second
half of 2009, the reimbursement cap for all regions should be no
less than six times the average annual per capita net income of
rural residents in the region.
Shanghai:
reimbursement cap from the social medical
expense pool for an individual participant in a calendar year is
approximately four times the average annual salary in Shanghai
from the previous year.
Inner Mongolia:
reimbursement cap from the social medical
expense pool for an individual participant in a calendar year is
RMB25,000.
Jiangsu Province:
approximately 50% to 60% of medical
expense can be reimbursed by the program.
Sichuan Province:
approximately 60% (and not less than
50%) of medical expense can be reimbursed by the program.
Guangdong Province:
approximately 40% to 60% of medical
expense can be reimbursed by the program; maximum reimbursement
amount is approximately two times the average annual salary in
Guangdong province from the previous year.
Guangdong Province:
maximum reimbursement amount is
approximately RMB50,000 per person per year.
Hubei Province:
maximum reimbursement amount for
hospitalization is approximately RMB30,000 per person per
year.
Anhui Province:
maximum reimbursement amount for
hospitalization is approximately RMB30,000 per person per year.
Sources:
MOH, Ministry of Human Resources and Social Security, National
Bureau of Statistics, and various other central and local PRC
government websites.
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Age
38
Director, chief executive officer and president
45
Co-chairman of the board of directors and chief operating officer
48
Co-chairman of the board of directors and chief financial officer
45
Director and executive president
45
Director and financial controller
44
Director
37
Director
38
Director
58
Director
41
Independent Director
33
Corporate vice president
*
Mr. Denny Lee has accepted our
appointment to be the independent director of our company,
effective upon commencement of the trading of our ADSs on the
NYSE.
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convening shareholders annual general meetings and
reporting its work to shareholders at such meetings;
declaring dividends and distributions;
appointing officers and determining the term of office of
officers;
exercising the borrowing powers of our company and mortgaging
the property of our company; and
approving the transfer of shares of our company, including
registering such shares in our share register.
selecting our independent registered public accounting firm and
pre-approving all auditing and non-auditing services permitted
to be performed by our independent registered public accounting
firm;
reviewing with our independent registered public accounting firm
any audit problems or difficulties and managements
response;
reviewing and approving all proposed related-party transactions,
as defined in Item 404 of
Regulation S-K
under the Securities Act;
discussing the annual audited financial statements with
management and our independent registered public accounting firm;
reviewing major issues as to the adequacy of our internal
controls and any special audit steps adopted in light of
significant control deficiencies;
annually reviewing and reassessing the adequacy of our audit
committee charter;
such other matters that are specifically delegated to our audit
committee by our board of directors from time to time;
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meeting separately and periodically with management and our
internal auditor and independent registered public accounting
firm; and
reporting regularly to the full board of directors.
approving and overseeing the compensation package for our
executive officers;
reviewing and making recommendations to the board with respect
to the compensation of our directors;
reviewing and approving corporate goals and objectives relevant
to the compensation of our chief executive officer, evaluating
the performance of our chief executive officer in light of those
goals and objectives, and setting the compensation level of our
chief executive officer based on such evaluation; and
reviewing periodically and making recommendations to the board
regarding any long-term incentive compensation or equity plans,
programs or similar arrangements, annual bonuses, employee
pension and welfare benefit plans.
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each of our directors and executive officers;
each person known to us to own beneficially more than 5.0% of
our ordinary shares; and
each other selling shareholders.
Ordinary Shares Beneficially
Ordinary Shares Being Sold
Ordinary Shares Beneficially
Owned Prior to This Offering
in This Offering
Owned After This Offering
Number
%
Number
%
Number
%
4,065,800
3.6
7,319,900
6.6
4,065,800
3.6
2,979,900
2.7
*
*
7,533,817
6.8
26,172,700
23.5
10,418,000
9.3
2,889,500
2.6
*
*
66,239,521
59.4
26,172,700
23.5
23,321,300
20.9
10,418,000
9.3
9,215,800
8.3
7,319,900
6.6
7,177,200
6.4
*
Upon exercise of all options
granted, would beneficially own less than 1.0% of our
outstanding ordinary shares.
(1)
Represents 4,065,800 ordinary
shares held by Daketala International Investment Holdings Ltd.,
a limited liability company organized under the laws of the
British Virgin Islands wholly owned by Dr. Yang. 2,910,800
of the ordinary shares held by Daketala International
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Investment Holdings Ltd. have been
pledged to certain of our shareholders in connection with the
issuance of our Series B contingently redeemable
convertible preferred shares on October 20, 2008.
(2)
Represents 7,319,900 ordinary
shares held by CZY Investment Ltd., a limited liability company
organized under the laws of the British Virgin Islands wholly
owned by Mr. Cheng. 6,369,500 of the ordinary shares held
by CZY Investment Ltd. have been pledged to certain of our
shareholders in connection with the issuance of our
Series B contingently redeemable convertible preferred
shares on October 20, 2008. In addition, 2,191,500 of the
ordinary shares held by CZY Investment Ltd. have been pledged to
certain of our shareholders as security for a loan.
(3)
Represents 4,065,800 ordinary
shares held by Dragon Image Investment Ltd., a limited liability
company organized under the laws of the British Virgin Islands
wholly owned by Mr. Sun. 3,193,800 of the ordinary shares
held by Dragon Image Investment Ltd. have been pledged to
certain of our shareholders in connection with the issuance of
our Series B contingently redeemable convertible preferred
shares on October 20, 2008.
(4)
Represents 2,979,900 ordinary
shares held by Thousand Ocean Group Limited, a limited liability
company organized under the laws of the British Virgin Islands
wholly owned by Mr. Zhang. 1,675,000 of the ordinary shares
held by Thousand Ocean Group Limited have been pledged to
certain of our shareholders in connection with the issuance of
our Series B contingently redeemable convertible preferred
shares on October 20, 2008.
(5)
Represents ordinary shares held by
Top Mount Group Limited, a limited liability company organized
under the laws of the British Virgin Islands wholly owned by
Mr. Yap. Certain portion of the ordinary shares held by Top
Mount Group Limited have been pledged to certain of our
shareholders in connection with the issuance of our
Series B contingently redeemable convertible preferred
shares on October 20, 2008.
(6)
Represents 6,616,900 and 323,200
ordinary shares held by CICC Sun Company Limited and Perfect Key
Holdings Limited, respectively, issuable upon conversion of all
Series A and Series B contingently redeemable
convertible preferred shares held by such shareholders and
560,300 and 33,417 ordinary shares, respectively, held by such
shareholders. For a description of the beneficial ownership of
our ordinary shares by CICC Sun Company Limited, see Note 16
below. Ms. Shirley Chen disclaims beneficial ownership of
our ordinary shares held by CICC Sun Company Limited except to
the extent of her pecuniary interest in these shares. Perfect
Key Holdings Limited is a limited liability company organized
under the laws of the British Virgin Islands in which
Ms. Shirley Chen holds 47.4% beneficial ownership.
(7)
Represents 23,085,700 and 920,600
ordinary shares held by Carlyle Asia Growth Partners III, L.P.
and CAGP III Co-Investment, L.P., respectively, issuable upon
conversion of all Series A and Series B contingently
redeemable convertible preferred shares held by such
shareholders and 2,083,300 and 83,100 ordinary shares,
respectively, held by such shareholders. Carlyle Asia Growth
Partners III, L.P. and CAGP III Co-Investment, L.P. are
collectively referred to in this prospectus as the Carlyle
Entities. For a description of the beneficial ownership of our
ordinary shares by the Carlyle Entities, see Note 10 below.
Mr. Feng Xiao disclaims beneficial ownership of our
ordinary shares held by the Carlyle Entities, except to the
extent of his pecuniary interest in these shares.
(8)
Represents 9,722,200 ordinary
shares issuable upon conversion of all Series B contingently
redeemable convertible preferred shares held by Starr
Investments Cayman II, Inc. and 695,800 ordinary shares held by
such shareholder. For a description of the beneficial ownership
of our ordinary shares by Starr Investments Cayman II, Inc., see
Note 12 below. Ms. Elaine Zong disclaims beneficial
ownership of our ordinary shares held by Starr Investments
Cayman II, Inc. except to the extent of her pecuniary interest
in these shares.
(9)
Represents 9,215,800 ordinary
shares held by Grand Best Group Limited, a limited liability
company organized under the laws of the British Virgin Islands.
For a description of the beneficial ownership of our ordinary
shares held by Grand Best Group Limited, see Note 13 below.
Mr. Ku owns 31.4% of the equity interest in Grand Best
Group Limited.
(10)
Represents ordinary shares held by
Triumph Concept Investment Limited, a limited liability company
organized under the laws of the British Virgin Islands wholly
owned by Mr. Zhang.
(11)
Represents 23,085,700 and 920,600
ordinary shares held by Carlyle Asia Growth Partners III, L.P.
and CAGP III Co-Investment, L.P., respectively, issuable upon
conversion of all Series A and Series B contingently
redeemable convertible preferred shares held by such
shareholders and 2,083,300 and 83,100 ordinary shares,
respectively, held by such shareholders. The general partner of
each Carlyle Entity is CAGP General Partner, L.P., which is in
turn managed by its general partner, CAGP Ltd. The directors of
CAGP Ltd. are Mr. William E. Conway, Jr., Mr. Daniel
A. DAniello, Mr. David Rubenstein, Mr. Jeffery
Ferguson and Mr. Curtis L. Buser. The address of the
Carlyle Entities is Walker House, PO Box 908GT, Mary
Street, George Town, Grand Cayman, Cayman Islands.
(12)
Notable Enterprise Limited is a
limited liability company organized under the laws of the
British Virgin Islands wholly owned by Ms. Bona Lau.
Ms. Lau is the daughter of Mr. Haifeng Liu, the
chairman of Aohua Medical from December 2005 to December 2007
and our director until July 2009. Prior to serving as chairman
of Aohua Medical, Mr. Liu was detained in March 2004 by the
authorities of Luoyang city, Henan Province, for alleged
misappropriation of funds while serving as chairman of a company
unrelated to Aohua Medical or us. Mr. Liu was released in
June 2005 by the local prosecutor without an indictment due to
insufficient evidence. Notable Enterprise Limited was originally
owned by Mr. Liu, who irrevocably transferred all of his
interest in Notable Enterprise Limited to Ms. Lau in
November 2007 for consideration not significantly lower than the
then fair market value. At the time of the transfer, Notable
Enterprise Limited indirectly held a 44.2% equity interest in
OMS. The address of Notable Enterprise Limited is
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands. 134,478 of the ordinary
shares held by Notable Enterprise Limited have been pledged to
certain of our shareholders in connection with the issuance of
our Series B contingently redeemable convertible preferred
shares on October 20, 2008.
(13)
Represents 9,722,200 ordinary
shares issuable upon conversion of all Series B contingently
redeemable convertible preferred shares held by Starr
Investments Cayman II, Inc. and 695,800 ordinary shares held by
such shareholder. Starr Investments Cayman II, Inc. is
ultimately controlled by Starr International Company, Inc. whose
voting shareholders (none of whom control 10% or more
individually) are Mr. Maurice R. Greenberg, Mr. Edward
E. Matthews, Mr. Howard I. Smith, Mr. John J. Roberts,
Mr. Houghton Freeman, Mr. Joseph C. H. Johnson,
Mr. Cesar Zalamea, Mr. Peter Hammer, Mr. Michael
Morrison, Mr. Bertil P. Lundqvist and Ms. Florence
Davis. The address of Starr Investments Cayman II, Inc. is
Avalon Management Limited, Landmark Square, 64 Earth Close, West
Bay Beach, Grand Cayman, KY1-1107, Cayman Islands
(14)
Grand Best Group Limited is a
limited liability company organized under the laws of the
British Virgin Islands. The shareholders of Grand Best Group
Limited are Ku Wai Hong, Ever Bounteous Group Limited, Iu Kong,
Cheng Mai Yue, Wang Rong Kang, Brave Faith
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Development Limited, Echolac
Company Limited and Huang Pei Lin. The address of Grand Best
Group Limited is Portcullis TrustNet Chambers, P.O.
Box 3444, Road Town, Tortola, British Virgin Islands.
(15)
CZY Investments Limited is a
limited liability company organized under the laws of the
British Virgin Islands wholly owned by Dr. Zheng Cheng. The
address of CZY Investments Limited is P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British
Virgin Islands.
(16)
Represents 6,616,900 ordinary
shares issuable upon conversion of all Series A and
Series B contingently redeemable convertible preferred
shares held by CICC Sun Company Limited and 560,300 ordinary
shares held by such shareholder. CICC Sun Company Limited is
wholly owned by China International Capital Corporation Limited,
one of our underwriters, in which Morgan Stanley, another
underwriter to this offering, beneficially owns 34.0% of its
equity interest. China International Capital Corporation Limited
has ultimate investment and voting power over the shares held by
CICC Sun Company Limited. The address of CICC Sun Company
Limited is 2/F., Abbott Building, Road Town, Tortola, British
Virgin Islands.
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the instrument of transfer is lodged with us, accompanied by the
certificate for the ordinary shares to which it relates and such
other evidence as our board of directors may reasonably require
to show the right of the transferor to make the transfer;
the instrument of transfer is in respect of only one class of
ordinary shares;
the instrument of transfer is properly stamped, if required;
in the case of a transfer to joint holders, the number of joint
holders to whom the ordinary share is to be transferred does not
exceed four; or
the ordinary shares transferred are free of any lien in favor of
us.
issue ordinary shares on terms that they are to be redeemed or
are liable to be redeemed at our option or at the option of the
shareholders, on such terms and in such manner as we may, before
the issue of such ordinary shares, determine;
purchase our own ordinary shares (including any redeemable
shares) on such terms and in such manner as we may determine and
agree with our shareholders; and
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make a payment in respect of the redemption or purchase of our
own ordinary shares in any manner authorized by the Companies
Law, including out of our capital, profits or the proceeds of a
fresh issue of ordinary shares.
increase the share capital by such sum, to be divided into
shares of such classes and amount, as the resolution shall
prescribe;
consolidate and divide all or any of our share capital into
shares of a larger amount than our existing shares;
convert all or any of our paid up shares into stock and
reconvert that stock into paid up shares of any denomination;
sub-divide our existing shares, or any of them into shares of a
smaller amount that is fixed by the third amended and restated
memorandum and articles of association; and
cancel any shares that, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any
person and diminish the amount of our share capital by the
amount of the shares so cancelled.
the designation of the series;
the number of shares of the series;
the dividend rights, dividend rates, conversion rights, voting
rights; and
the rights and terms of redemption and liquidation preferences.
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the appointment or removal of either our chief executive officer
or chief financial officer;
any anti-takeover action in response to a takeover attempt;
any merger resulting in our shareholders immediately prior to
such merger holding less than a majority of the voting power of
the outstanding share capital of the surviving business entity;
the sale or transfer of all or substantially all of our assets;
and
any change in the number of directors on our board of directors.
an exempted company does not have to file an annual return of
its shareholders with the Registrar of Companies;
an exempted companys register of members is not open to
inspection;
an exempted company does not have to hold an annual general
meeting;
an exempted company may issue negotiable or bearer shares or
shares with no par value;
an exempted company may obtain an undertaking against the
imposition of any future taxation (such undertakings are usually
given for 20 years in the first instance);
an exempted company may register by way of continuation in
another jurisdiction and be deregistered in the Cayman Islands;
an exempted company may register as a limited duration company;
and
an exempted company may register as a segregated portfolio
company.
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the statutory provisions as to the dual majority vote have been
met;
the shareholders have been fairly represented at the meeting in
question;
the arrangement is such that a businessman would reasonably
approve; and
the arrangement is not one that would more properly be
sanctioned under some other provision of the Companies Law.
a company acts or proposes to act illegally or ultra vires;
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the act complained of, although not ultra vires, could be duly
effected if authorized by a special or ordinary resolution that
has not been obtained; and
those who control the company are perpetrating a fraud on
the minority.
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sell such rights if practicable and distribute the net proceeds
in the same manner as cash to the ADR holders entitled
thereto; or
if it is not practicable to sell such rights, do nothing and
allow such rights to lapse, in which case ADR holders will
receive nothing.
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temporary delays caused by closing our transfer books or those
of the depositary or the deposit of shares in connection with
voting at a shareholders meeting, or the payment of
dividends;
the payment of fees, taxes and similar charges; or
compliance with any U.S. or foreign laws or governmental
regulations relating to the ADRs or to the withdrawal of
deposited securities.
to receive any distribution on or in respect of shares,
to give instructions for the exercise of voting rights at a
meeting of holders of shares, or
to pay the fee assessed by the depositary for administration of
the ADR program and for any expenses as provided for in the ADR,
to receive any notice or to act in respect of other matters all
subject to the provisions of the deposit agreement.
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a fee of up to US$1.50 per ADR or ADRs for transfers of
certificated or direct registration ADRs;
a fee of up to US$0.05 per ADS for any cash distribution made
pursuant to the deposit agreement;
a fee of up to US$0.05 per ADS per calendar year (or portion
thereof) for services performed by the depositary in
administering the ADRs (which fee may be charged on a periodic
basis during each calendar year and shall be assessed against
holders of ADRs as of the record date or record dates set by the
depositary during each calendar year and shall be payable in the
manner described in the next succeeding provision);
reimbursement of such fees, charges and expenses as are incurred
by the depositary
and/or
any
of the depositarys agents (including, without limitation,
the custodian and expenses incurred on behalf of holders in
connection with compliance with foreign exchange control
regulations or any law or regulation relating to foreign
investment) in connection with the servicing of the shares or
other deposited securities, the delivery of deposited securities
or otherwise in connection with the depositarys or its
custodians compliance with applicable law, rule or
regulation (which charge shall be assessed on a proportionate
basis against holders as of the record date or dates set by the
depositary and shall be payable at the sole discretion of the
depositary by billing such holders or by deducting such charge
from one or more cash dividends or other cash distributions);
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a fee for the distribution of securities (or the sale of
securities in connection with a distribution), such fee being in
an amount equal to the fee for the execution and delivery of
ADSs which would have been charged as a result of the deposit of
such securities (treating all such securities as if they were
shares) but which securities or the net cash proceeds from the
sale thereof are instead distributed by the depositary to those
holders entitled thereto;
stock transfer or other taxes and other governmental charges;
cable, telex and facsimile transmission and delivery charges
incurred at your request in connection with the deposit or
delivery of shares;
transfer or registration fees for the registration of transfer
of deposited securities on any applicable register in connection
with the deposit or withdrawal of deposited securities; and
expenses of the depositary in connection with the conversion of
foreign currency into U.S. dollars.
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payment with respect thereto of (i) any stock transfer or
other tax or other governmental charge, (ii) any stock
transfer or registration fees in effect for the registration of
transfers of shares or other deposited securities upon any
applicable register and (iii) any applicable fees and
expenses described in the deposit agreement;
the production of proof satisfactory to it of (i) the
identity of any signatory and genuineness of any signature and
(ii) such other information, including without limitation,
information as to citizenship, residence, exchange control
approval, beneficial ownership of any securities, compliance
with applicable law, regulations, provisions of or governing
deposited securities and terms of the deposit agreement and the
ADRs, as it may deem necessary or proper; and
compliance with such regulations as the depositary may establish
consistent with the deposit agreement.
any present or future law, rule, regulation, fiat, order or
decree of the United States, the Cayman Islands, The
Peoples Republic of China (including the Hong Kong Special
Administrative Region, the Peoples Republic of China) or
any other country, or of any governmental or regulatory
authority or securities exchange or market or automated
quotation system, the provisions of or governing any deposited
securities, any present or future provision of our charter, any
act of God, war, terrorism or other circumstance beyond our, the
depositarys or our respective agents control shall
prevent, delay or subject to any civil or criminal penalty any
act which the deposit agreement or the ADRs provide shall be
done or performed by us, the depositary or our respective agents
(including, without limitation, voting);
it exercises or fails to exercise discretion under the deposit
agreement or the ADR;
it performs its obligations under the deposit agreement and ADRs
without gross negligence or bad faith;
it takes any action or refrains from taking any action in
reliance upon the advice of or information from legal counsel,
accountants, any person presenting shares for deposit, any
registered holder of ADRs, or any other person believed by it to
be competent to give such advice or information; or
it relies upon any written notice, request, direction or other
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
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be a party to and bound by the terms of the deposit agreement
and the applicable ADR or ADRs, and
appoint the depositary its attorney-in-fact, with full power to
delegate, to act on its behalf and to take any and all actions
contemplated in the deposit agreement and the applicable ADR or
ADRs, to adopt any and all procedures necessary to comply with
applicable laws and to take such action as the depositary in its
sole discretion may deem necessary or appropriate to carry out
the purposes of the deposit agreement and the applicable ADR and
ADRs, the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof.
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1.0% of the number of our ordinary shares then outstanding, in
the form of ADSs or otherwise, which will equal
approximately shares
immediately after this offering,
or shares
if the underwriters exercise their option to purchase additional
ADSs in full; and
the average weekly trading volume of our ADSs on
the
during the four calendar weeks preceding the date on which
notice of the sale is filed with the SEC.
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an individual citizen or resident of the United States;
a corporation (or other entity treated as a corporation for
United States federal income tax purposes) created or organized
in or under the laws of the United States, any state thereof or
the District of Columbia;
an estate the income of which is subject to United States
federal income taxation regardless of its source; or
a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more United States
persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a
United States person.
a dealer in securities or currencies;
a financial institution;
a regulated investment company;
a real estate investment trust;
an insurance company;
a tax exempt organization;
a person holding our ordinary shares or ADSs as part of a
hedging, integrated or conversion transaction, a constructive
sale or a straddle;
a trader in securities that has elected the mark-to-market
method of accounting for your securities;
a person liable for alternative minimum tax;
a person who owns or is deemed to own more than 10% of our
voting stock;
a partnership or other pass-through entity for United States
federal income tax purposes; or
a person whose functional currency is not the United
States dollar.
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at least 75% of our gross income is passive income; or
at least 50% of the value of our assets (based on an average of
the quarterly values) is attributable to assets that produce or
are held for the production of passive income.
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the excess distribution or gain will be allocated ratably over
your holding period for the ADSs or ordinary shares;
the amount allocated to the current taxable year, and any
taxable year prior to the first taxable year in which we were a
PFIC, will be treated as ordinary income; and
the amount allocated to each other year will be subject to tax
at the highest tax rate in effect for that year and the interest
charge generally applicable to underpayments of tax will be
imposed on the resulting tax attributable to each such year.
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Number of
ADSs
US$
US$
US$
US$
US$
US$
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offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any
ordinary shares or ADSs or any securities convertible into or
exercisable or exchangeable for ordinary shares or ADSs;
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the ordinary shares or ADSs; or
file any registration statement with the SEC relating to the
offering of any ordinary shares, ADSs or any securities
convertible into or exercisable or exchangeable for ordinary
shares or ADSs (other than a registration statement on
Form S-8).
ADSs to be sold by us to the underwriters in the offering;
transactions by the selling shareholders relating to ordinary
shares, ADSs or other securities acquired in open market
transactions after the completion of the offering, provided that
no filing under Section 16(a) of the Exchange Act shall be
required or shall be voluntarily made in connection with
subsequent sales of ordinary shares, ADSs or other securities
acquired in such open market transactions;
the issuance by us of ordinary shares issuable upon the exercise
of an option or warrant or the conversion of any outstanding
securities, provided that such recipients shall agree in writing
to be subject to the restrictions described above; or
the grant or issuance by us of options, shares, restricted
shares, restricted share units, share appreciation rights,
performance units or performance shares under our equity plans
and the shares or other securities issued upon exercise or
conversion of any of the foregoing, provided that such
recipients shall agree in writing to be subject to the
restrictions described above.
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any
ordinary shares or ADSs or any securities convertible into or
exercisable or exchangeable for ordinary shares or ADSs; or
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the ordinary shares or ADSs.
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the ordinary shares as represented by the ADSs to be sold in
this offering;
transactions relating to ordinary shares, ADSs or other
securities acquired in open market transactions after the
completion of the offering, provided that no filing under
Section 16(a) of the Exchange Act will be required or will
be voluntarily made in connection with subsequent sales of
ordinary shares, ADSs or other securities acquired in such open
market transactions;
the exercise of rights to acquire ordinary shares, ADSs or other
securities of our company issued pursuant to any of our share
option or similar equity incentive or compensation plan for the
issuance of share options or equity grants, provided that, in
each case, such plan is in effect as of the date of and
disclosed in the prospectus, and that any subsequent sale,
transfer or disposition of any securities issued upon exercise
of such equity incentive grants should be subject to the
restrictions described above;
transfers of our ordinary shares or ADSs to shareholders who are
our existing shareholders prior to the offering or partners,
members, stockholders or affiliates (as defined in
Rule 12b-2
of the Exchange Act) of such existing shareholders, provided
that each transferee should agree in writing to be subject to
the restrictions described above, and that no filing under
Section 16(a) of the Exchange Act reporting a reduction in
beneficial ownership of ordinary shares or ADSs will be required
or will be voluntarily made during the applicable
lock-up
period;
transfers of our ordinary shares, ADSs or any security
convertible into our ordinary shares or ADSs (i) to an
immediate family member or a trust formed for the benefit of an
immediate family member, (ii) as a bona fide gift or
(iii) through will or intestacy, provided that each
transferee or donee should agree in writing to be subject to the
restrictions described above, and that no filing under
Section 16(a) of the Exchange Act reporting a reduction in
beneficial ownership of our ordinary shares or ADSs will be
required or will be voluntarily made during the applicable
lock-up
period;
transfers or distributions of our ordinary shares, ADSs or any
security convertible into our ordinary shares or ADSs to
partners, members, stockholders or affiliates, provided that
each transferee or distributee should agree in writing to be
subject to the restrictions described above, and that no filing
under Section 16(a) of the Exchange Act reporting a
reduction in beneficial ownership of our ordinary shares or ADSs
should be required or should be voluntarily made during the
applicable
lock-up
period; or
the establishment of a trading plan pursuant to
Rule 10b5-1
under the Exchange Act for the sale of our ordinary shares or
ADSs, provided that such plan does not provide for the transfer
of our ordinary shares or ADSs during the applicable
lock-up
period.
162
Table of Contents
163
Table of Contents
(a)
to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
(b)
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
(c)
to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive; or
(d)
in any other circumstances which do not require the publication
by the company of a prospectus pursuant to Article 3 of the
Prospectus Directive;
164
Table of Contents
(a)
a corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or
(b)
a trust (where the trustee is not an accredited investor) whose
sole purpose is to hold investments and each beneficiary is an
accredited investor,
(1)
to an institutional investor (for corporations, under 274 of the
SFA) or to a relevant person defined in Section 275(2) of
the SFA, or to any person pursuant to an offer that is made on
terms that such shares, debentures and units of shares and
debentures of that corporation or such rights and interest in
that trust are acquired at a consideration of not less than
S$200,000 (or its equivalent in a foreign currency) for each
transaction, whether such amount is to be paid for in cash or by
exchange of securities or other assets, and further for
corporations, in accordance with the conditions specified in
Section 275 of the SFA;
(2)
where no consideration is or will be given for the
transfer; or
(3)
where the transfer is by operation of law.
165
Table of Contents
US$
5,580
10,500
US$
166
Table of Contents
167
Table of Contents
168
Table of Contents
Page
F-2
F-3
F-5
F-5
F-7
F-7
F-9
F-9
F-10
F-52
F-54
F-56
F-58
F-59
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
As at December 31,
Pro Forma as at December 31,
Note
2007
2008
2008
2008
2008
(successor)
(successor)
RMB
RMB
US$
RMB
US$
(unaudited)
(Note 2)
10
52,120
7,636
5,524
6,314
925
12
1,631
11,656
1,707
3,215
471
17
15,765
20,078
2,941
13
36,853
148,145
283,916
41,592
22
14
254,358
37,262
14
411,101
60,224
15
41
55
8
83
12
443,016
1,113,150
163,070
1,778,581
260,552
147
(3,822
)
(560
)
(3,822
)
(560
)
(48,326
)
(544,363
)
(79,746
)
(544,363
)
(79,746
)
394,878
565,020
82,772
1,230,479
180,258
543,023
1,514,395
221,850
F-4
Table of Contents
January 1, 2007
September 10, 2007
to
to
Notes
October 30, 2007
December 31, 2007
For the Year Ended December 31, 2008
(Successor)
(Predecessor)
(Successor)
RMB
RMB
RMB
US$
63,082
13,001
155,061
22,716
4,340
982
12,677
1,857
4,051
593
67,422
13,983
171,789
25,166
(20,396
)
(1,908
)
(25,046
)
(3,669
)
(2,002
)
(20,497
)
(3,003
)
(20
)
(4
)
(54
)
(8
)
(20,416
)
(3,914
)
(45,597
)
(6,680
)
47,006
10,069
126,192
18,486
(1,601
)
(757
)
(5,497
)
(805
)
(8,467
)
(57,171
)
(18,869
)
(2,764
)
36,938
(47,859
)
101,826
14,917
20
(954
)
(279
)
(7,455
)
(1,092
)
13
(341
)
(464
)
(68
)
(4
)
(325
)
(48
)
(1,555
)
(25
)
658
96
15
430
63
18
7,734
1,133
34,444
(48,508
)
102,404
15,001
17
(15,014
)
182
(23,335
)
(3,418
)
19,430
(48,326
)
79,069
11,583
F-5
Table of Contents
January 1, 2007
September 10, 2007
to
to
Notes
October 30, 2007
December 31, 2007
For the Year Ended December 31, 2008
(Successor)
(Predecessor)
(Successor)
RMB
RMB
RMB
US$
14
(270,343
)
(39,604
)
14
(304,763
)
(44,646
)
19,430
(48,326
)
(496,037
)
(72,667
)
24
0.39
(0.97
)
(8.63
)
(1.26
)
24
50,000,000
50,000,000
57,481,400
57,481,400
24
(4.87
)
(0.71
)
24
98,508,800
98,508,800
Table of Contents
January 1, 2007 to
September 10, 2007 to
For the Year Ended
October 30, 2007
December 31, 2007
December 31, 2008
(successor)
(predecessor)
(successor)
RMB
RMB
RMB
US$
19,430
(48,326
)
79,069
11,583
49,526
4,215
617
8
96
2,991
438
17,906
1,084
17,629
2,583
2,002
20,497
3,003
1,555
25
(658
)
(96
)
9,472
(1,608
)
(5,080
)
(744
)
341
464
68
895
131
(5,416
)
(2,771
)
(19,283
)
(2,825
)
(4,782
)
2,723
(23,043
)
(3,376
)
(280
)
(621
)
(91
)
(20,221
)
(2,962
)
4,095
2,049
(13,709
)
(2,008
)
(1,666
)
(244
)
30
4
2,605
962
5,265
771
44,593
6,103
46,774
6,852
(20,821
)
(3,050
)
(231,481
)
(33,911
)
(43,398
)
(22,466
)
(31,575
)
(4,625
)
(13,031
)
(13,573
)
(95,110
)
(13,933
)
5,977
5,598
2,616
383
(50,452
)
(30,441
)
(376,371
)
(55,136
)
F-7
Table of Contents
January 1, 2007 to
September 10, 2007 to
For the Year Ended
October 30, 2007
December 31, 2007
December 31, 2008
(successor)
(predecessor)
(successor)
RMB
RMB
RMB
US$
36,523
140,241
20,545
67,671
9,913
405,331
59,379
20,800
3,047
7,460
1,093
(786
)
(5,698
)
(5,525
)
(809
)
(37,890
)
(5,551
)
(21,500
)
(3,150
)
114,606
16,789
6,806
32,400
(41,700
)
(6,109
)
6,020
63,225
649,494
95,147
138
(5,698
)
(834
)
161
39,025
314,199
46,029
606
767
39,792
5,829
767
39,792
353,991
51,858
(737
)
(11,688
)
(1,712
)
(946
)
(184
)
(3,538
)
(518
)
1,961
50,601
7,413
14,520
2,127
176,082
25,795
F-8
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares)
Accumulated
Retained
Number of
Additional
Other
Earnings
Total
Ordinary
Ordinary
Paid-in
Comprehensive
(Cumulative
Shareholders
Shares
Shares
Capital
Income(loss)
Deficit)
Equity
RMB
RMB
RMB
RMB
RMB
50,000,000
41
45,779
88,444
134,264
19,430
19,430
8
8
50,000,000
41
45,787
107,874
153,702
347,607
(107,874
)
239,733
(48,326
)
(48,326
)
147
147
(48,179
)
96
96
49,526
49,526
50,000,000
41
443,016
147
(48,326
)
394,878
79,069
79,069
(3,969
)
(3,969
)
75,100
2,991
2,991
21,184,600
15
114,591
114,606
(756,500
)
(1
)
1
4,215
4,215
253,317
253,317
295,019
295,019
(270,343
)
(270,343
)
(304,763
)
(304,763
)
70,428,100
55
1,113,150
(3,822
)
(544,363
)
565,020
8
163,070
(560
)
(79,746
)
82,772
F-9
Table of Contents
1.
ORGANIZATION
AND BASIS OF PRESENTATION
Percentage of
Date of
Place of
Ownership by the
Establishment
Establishment
Company
September 10, 2007
BVI
100
%
Investment Holding
August 22, 1996
BVI
100
%
Investment Holding
August 8, 2003
Singapore
100
%
Investment Holding
May 26, 2006
Hong Kong
100
%
Investment Holding
July 18, 2008
Hong Kong
100
%
Investment Holding
July 23, 1997
PRC
100
%
Leasing of medical equipment and
provision of management services
February 21, 2008
PRC
100
%
Leasing of medical equipment and
provision of management services
March 21, 2003
PRC
100
%
Leasing and sales of medical
equipment, provision of
management services
July 23, 2008
PRC
100
%
Provision of management services
July 26, 2007
PRC
100
%
Provision of management services
F-10
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
RMB
US$
259,282
37,983
37,253
5,458
53,786
7,879
132,000
19,337
13,753
2,015
41,199
6,035
(58,792
)
(8,612
)
7,538
1,104
(92,584
)
(13,563
)
393,435
57,636
F-11
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
F-12
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
Estimated residual
value
Shorter of customer contract or 6-20 years
5 years
5-10
%
5 years
5-10
%
shorter of lease term or 5 years
*
The cost of the asset is amortized
over the lease term. However, if ownership is transferred at the
end of the lease term, the cost of the asset is amortized over
the shorter of customer contract or the useful life of the asset
which ranges from 6-20 years.
F-13
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-14
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-15
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-16
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-17
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-18
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
3.
CONCENTRATION
OF RISKS
F-19
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-20
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
4.
ACQUISITIONS
RMB
US$
21,210
3,107
77,053
11,287
9,397
1,377
217,965
31,931
52,380
7,673
83,505
12,233
23,089
3,382
(12,529
)
(1,835
)
(233,323
)
(34,180
)
238,747
34,975
F-21
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
September 10, 2007
to December 31,
For the Year Ended December 31,
2007
2008
(successor)
(successor)
RMB
RMB
US$
25,392
234,662
34,377
(45,638
)
106,626
15,620
(45,610
)
(603,628
)
(88,428
)
(0.91
)
(10.50
)
(1.54
)
RMB
US$
10,906
1,598
12,680
1,857
15,288
2,239
18,000
2,637
(21,895
)
(3,207
)
34,979
5,124
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
5.
ACCOUNTS
RECEIVABLE
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
22,818
96,602
14,152
(3,808
)
(3,830
)
(561
)
19,010
92,772
13,591
2,528
3,808
558
1,280
22
3
3,808
3,830
561
6.
PREPAYMENT
AND OTHER CURRENT ASSETS
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
15,000
2,197
9,953
1,458
2,217
2,568
376
7,005
1,026
3,915
9,040
1,325
6,132
43,566
6,382
*
The amount represents an
interest-free cash deposit paid to a customer hospital pursuant
to the management service contract to which the deposit is
repayable at the termination of the service contract (see
note 25.)
**
The amount represents interest-free
non-refundable partial payments to suppliers associated with
contracts the Group enters into for the future scheduled
delivery of medical equipment for sales. The remaining
contractual obligations associated with these purchase contracts
are approximately RMB4,200 (US$615) which is included in the
amount disclosed as Purchase Commitments at note 22. The
risk of loss arising from non-performance by or bankruptcy of
the suppliers is assessed prior to ordering the equipment. To
date, the Group has not experienced any loss on advances to
suppliers.
F-23
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
7.
PROPERTY,
PLANT AND EQUIPMENT, NET
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
54,225
299,100
43,816
1,186
1,895
278
178
178
26
113
1,182
173
65,029
9,526
55,702
367,384
53,819
(999
)
(18,263
)
(2,675
)
54,703
349,121
51,144
8.
OTHER
INTANGIBLE ASSETS AND GOODWILL
September 10,
2007
January 1, 2007 to
to December 31,
For the Year Ended December 31,
October 30,
2007
2008
(predecessor)
(successor)
(successor)
(successor)
RMB
RMB
RMB
US$
259,282
37,983
259,282
21,209
3,107
10,906
1,598
8,766
1,284
259,282
300,163
43,972
F-24
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
122,000
122,000
17,872
10,000
10,000
1,465
67,259
9,853
5,078
744
(2,002
)
(22,499
)
(3,296
)
129,998
181,838
26,638
Amortization
RMB
US$
26,493
3,881
26,815
3,928
23,142
3,390
23,142
3,390
18,862
2,763
118,454
17,352
9.
DEPOSITS
FOR NON-CURRENT ASSETS
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
9,461
128,749
18,861
15,904
17,630
2,583
20,821
3,050
25,365
167,200
24,494
*
Represents interest-free
non-refundable partial payments to suppliers associated with
contracts the Company enters into for the future scheduled
delivery of medical equipment to customers. The remaining
contractual obligations associated with these purchase contracts
are approximately RMB50,220 (US$7,357) which is included in the
amount disclosed as Purchase Commitments in Note 22. The
risk of loss arising from non-performance by or bankruptcy of
the suppliers is assessed prior to ordering the equipment. To
date, the Group has not experienced any loss on deposit to
suppliers.
F-25
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
**
On October 31, 2007, the Group
entered into a long-term sale and purchase agreement with Our
Medical, under which the Group agreed to purchase gamma knife
systems at agreed upon prices and Our Medical also agreed to
provide the Group relevant maintenance and repair services and
training. Our Medical is controlled by an individual who was a
director of the Group until July 2009.
***
The Group has entered into two
distinct framework agreements with Changan Hospital Co.
Ltd. (Changan) towards the development and
construction of the following two medical facilities:
On December 18, 2007, the Group entered into a framework
agreement to build a proton treatment center in Beijing,
pursuant to which the Group paid deposits to a subsidiary of
Changan Information Industry (Group) Co., Ltd.,
(Changan Information) to be used towards the
construction of the proton treatment center (Beijing
Proton Medical Center). Total deposits paid as of
December 31, 2008 pursuant to this arrangement amounted to
RMB3,821 (US$560).
On July 1, 2008, the Group entered into a framework
agreement with Changan to build a cancer center in
northwest China, the Changan CMS International Cancer
Center (CCICC) pursuant to which the Group paid
security deposits to Changan totaling RMB17,000
(US$2,490), which were been recorded as a non-current deposit as
of December 31, 2008. (See note 25.)
10.
BANK
BORROWINGS
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
112,760
16,519
20,800
3,047
39,840
5,836
60,640
8,883
52,120
7,636
112,760
16,519
F-26
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
11.
ACCRUED
EXPENSES AND OTHER LIABILITIES
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
3,013
3,772
553
2,152
2,650
388
4,879
9,339
1,368
4,993
20,509
3,004
6,942
6,174
905
21,979
42,444
6,218
12.
OBLIGATIONS
UNDER CAPITAL LEASES
Minimum Lease Payments
RMB
US$
5,084
745
3,781
554
3,781
554
3,781
554
2,611
382
19,038
2,789
(3,663
)
(537
)
15,375
2,252
(3,719
)
(545
)
11,656
1,707
F-27
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
13.
CONVERTIBLE
NOTES
F-28
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
14.
CONTINGENTLY
REDEEMABLE CONVERTIBLE PREFERRED SHARES
F-29
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-30
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-31
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
Series A
Series B
Total
RMB
RMB
RMB
176,082
176,082
70,120
70,120
(2,964
)
(2,964
)
411,021
411,021
(5,677
)
(5,677
)
895
895
(253,317
)
(295,019
)
(548,336
)
253,317
295,019
548,336
6,801
3,987
10,788
10,225
5,757
15,982
261,159
415,088
676,247
254,358
411,101
665,459
37,262
60,224
97,486
6,801
3,987
10,788
996
584
1,580
15.
SHAREHOLDERS
EQUITY
F-32
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
16.
RESTRICTED
NET ASSETS
17.
TAXATION
F-33
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
January 1, 2007 to
September 10, 2007
For the Year Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
RMB
RMB
US$
(54,205
)
(6,335
)
(928
)
34,444
5,697
108,739
15,929
34,444
(48,508
)
102,404
15,001
F-34
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
January 1, 2007 to
September 10, 2007
For the Year Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
RMB
RMB
US$
5,542
1,426
28,395
4,159
9,472
(1,608
)
(5,060
)
(741
)
15,014
(182
)
23,335
3,418
January 1, 2007 to
September 10, 2007
For the Year Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
RMB
RMB
US$
34,444
(48,508
)
102,404
15,001
11,367
(16,007
)
25,601
3,750
17,887
1,548
227
234
57
1,181
173
(6,328
)
(1,057
)
(8,684
)
(1,272
)
8,929
(1,248
)
(378
)
(55
)
812
186
4,067
595
15,014
(182
)
23,335
3,418
January 1, 2007 to
September 10, 2007
For the Years Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
(successor)
RMB
RMB
RMB
US$
1,552
2,941
3,218
471
1,389
277
7,393
1,083
2,294
336
2,941
3,218
12,905
1,890
F-35
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
January 1, 2007 to
September 10, 2007
For the Years Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
(successor)
RMB
RMB
RMB
US$
(amounts in thousands except for the per share data)
5,676
1,488
8,684
1,272
0.11
0.03
0.15
0.02
0.11
0.03
0.15
0.02
F-36
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB(000)
RMB(000)
US$(000)
516
300
44
685
994
146
2,595
380
1,201
3,889
570
(1,240
)
(182
)
1,201
2,649
388
3,765
552
36,520
54,044
7,917
1,105
1,841
270
530
595
87
38,155
60,245
8,826
(1,240
)
(1,523
)
(223
)
(29,945
)
(44,750
)
(6,556
)
(22,735
)
(21,400
)
(3,135
)
(53,920
)
(67,673
)
(9,914
)
12,650
1,853
(15,765
)
(20,078
)
(2,941
)
*
As at December 31, 2007 and
2008, deferred tax assets, current portion of approximately nil
and RMB1,240 (US$182) have been offset against deferred tax
liabilities, current portion relating to a particular tax-paying
component of an enterprise and within a particular tax
jurisdiction, respectively.
**
As at December 31, 2007 and
2008, deferred tax assets, non-current portion of approximately
RMB38,155 and RMB47,595 (US$6,972) have been offset against
deferred tax liabilities, non-current portion relating to a
particular tax-paying component of an enterprise and within a
particular tax jurisdiction, respectively.
F-37
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
18.
Other
Income
19.
Employee
Share Options
F-38
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
November 17,
August 18,
August 18,
2007
2008
2008
(Successor)
(Successor)
(Successor)
OMS Options
OMS Options
Concord Options
4.17
%
2.94
%
2.94
%
38.34
%
39.53
%
39.53
%
1.5 times
1.5 times
1.5 times
F-39
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
Weighted
Average
Remaining
Share Options Granted to
Number of
Weighted-Average
Weighted-Average
Contractual
Aggregate Intrinsic
Shares
Exercise Price
Grant-date Fair Value
Term (Years)
Value
25,000,000
US$
0.80
US$
0.26
1.09
25,000,000
US$
0.80
US$
0.26
1
(25,000,000
)
US$
0.80
US$
0.26
0.39
21,184,600
US$
0.79
US$
0.25
0.38
(21,184,600
)
US$
0.79
US$
0.25
0.38
US$
10,793
F-40
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
20.
RELATED
PARTY TRANSACTIONS
A relative of a shareholder of the Company
Director and shareholder of the Company
Director and shareholder of the Company
Director and shareholder of the Company
A company owned by Mr. Haifeng Liu
A company under the control of Mr. Zheng Cheng
A company under the control of Mr. Haifeng Liu
January 1, 2007 to
September 10, 2007
For the Year Ended
October 30, 2007
to December 31,
2007
December 31,
2008
(predecessor)
(successor)
(successor)
(successor)
RMB
RMB
RMB
US$
38,700
4,000
1,000
4,000
586
38,700
5,669
2,000
293
5,000
732
11,521
706
1,726
253
F-41
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
As at December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
38,700
196
29
4,000
2,000
293
1,000
1,351
198
60
9
43,700
3,607
529
15,904
17,630
2,583
21.
EMPLOYEE
DEFINED CONTRIBUTION PLAN
F-42
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
22.
COMMITMENTS
AND CONTINGENCIES
RMB
US$
2,700
396
1,512
221
1,191
174
1,144
168
6,547
959
23.
SEGMENT
REPORTING
F-43
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
24.
INCOME
(LOSS) PER SHARE
January 1, 2007 to
September 10, 2007
October 30, 2007
to December 31,
2007
For the Year Ended
December 31,
(predecessor)
(successor)
(successor)
(successor)
RMB
RMB
RMB
US$
(amounts in thousands except for the number of shares and per
share data)
19,430
(48,326
)
(496,037
)
(72,667
)
50,000,000
50,000,000
57,481,400
57,481,400
0.39
(0.97
)
(8.63
)
(1.26
)
F-44
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
25.
ARRANGEMENT
WITH CHANGAN HOSPITAL CO., LTD.
F-45
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-46
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
For The Year Ended December 31,
2007
2008
2008
RMB
RMB
US$
4,500
8,000
1,172
2,000
293
4,500
10,000
1,465
4,000
4,000
586
As at December 31,
2007
2008
2008
RMB
RMB
US$
15,000
2,197
20,821
3,050
35,821
5,247
26.
SUBSEQUENT
EVENTS
F-47
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
To distribute an interim dividend to the holders of the ordinary
shares as at November 17, 2009 in the sum of
(i) US$2,391,534 to the holders of the ordinary shares; and
(ii) US$1,590,676 to the holders of the Series A and B
Preferred Shares, such dividend to be payable in cash on or
about November 27, 2009.
Amended the Articles of Association to reflect a 100-for-one
stock split of the Companys ordinary shares whereby each
ordinary share of the Company is subdivided into 100 shares
at a par value of US$0.0001. All shares and per share amounts
presented in the accompanying consolidated financial statements
have been revised on a retroactive basis to reflect the effect
of the share split. The par value per ordinary share has been
retroactively revised as if it had been adjusted in proportion
to the
100-for-one
share split.
Amended the Companys 2008 Share Incentive Plan, to
increase the total number of ordinary shares that may be issued
under the 2008 Share Incentive Plan from 1,321,800 ordinary
shares to 4,765,800 ordinary shares.
27.
PARENT
COMPANY ONLY CONDENSED FINANCIAL INFORMATION
As at December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
274,515
40,215
36,523
167,140
24,485
36,523
441,655
64,700
395,208
763,010
111,777
37,746
5,529
431,731
1,242,411
182,006
F-48
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
As at December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
LIABILITIES AND SHAREHOLDERS EQUITY
529
78
615
90
10,788
1,580
11,932
1,748
36,853
36,853
11,932
1,748
254,358
37,262
411,101
60,224
41
55
8
443,016
1,113,150
163,070
147
(3,822
)
(560
)
(48,326
)
(544,363
)
(79,746
)
394,878
565,020
82,772
431,731
1,242,411
182,006
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
September 10, 2007
For the Years Ended
to December 31,
2007
December 31,
2008
(successor)
(successor)
RMB
RMB
US$
(53,862
)
(4,593
)
(673
)
(53,862
)
(4,593
)
(673
)
5,877
84,731
12,413
364
53
(895
)
(131
)
(341
)
(464
)
(68
)
(74
)
(11
)
(48,326
)
79,069
11,583
(270,343
)
(39,604
)
(304,763
)
(44,646
)
(48,326
)
(496,037
)
(72,667
)
F-50
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
For the Period from
September 10, to
For the Year Ended December 31,
December 31,
2007
2008
2008
(successor)
(successor)
(successor)
RMB
RMB
US$
526
77
(448,224
)
(65,662
)
727,849
106,626
(5,636
)
(826
)
274,515
40,215
274,515
40,215
176,082
25,795
36,523
F-51
Table of Contents
As at
Pro Forma as at
December 31,
September 30,
September 30,
Note
2008*
2009
2009
2009
2009
RMB
RMB
US$
RMB
US$
(unaudited)
(unaudited)
(unaudited)
353,991
285,703
41,854
250,276
36,664
5
2,012
295
92,772
119,127
17,451
43,566
56,869
8,331
2,649
2,776
407
492,978
466,487
68,338
5
5,233
767
3
349,121
557,433
81,661
300,163
300,163
43,972
181,838
161,450
23,652
4
167,200
147,851
21,659
12,650
12,648
1,853
10,445
10,782
1,578
11,207
1,642
1,514,395
1,673,254
245,122
5
20,800
30,000
4,395
5
39,840
44,880
6,575
9,741
9,744
1,427
1,881
25,839
3,785
3,719
3,582
525
42,444
44,221
6,479
17,041
22,864
3,349
12,656
13,395
1,962
28,016
6,500
952
6
10,788
35,428
5,190
10
3,607
1,607
235
190,533
238,060
34,874
F-52
Table of Contents
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
(Amounts in thousands of Renminbi (RMB) and US
dollar (US$),
except for number of shares)
As at
December 31
As at September 30,
Pro Forma as at September 30,
Note
2008*
2009
2009
2009
2009
RMB
RMB
US$
RMB
US$
(unaudited)
(unaudited)
(unaudited)
5
52,120
104,912
15,369
6,314
5,470
801
11,656
8,719
1,277
3,215
3,269
479
20,078
18,189
2,665
283,916
378,619
55,465
12
6
254,358
269,017
39,410
6
411,101
434,036
63,584
55
55
8
83
12
1,113,150
1,113,204
163,078
1,816,229
266,068
(3,822
)
(4,037
)
(592
)
(4,037
)
(592
)
(544,363
)
(517,640
)
(75,831
)
(517,640
)
(75,831
)
565,020
591,582
86,663
1,294,635
189,657
1,514,395
1,673,254
245,122
*
Amounts for the year ended
December 31, 2008 were derived from the December 31,
2008 audited consolidated financial statements.
F-53
Table of Contents
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of Renminbi (RMB) and US
dollar (US$),
except for number of shares and per share data)
Note
For the Nine Months Ended September 30,
2008
2009
2009
RMB
RMB
US$
(unaudited)
(unaudited)
(unaudited)
94,296
184,937
27,092
7,519
20,096
2,944
178
624
91
101,993
205,657
30,127
(14,671
)
(42,144
)
(6,174
)
(13,671
)
(20,388
)
(2,987
)
(19
)
(9
)
(1
)
(28,361
)
(62,541
)
(9,162
)
73,632
143,116
20,965
(3,275
)
(4,463
)
(654
)
(12,468
)
(19,687
)
(2,884
)
57,889
118,966
17,427
10
(5,293
)
(4,880
)
(715
)
(464
)
(13
)
(218
)
(32
)
392
116
823
121
52,627
114,691
16,801
8
(12,611
)
(25,734
)
(3,770
)
40,016
88,957
13,031
F-54
Table of Contents
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of Renminbi (RMB) and US
dollar (US$),
except for number of shares and per share data)
For the Nine Months Ended September 30,
Note
2008
2009
2009
RMB
RMB
USD
(unaudited)
(unaudited)
(unaudited)
6
(262,286
)
(23,851
)
(3,494
)
6
(38,383
)
(5,623
)
(222,270
)
26,723
3,914
14
(3.67
)
0.38
0.06
14
60,621,700
70,428,100
70,428,100
14
0.80
0.12
14
111,455,500
111,455,500
F-55
Table of Contents
For the Nine Months Ended September 30,
2008
2009
2009
RMB
RMB
US$
(unaudited)
(unaudited)
(unaudited)
40,016
88,957
13,031
4,215
2,425
54
8
9,413
35,101
5,142
13,671
20,388
2,987
(392
)
(2,830
)
(2,014
)
(295
)
464
895
(12,623
)
(26,355
)
(3,861
)
(49,570
)
(10,828
)
(1,586
)
(500
)
(1,035
)
(152
)
340
3
16,057
(5,543
)
(812
)
5,898
(105
)
(15
)
12
54
8
(121
)
5,823
853
27,370
104,500
15,308
(219,163
)
(21,534
)
(3,155
)
(300
)
(11,800
)
(1,729
)
(12,439
)
(74,033
)
(10,845
)
(71,406
)
(116,059
)
(17,002
)
2,616
(300,692
)
(223,426
)
(32,731
)
F-56
Table of Contents
For the Nine Months Ended September 30,
2008
2009
2009
RMB
RMB
US$
(unaudited)
(unaudited)
(unaudited)
140,241
67,671
(529
)
(77
)
(3,355
)
(491
)
19,000
2,783
128,780
18,866
(2,703
)
(3,074
)
(450
)
(17,260
)
(70,948
)
(10,393
)
(9,800
)
(1,436
)
(11,000
)
(2,000
)
(293
)
(7,245
)
(1,061
)
101,458
278,407
50,829
7,448
(5,949
)
(191
)
(29
)
(864
)
(68,288
)
(10,004
)
39,792
353,991
51,858
38,928
285,703
41,854
(7,346
)
(20,787
)
(3,045
)
(1,671
)
(4,771
)
(699
)
18,957
2,777
14,712
152,181
22,294
176,082
F-57
Table of Contents
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS
(Amounts in thousands of Renminbi (RMB) and US
dollar (US$))
Accumulated
Retained
Number of
Additional
Other
Earnings
Total
Ordinary
Ordinary
Paid-in
Comprehensive
(Cumulative
Shareholders
Shares
Shares
Capital
Income(loss)
Deficit)
Equity
RMB
RMB
RMB
RMB
RMB
RMB
50,000,000
41
443,016
147
(48,326
)
394,878
40,016
40,016
(5,810
)
(5,810
)
34,206
2,425
2,425
21,184,600
15
114,591
114,606
(756,500
)
(1
)
1
4,215
4,215
253,317
253,317
(262,286
)
(262,286
)
70,428,100
55
817,565
(5,663
)
(270,596
)
541,361
39,053
39,053
1,841
1,841
40,894
566
566
295,019
295,019
(8,057
)
(8,057
)
(304,763
)
(304,763
)
70,428,100
55
1,113,150
(3,822
)
(544,363
)
565,020
88,957
88,957
(215
)
(215
)
88,742
54
54
(23,851
)
(23,851
)
(38,383
)
(38,383
)
70,428,100
55
1,113,204
(4,037
)
(517,640
)
591,582
8
163,078
(590
)
(75,831
)
86,664
F-58
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares)
1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
F-59
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
In April 2009, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Codification
(ASC)
805-20,
Accounting for Assets Acquired and Liabilities Assumed in
a Business Combination That Arise from Contingencies to
amend SFAS 141 (revised 2007) Business
Combinations. ASC
805-20
addresses the initial recognition, measurement and subsequent
accounting for assets and liabilities arising from contingencies
in a business combination, and requires that such assets
acquired or liabilities assumed be initially recognized at fair
value at the acquisition date if fair value can be determined
during the measurement period. If the acquisition-date fair
value cannot be determined, the asset acquired or liability
assumed arising from a contingency is recognized only if certain
criteria are met. ASC
805-20
also
requires that a systematic and rational basis for subsequently
measuring and accounting for the assets or liabilities be
developed depending on their nature. The Company does not
anticipate that the adoption of this statement will have a
material impact on its consolidated financial statements, absent
any material business combinations.
In June 2009, the FASB issued SFAS No. 166,
Accounting for Transfers of Financial Assets
an amendment of FASB Statement No. 140
(SFAS 166). SFAS 166 seeks to improve the
relevance, representational faithfulness, and comparability of
the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the
effects of a transfer on its financial position, financial
performance, and cash flows; and a transferors continuing
involvement, if any, in transferred financial assets.
Specifically, SFAS 166 eliminates the concept of a
qualifying special-purpose entity, creates more stringent
conditions for reporting a transfer of a portion of a financial
asset as a sale, clarifies other sale-accounting criteria, and
changes the initial measurement of a transferors interest
in transferred financial assets. The Company does not anticipate
that the adoption of this statement will have a material impact
on its consolidated financial statements.
In June 2009, the FASB issued SFAS No. 167,
Amendments to FASB Interpretation No. 46(R)
(SFAS 167). SFAS 167 amends FASB
Interpretation No. 46(R), Variable Interest
Entities for determining whether an entity is a variable
interest entity (VIE) and requires an enterprise to
perform an analysis to determine whether the enterprises
variable interest or interests give it a controlling financial
interest in a VIE. Under SFAS 167, an enterprise has a
controlling financial interest when it has a) the power to
direct the activities of a VIE that most significantly impact
the entitys economic performance and b) the
obligation to absorb losses of the entity or the right to
receive benefits from the entity that could potentially be
significant to the VIE. SFAS 167 also requires an enterprise to
assess whether it has an implicit financial responsibility to
ensure that a VIE operates as designed when determining whether
it has power to direct the activities of the VIE that most
significantly impact the entitys economic performance.
SFAS 167 also requires ongoing assessments of whether an
enterprise is the primary beneficiary of a VIE, requires
enhanced disclosures and eliminates the scope exclusion for
qualifying special-purpose entities. The Company is currently
evaluating the impact the adoption of SFAS 167 will have on
its consolidated financial statements.
In June 2009, the FASB issued
ASC 105-10,
Generally Accepted Accounting Principles, previously
referenced as FASB Statement No. 168, The FASB Accounting
Standards
Codification
TM
and the Hierarchy of Generally Accepted Accounting Principles, a
replacement of FASB Statement No. 162. This statement
modifies the Generally Accepted Accounting Principles
(GAAP) hierarchy by establishing only two levels of
GAAP, authoritative and nonauthoritative accounting literature.
Effective July 2009, the FASB Accounting Standards
Codification
TM
(ASC), also known collectively as the
Codification, is considered
F-60
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
the single source of authoritative U.S. accounting and
reporting standards, except for additional authoritative rules
and interpretive releases issued by the SEC. Nonauthoritative
guidance and literature would include, among other things, FASB
Concepts Statements, American Institute of Certified Public
Accountants Issue Papers and Technical Practice Aids and
accounting textbooks. The Codification was developed to organize
U.S. GAAP pronouncements by topic so that users can more
easily access authoritative accounting guidance. It is organized
by topic, subtopic, section, and paragraph, each of which is
identified by a numerical designation. This statement applies
beginning in third quarter 2009. All accounting references have
been updated, and therefore U.S. GAAP standards have been
replaced with ASC references. This standard had no impact on the
Companys financial position, results of operations or cash
flows.
In August 2009, the FASB issued Accounting Standards Update
No. 2009-5,
Measuring Liabilities at Fair Value (ASU
2009-05).
ASU
2009-05
amends Accounting Standards Codification Topic 820, Fair
Value Measurements. Specifically, ASU
2009-05
provides clarification that in circumstances in which a quoted
price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value
using one or more of the following methods: 1) a valuation
technique that uses a) the quoted price of the identical
liability when traded as an asset or b) quoted prices for
similar liabilities or similar liabilities when traded as assets
and/or
2) a valuation technique that is consistent with the
principles of Topic 820 of the Accounting Standards Codification
(e.g. an income approach or market approach). ASU
2009-05
also
clarifies that when estimating the fair value of a liability, a
reporting entity is not required to adjust to include inputs
relating to the existence of transfer restrictions on that
liability. The Company does not anticipate that the adoption of
this statement will have a material impact on its consolidated
financial statements.
In September 2009, the Emerging Issues Task Force (EITF) reached
final consensus on ASC
605-25,
Revenue Arrangements with Multiple Deliverables. ASC
605-25
addresses how to determine whether an arrangement involving
multiple deliverables contains more than one unit of accounting,
and how the arrangement consideration should be allocated among
the separate units of accounting.
EITF 08-1
may be applied retrospectively or prospectively for new or
materially modified arrangements and early adoption is
permitted. The Company does not anticipate that the adoption of
this statement will have a material impact on its consolidated
financial statements.
2.
BUSINESS
COMBINATION
F-61
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
Nine Months Ended September 30, 2008
RMB
US$
164,867
24,152
67,573
9,899
(194,274
)
(28,460
)
(3.20
)
(0.47
)
3.
PROPERTY,
PLANT AND EQUIPMENT, NET
December 31,
2008
September 30, 2009
RMB
RMB
US$
(unaudited)
(unaudited)
299,100
524,514
76,838
1,895
2,154
316
178
520
76
1,182
2,552
375
65,029
79,883
11,702
367,384
609,623
89,307
(18,263
)
(52,190
)
(7,646
)
349,121
557,433
81,661
F-62
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
4.
DEPOSITS
FOR NON-CURRENT ASSETS
December 31,
2008
September 30,
2009
RMB
RMB
US$
(unaudited)
(unaudited)
128,749
98,822
14,477
17,630
16,420
2,405
20,821
32,609
4,777
167,200
147,851
21,659
*
Represents interest-free
non-refundable partial payments to suppliers associated with
contracts the Group enters into for the future scheduled
delivery of medical equipment to customers. As at
September 30, 2009, the remaining contractual obligations
associated with these purchase contracts are approximately
RMB102,688 (US$15,043) which is included in the amount disclosed
as Purchase commitments in note 12. The risk of loss
arising from non-performance by or bankruptcy of the suppliers
is assessed prior to ordering the equipment. To date, the Group
has not experienced any loss on deposit to suppliers.
**
On October 31, 2008, the Group
entered into a long-term sale and purchase agreement with Our
Medical New Technology, under which the Group agreed to purchase
gamma knife systems at agreed upon prices and Our Medical New
Technology also agreed to provide the Group relevant maintenance
and repair services and training. Our Medical New Technology is
controlled by an individual who is a relative of a shareholder
of the company. (See note 10.)
***
The Group has entered into two
distinct framework agreements with Changan Hospital Co.
Ltd. (Changan) and Changan Information
Industry (Group) Co., Ltd., (Changan
Information) towards the development and construction of
the following two medical facilities:
5.
BANK
BORROWINGS
December 31,
2008
September 30,
2009
RMB
RMB
US$
(unaudited)
(unaudited)
112,760
179,792
26,339
20,800
30,000
4,395
39,840
44,880
6,575
60,640
74,880
10,970
52,120
104,912
15,369
112,760
179,792
26,339
F-63
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
6.
CONTINGENTLY
REDEEMABLE CONVERTIBLE PREFERRED SHARES
F-64
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
7.
RESTRICTED
NET ASSETS
F-65
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
8.
TAXATION
9.
EMPLOYEE
SHARE OPTIONS
10.
RELATED
PARTY TRANSACTIONS
A relative of shareholder of the Company
Director and shareholder of the Company
Director and shareholder of the Company
Director and shareholder of the Company
A company owned by Mr. Haifeng Liu
A company under the control of Mr. Zheng Cheng
A company under the control of Mr. Haifeng Liu
F-66
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
b)
The Group had the following related party transactions for the
nine months ended September 30, 2008 and 2009:
Nine Months Ended September 30,
2008
2009
RMB
RMB
US$
(unaudited)
(unaudited)
(unaudited)
4,000
12,000
3,000
2,000
293
126
11,442
1,676
12,652
1,853
December 31,
2008
September 30,
2009
RMB
RMB
US$
(unaudited)
(unaudited)
196
196
28
2,000
1,351
1,351
198
60
60
9
3,607
1,607
235
17,630
16,420
2,405
11.
EMPLOYEE
DEFINED CONTRIBUTION PLAN
F-67
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
12.
COMMITMENTS
AND CONTINGENCIES
RMB
US$
1,336
196
5,148
754
4,763
698
2,305
338
13,552
1,986
13.
SEGMENT
REPORTING
F-68
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
14.
(LOSS)
INCOME PER SHARE (UNAUDITED)
Nine Months Ended September 30,
2008
2009
(amounts in thousands except for the number of shares and per
share data)
RMB
RMB
US$
(222,270
)
26,723
3,914
60,621,700
70,428,100
70,428,100
(3.67
)
0.38
0.06
F-69
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
15.
ARRANGEMENT
WITH CHANGAN HOSPITAL CO., LTD.
F-70
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
F-71
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
Nine Months Ended September 30,
2008
2009
2009
RMB
RMB
US$
(unaudited)
(unaudited)
(unaudited)
6,135
10,921
1,600
9,024
1,322
2,036
298
6,135
21,981
3,220
4,000
21,981
3,220
December 31,
September 30,
September 30,
2008
2009
2009
RMB
RMB
US$
(unaudited)
(unaudited)
15,000
15,000
2,197
20,821
32,615
4,778
35,821
47,615
6,975
F-72
Table of Contents
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Amount in thousands of Renminbi (RMB) and United
States Dollar (US$),
except for number of shares) (Continued)
16.
SUBSEQUENT
EVENTS
To distribute an interim dividend to the holders of the ordinary
shares as at November 17, 2009 in the sum of
(i) US$2,391,534 to the holders of the ordinary shares; and
(ii) US$1,590,676 to the holders of the Series A and B
Preferred Shares, such dividend to be payable in cash on or
about November 27, 2009.
Amended the Articles of Association to reflect a 100-for-one
stock split of the Companys ordinary shares whereby each
ordinary share of the Company is subdivided into 100 shares
at a par value of US$0.0001. All shares and per share amounts
presented in the accompanying consolidated financial statements
have been revised on a retroactive basis to reflect the effect
of the share split. The par value per ordinary share has been
retroactively revised as if it had been adjusted in proportion
to the
100-for-one
share split.
Amended the Companys 2008 Share Incentive Plan, to
increase the total number of ordinary shares that may be issued
under the 2008 Incentive Plan from 1,321,800 ordinary shares to
4,765,800 ordinary shares
F-73
Table of Contents
Page
F-75
F-76
F-78
F-79
F-81
F-82
F-74
Table of Contents
F-75
Table of Contents
As at
December 31,
As at July 31,
Notes
2007
2008
2008
RMB
RMB
US$
25,926
19,584
2,869
21,038
49,731
7,285
4
3,780
7,477
1,095
8
58
261
38
9
4,410
55,212
77,053
11,287
5
216,918
284,699
41,707
58,678
83,505
12,233
8
7,747
7,526
1,103
9
316
8,435
7,229
1,059
347,306
460,012
67,389
F-76
Table of Contents
As at
December 31,
As at July 31,
Notes
2007
2008
2008
RMB
RMB
US$
6
21,500
21,500
3,150
6
12,623
19,320
2,830
6,733
30,238
4,430
192
8,595
1,259
7
7,032
20,825
3,051
3,605
4,743
694
737
4,622
677
9
90
11
1,591
13,881
2,033
54,103
123,724
18,124
6
89,600
103,070
15,099
3,683
3,344
490
2,118
3,185
467
149,504
233,323
34,180
13
2,179
1
129,557
129,557
18,979
19,237
21,962
3,218
(929
)
(682
)
(100
)
47,758
75,852
11,112
195,623
226,689
33,209
347,306
460,012
67,389
F-77
Table of Contents
Year Ended
December 31,
Seven Month Period Ended
Notes
2007
July 31, 2008
RMB
RMB
US$
65,357
48,745
7,141
7,980
1,169
3,094
6,148
900
68,451
62,873
9,210
(23,484
)
(14,806
)
(2,169
)
(63
)
(9
)
(4,781
)
(28,265
)
(14,869
)
(2,178
)
40,186
48,004
7,032
(2,911
)
(1,581
)
(232
)
(17,224
)
(8,340
)
(1,221
)
20,051
38,083
5,579
351
32
5
(5,204
)
(1,585
)
(233
)
(400
)
(49
)
(230
)
(34
)
(5
)
(200
)
(29
)
14,744
36,100
5,288
8
(922
)
(8,445
)
(1,237
)
13,822
27,655
4,051
9
(193
)
(683
)
(100
)
9
1,122
164
(193
)
439
64
13,629
28,094
4,115
F-78
Table of Contents
Year Ended
December 31,
Seven Month Period Ended
2007
July 31, 2008
RMB
RMB
US$
13,629
28,094
4,115
193
(439
)
(64
)
13,822
27,655
4,051
1,529
2,725
399
23,180
14,857
2,176
400
(4,776
)
18
3
(11,196
)
(28,694
)
(4,204
)
(803
)
(1,083
)
(159
)
10,613
1,205
177
(1,803
)
23,506
3,444
270
1,964
288
(826
)
3,545
519
188
108
16
117
1,068
156
(762
)
1,138
167
29,953
48,012
7,033
(4,684
)
413
61
25,269
48,425
7,094
(19,661
)
(26,351
)
(3,860
)
(81,637
)
(72,713
)
(10,652
)
158
(101,140
)
(99,064
)
(14,512
)
(317
)
(77
)
(11
)
(101,457
)
(99,141
)
(14,523
)
F-79
Table of Contents
Year Ended
Seven Month Period
December 31,
January 1 to
2007
July 31, 2008
RMB
RMB
US$
10,500
21,500
135,200
53,780
7,878
12,000
1,758
12,274
1,798
(103,985
)
(33,613
)
(4,924
)
(14,222
)
48,993
44,441
6,510
2,350
51,343
44,441
6,510
3,384
(67
)
(10
)
(21,461
)
(6,342
)
(929
)
47,387
25,926
3,798
25,926
19,584
2,869
(4,502
)
(5,979
)
(876
)
(5,204
)
(1,585
)
(232
)
8,403
1,231
75,809
47,885
7,015
F-80
Table of Contents
Accumulated
Number of
Additional
Other
Total
Ordinary
Share
Paid-In
Comprehensive
Retained
Shareholders
Shares
Capital
Capital
Income (Loss)
Earnings
Equity
RMB
RMB
RMB
RMB
RMB
27,564,138
129,557
17,708
(353
)
34,129
181,041
13,629
13,629
(576
)
(576
)
13,053
1,529
1,529
27,564,138
129,557
19,237
(929
)
47,758
195,623
28,094
28,094
247
247
28,341
2,725
2,725
27,564,138
129,557
21,962
(682
)
75,852
226,689
18,979
3,218
(100
)
11,112
33,209
F-81
Table of Contents
1.
ORGANIZATION
AND BASIS OF PRESENTATION
Percentage of Ownership by the Company
Date of
Place of
December 31,
July 31,
Establishment
Establishment
2007
2008
MSC
March 21, 2003
PRC
100%
100%
Leasing and sales of medical equipment, provision of
management services
Anti-Aging
September 29, 2007
PRC
53%
Provision of technology and consultancy services
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
F-82
Table of Contents
F-83
Table of Contents
Estimated Residual
Value
Shorter of customer contract or 6-12 years
5 years
5-10
%
Shorter of lease term or 5 years
*
The cost of the asset is amortized over the lease term. However,
if ownership is transferred at the end of the lease term, the
cost of the asset is amortized over the shorter of customer
contract or 6-12 years.
F-84
Table of Contents
F-85
Table of Contents
F-86
Table of Contents
F-87
Table of Contents
F-88
Table of Contents
3.
CONCENTRATION
OF RISKS
F-89
Table of Contents
4.
PREPAYMENT
AND OTHER CURRENT ASSETS
As at December 31,
As at July 31,
2007
2008
2008
RMB
RMB
US$
2,564
2,564
376
2,950
432
1,216
1,963
287
3,780
7,477
1,095
5.
PROPERTY,
PLANT AND EQUIPMENT, NET
As at December 31,
As at July 31
2007
2008
2008
RMB
RMB
US$
210,176
286,581
41,983
448
448
66
528
528
77
73,485
79,718
11,678
284,637
367,275
53,804
(67,719
)
(82,576
)
(12,097
)
216,918
284,699
41,707
F-90
Table of Contents
6.
BANK
BORROWINGS
As at December 31,
As at July 31
2007
2008
2008
RMB
RMB
US$
21,500
21,500
3,150
12,623
19,320
2,830
34,123
40,820
5,980
89,600
103,070
15,099
123,723
143,890
21,079
7.
ACCRUED
EXPENSES AND OTHER LIABILITIES
As at December 31,
As at July 31
2007
2008
2008
RMB
RMB
US$
2,692
4,056
594
12,000
1,758
4,340
4,769
699
7,032
20,825
3,051
*
The amount represents interest-free
loans borrowed from an unrelated party. Such loan is for working
capital purpose and is repayable on demand. The balance was
settled by the end of December 31, 2008.
8.
TAXATION
F-91
Table of Contents
Period From
Year Ended December 31,
January 1 to July 31,
2007
2008
RMB
RMB
US$
(9,175
)
(3,392
)
(497
)
23,919
39,492
5,785
14,744
36,100
5,288
Year Ended
Period From
December 31,
January 1 to July 31,
2007
2008
RMB
RMB
US$
5,698
8,427
1,234
(4,776
)
18
3
922
8,445
1,237
Year Ended
Period From
December 31,
January 1 to July 31,
2007
2008
RMB
RMB
US$
14,744
36,100
5,288
4,866
9,025
1,322
3,285
1,572
230
(6,431
)
(3,009
)
(441
)
(1,137
)
168
25
339
689
101
922
8,445
1,237
F-92
Table of Contents
Unrecognized Tax Benefits
RMB(000)
US$(000)
1,192
175
427
62
1,619
237
675
99
2,294
336
As at December 31,
As at July 31,
2007
2008
RMB
RMB
US$
216
32
58
45
6
58
261
38
4,917
3,810
558
(1,664
)
(1,198
)
(175
)
4,174
4,642
680
320
272
40
7,747
7,526
1,103
F-93
Table of Contents
9.
DISCONTINUED
OPERATIONS
10.
SHARE
BASED COMPENSATION
F-94
Table of Contents
Weighted-Average
Weighted Average
Share Options
Weighted-Average
Grant-Date Fair
Remaining
Aggregated
granted to
Exercise Price
Value
Contractual Term
Intrinsic Value
Number of Shares
(GB pound)
(GB pound)
(Years)
(GB pound)
872,853
0.78
0.36
9.9
872,853
0.78
0.36
8.9
(872,853
)
0.78
0.36
8.3
4.7
%
Nil
37
%
6.5 years
11.
RELATED
PARTY TRANSACTIONS
F-95
Table of Contents
Director of the Company
Director of the Company
A company under the control of a director of the Company
As at December 31,
As at July 31,
2007
2008
RMB
RMB
US$
196
196
29
1,191
1,191
174
204
220
32
12,274
1,798
1,591
13,881
2,033
12.
EMPLOYEE
DEFINED CONTRIBUTION PLAN
13.
COMMITMENTS
AND CONTINGENCIES
RMB
US$
866
127
1,362
199
94
14
2,322
340
Table of Contents
F-97
Table of Contents
P-2
Table of Contents
for the Year Ended December 31, 2008
(Amounts in thousands of Renminbi (RMB) except for
number of shares)
Pro forma
Pro forma
Concord Medical
China Medstar
Adjustment
Notes
Combined
For the seven
For the Year Ended
month period
December 31,
ended July 31,
2008
2008
2008
RMB
RMB
RMB
RMB
155,061
48,745
203,806
12,677
7,980
20,657
4,051
6,148
10,199
171,789
62,873
234,662
(25,046
)
(14,806
)
5,624
(1
)
(34,228
)
(20,497
)
(5,743
)
(1
)
(26,240
)
(54
)
(63
)
(117
)
(45,597
)
(14,869
)
(60,585
)
126,192
48,004
174,077
(5,497
)
(1,581
)
(7,078
)
(18,869
)
(8,340
)
(27,209
)
101,826
38,083
139,790
(7,455
)
(1,585
)
(9,040
)
(464
)
(464
)
(325
)
(230
)
(555
)
658
(658
)
430
32
462
7,734
(200
)
7,534
102,404
36,100
138,385
(23,335
)
(8,445
)
21
(2
)
(31,759
)
79,069
27,655
106,626
1.38
1.85
57,481,400
57,481,400
P-3
Table of Contents
RMB
US$
21,210
3,107
77,053
11,287
9,397
1,377
217,965
31,931
52,380
7,673
83,505
12,233
23,089
3,382
(12,529
)
(1,835
)
(233,323
)
(34,180
)
238,747
34,975
P-4
Table of Contents
Table of Contents
ITEM 6
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
ITEM 7
RECENT
SALES OF UNREGISTERED SECURITIES
Underwriting
Date of Sale or
Consideration in
Discount and
November 27, 2007
1 ordinary share*
$
0.05
n/a
March 8, 2008
225,000 ordinary
shares
(1)
$
2,250
n/a
March 8, 2008
37,500 ordinary
shares
(1)
*
$
375
n/a
March 8, 2008
37,500 ordinary
shares
(1)
*
$
375
n/a
March 8, 2008
199,999 ordinary
shares
(1)
*
$
1,999.99
n/a
April 3, 2008
53,292 Series A contingently redeemable convertible preferred
shares
(2)
$
4,808,250
n/a
April 3, 2008
2,125 Series A contingently redeemable convertible preferred
shares
(2)
$
191,750
n/a
April 3, 2008
26,535 Series A contingently redeemable convertible preferred
shares
$
5,000,000
n/a
April 10, 2008
convertible loan promissory
note
(3)
$
19,233,000
n/a
April 10, 2008
convertible loan promissory
note
(4)
$
767,000
n/a
August 18, 2008
109,736 ordinary
shares
(5)
*
$
8,669,144
n/a
August 18, 2008
47,030 ordinary
shares
(5)
*
$
3,715,370
n/a
August 18, 2008
32,624 ordinary
shares
(5)
*
$
2,577,296
n/a
August 18, 2008
16,524 ordinary
shares
(5)
*
$
1,305,396
n/a
August 18, 2008
5,932 ordinary
shares
(5)
*
$
468,628
n/a
II-1
Table of Contents
Underwriting
Date of Sale or
Consideration in
Discount and
October 20, 2008
93,493 Series B contingently redeemable convertible preferred
shares
$
24,041,250
n/a
October 20, 2008
3,728 Series B contingently redeemable convertible preferred
shares
$
958,750
n/a
October 20, 2008
38,889 Series B contingently redeemable convertible preferred
shares
$
10,000,000
n/a
October 20, 2008
97,222 Series B contingently redeemable convertible preferred
shares
$
25,000,000
n/a
(1)
Issued in connection with a share
swap with Ascendium Group Limited as part of the reorganization
to establish Concord Medical Services Holding Limited as our
ultimate holding company.
(2)
The numbers of Series A
contingently redeemable convertible preferred shares issued to
Carlyle Asia Growth Partners III, L.P. and CAGP III
Co-Investment, L.P. on April 3, 2008 also include
Series A contingently redeemable convertible preferred
shares issued as a result of the conversion of two convertible
loan promissory notes issued on November 16, 2007 by our
predecessor, Our Medical Services, Ltd., or OMS, plus accrued
interest. OMS received consideration for the issuance of such
convertible loan promissory notes in the amount of $4,808,250
and $191,750 from Carlyle Asia Growth Partners III, L.P. and
CAGP III Co-Investment, L.P., respectively.
(3)
The convertible loan promissory
note was converted into 84,072 of our Series A contingently
redeemable convertible preferred shares on July 30, 2008.
(4)
The convertible loan promissory
note was converted into 3,353 of our Series A contingently
redeemable convertible preferred shares on July 30, 2008.
(5)
Issued as settlement for the share
options issued to certain of our directors under the share
option plan adopted by our predecessor company, Our Medical
Services Limited, on November 17, 2007.
*
Does not take into account the
share split effective on November 17, 2009 whereby all of
our issued and outstanding 704,281 ordinary shares of a par
value of US$0.01 per share were split into 70,428,100 ordinary
shares of US$0.0001 par value per share and the number of our
authorized ordinary shares were increased from 4,500,000 to
450,000,000.
ITEM 8
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
ITEM 9
UNDERTAKINGS
Table of Contents
II-3
Table of Contents
By:
Title:
Director, Chief Executive Officer and President
Director, Chief Executive Officer and President
(principal executive officer)
Co-Chairman and Chief Operating Officer
Co-Chairman and Chief Financial Officer
(principal financial and accounting officer)
Director and Executive President
Director and Financial Controller
II-4
Table of Contents
Director
Director
Director
Director
II-5
Table of Contents
By:
Title:
Managing Director
II-6
Table of Contents
Exhibit
Form of Underwriting Agreement
Second Amended and Restated Memorandum and Articles of
Association of the Registrant, as currently in effect
Secretarys Certificate of the Registrant dated as of
November 17, 2009 as to the Amendment to the Second Amended
and Restated Memorandum and Articles of Association of the
Registrant
Form of Third Amended and Restated Memorandum and Articles of
Association of the Registrant
Form of Registrants American Depository Receipt (included
in Exhibit 4.3)
Specimen Certificate for Ordinary Shares of the Registrant
Form of Deposit Agreement among the Registrant, the Depositary
and Owners and Beneficial Owners of the American Depository
Shares issued thereunder
Series A Preferred Shares Subscription Agreement, dated as
of February 5, 2008, as amended on April 2, 2008 and
on October 20, 2008, among CICC Sun Company Limited,
Carlyle Asia Growth Partners III, L.P., CAGP III Co-Investment,
L.P., Liu Haifeng, Steve Sun, Yang Jianyu, Bona Liu, Our Medical
Services, Ltd., Ascendium Group Limited, Shenzhen Aohua Medical
Services Co., Ltd. and Concord Medical Services Holdings Limited
Amendment No. 1 to Series A Preferred Shares
Subscription Agreement, dated as of April 2, 2008, among
CICC Sun Company Limited, Carlyle Asia Growth Partners III,
L.P., CAGP III Co-Investment, L.P., Liu Haifeng, Steve Sun, Yang
Jianyu, Bona Liu, Our Medical Services, Ltd., Ascendium Group
Limited, Shenzhen Aohua Medical Services Co., Ltd. and Concord
Medical Services Holdings Limited
Amendment No. 2 to Series A Preferred Shares
Subscription Agreement, dated as of October 20, 2008, among
CICC Sun Company Limited, Carlyle Asia Growth Partners III,
L.P., CAGP III Co-Investment, L.P., Liu Haifeng, Steve Sun, Yang
Jianyu, Bona Liu, Our Medical Services, Ltd., Ascendium Group
Limited, Shenzhen Aohua Medical Services Co., Ltd. and Concord
Medical Services Holdings Limited
Series B Preferred Shares Subscription Agreement, dated as
of October 10, 2008, as amended on October 20, 2008,
among CICC Sun Company Limited, Carlyle Asia Growth Partners
III, L.P., CAGP III Co-Investment, L.P., Starr Investments
Cayman II, Inc., Concord Medical Services Holdings Limited and
other persons named therein
Amendment to Series B Preferred Shares Subscription
Agreement, dated as of October 20, 2008, among CICC Sun
Company Limited, Carlyle Asia Growth Partners III, L.P., CAGP
III Co-Investment, L.P., Starr Investments Cayman II, Inc.,
Concord Medical Services Holdings Limited and other persons
named therein
Amended and Restated Shareholders Agreement, dated as of
October 20, 2008, among Concord Medical Services Holdings
Limited, Carlyle Asia Growth Partners III, L.P., CAGP III
Co-Investment, CICC Sun Company Limited, Perfect Key Holdings
Limited, Starr Investments Cayman II, Inc. and certain other
persons named therein
Share Charge, dated as of November 10, 2008, by CZY Investments
Limited in favor of CICC Sun Company Limited, Carlyle Asia
Growth Partners III, L.P., CAGP III Co-Investment, L.P. and
Starr Investments Cayman II, Inc.
Share Charge, dated as of November 10, 2008, by Daketala
International Investment Holdings Ltd. in favor of CICC Sun
Company Limited, Carlyle Asia Growth Partners III, L.P., CAGP
III Co-Investment, L.P. and Starr Investments Cayman II, Inc.
Share Charge, dated as of November 10, 2008, by Dragon Image
Investment Ltd. in favor of CICC Sun Company Limited, Carlyle
Asia Growth Partners III, L.P., CAGP III Co-Investment, L.P. and
Starr Investments Cayman II, Inc.
Share Charge, dated as of November 10, 2008, by Notable
Enterprise Limited in favor of CICC Sun Company Limited, Carlyle
Asia Growth Partners III, L.P., CAGP III Co-Investment, L.P. and
Starr Investments Cayman II, Inc.
Share Charge, dated as of November 10, 2008, by Thousand Ocean
Group Limited in favor of CICC Sun Company Limited, Carlyle Asia
Growth Partners III, L.P., CAGP III Co-Investment, L.P. and
Starr Investments Cayman II, Inc.
II-7
Table of Contents
Exhibit
Share Charge, dated as of November 10, 2008, by Top Mount Group
Limited in favor of CICC Sun Company Limited, Carlyle Asia
Growth Partners III, L.P., CAGP III Co-Investment, L.P. and
Starr Investments Cayman II, Inc.
Deed of Amendment, dated as of September 14, 2009, among
CICC Sun Company Limited, Carlyle Asia Growth Partners III,
L.P., CAGP III Co-Investment, L.P., Starr Investments Cayman II,
Inc. and Notable Enterprise Limited
Deed of Partial Release, dated as of September 14, 2009, by
CICC Sun Company Limited, Carlyle Asia Growth Partners III,
L.P., CAGP III Co-Investment, L.P. and Starr Investments Cayman
II, Inc. in favor of CZY Investment Limited
Amendment to Amended and Restated Shareholders Agreement, dated
as of November 17, 2009, among Concord Medical Services
Holdings Limited, Carlyle Asia Growth Partners III, L.P.,
CAGP III Co-Investment, CICC Sun Company Limited, Perfect
Key Holdings Limited, Starr Investments Cayman II, Inc. and
certain other persons named therein
Opinion of Walkers regarding the validity of the ordinary shares
being registered
Opinion of Walkers regarding certain Cayman Islands tax matters
(included in Exhibit 5.1)
Opinion of Simpson Thacher & Bartlett LLP regarding
certain U.S. tax matters
2008 Share Incentive Plan adopted as of October 16,
2008
Form of Indemnification Agreement with the Registrants
directors and officers
Form of Medical Equipment Lease Agreement
Form of Equipment Management Services Agreement
Form of Service-only Management Agreement
Summary of the Oral Agreement entered into between China Medstar
Pte. Ltd. and Beijing Medstar Hi-Tech Investment Co., Ltd.
Summary of the Oral Agreement entered into between China Medstar
Pte. Ltd. and Cheng Zheng
Summary of the Oral Agreement entered into between China Medstar
Pte. Ltd. and Yaw Kong Yap
Translation of Medical Equipment Lease Agreement, dated as of
August 25, 2009, by and between Medstar (Shanghai) Leasing Co.,
Ltd. and Changan Hospital Co., Ltd.
Translation of Service-Only Management Agreement, dated as of
August 1, 2008, among CMS Hospital Management Co., Ltd.,
Xian Wanjiechangxin Medical Services Company Limited and
Changan Hospital Co., Ltd.
Translation of Agreement Concerning the Establishment of the
Aohai Radiotherapy Treatment and Diagnosis Research Center,
dated as of September 19, 1995, by and between the Chinese
Peoples Liberation Army Navy General Hospital and Beijing
Our Medical Equipment Development Company, which transferred its
interest in the agreement to Shenzhen Aohua Medical Services
Co., Ltd.
Translation of Supplemental Agreement Concerning the Development
of the Aohai Radiotherapy Treatment and Diagnosis Research
Center, dated as of March 18, 1999, by and between Shenzhen
Aohua Medical Services Co., Ltd. and the Chinese Peoples
Liberation Army Navy General Hospital.
Translation of Supplemental Agreement Concerning the Development
of the Aohai Radiotherapy Treatment and Diagnosis Research
Center, dated as of September 27, 2003, by and between Shenzhen
Aohua Medical Services Co., Ltd. and the Chinese Peoples
Liberation Army Navy General Hospital.
Translation of Medical Equipment Lease Agreement, dated as of
September 29, 2006, by and between Shanghai Medstar Investment
Management Co., Ltd., the predecessor of Medstar (Shanghai)
Leasing Co., Ltd., and the Chinese Peoples Liberation Army
Navy General Hospital.
Translation of Supplemental Agreement Concerning the Development
of the Aohai Radiotherapy Treatment and Diagnosis Research
Center, dated as of July 8, 2009, by and between Shenzhen Aohua
Medical Services Co., Ltd. and the Chinese Peoples
Liberation Army Navy General Hospital.
Translation of Supplemental Agreement to the Service-only
Management Agreement, dated as of August 1, 2008, among
Xian Wanjiechangxin Medical Services Company Limited,
Changan Hospital Co., Ltd. and CMS Hospital Management
Co., Ltd.
Translation of Agreement Regarding the Transfer of Equity in
Aohai Radiotherapy Treatment and Diagnosis Research Center,
dated as of May 5, 1997, among Beijing Our Medical Equipment
Development Company, Shenzhen Aohua Medical Services Co., Ltd.
and the Chinese Peoples Liberation Army Navy General
Hospital.
II-8
Table of Contents
Exhibit
Translation of Supplemental Agreement to the Supplemental
Agreement Concerning the Development of the Aohai Radiotherapy
Treatment and Diagnosis Research Center, dated as of September
15, 2004, by and between Shenzhen Aohua Medical Services Co.,
Ltd. and the Chinese Peoples Liberation Army Navy General
Hospital.
Translation of Supplemental Agreement to the Cooperation
Contract Concerning the Aohai Radiotherapy Treatment and
Diagnosis Research Center, dated as of August 16, 2003, by and
between Shenzhen Aohua Medical Services Co., Ltd. and the
Chinese Peoples Liberation Army Navy General Hospital.
Subsidiaries of the Registrant
Consent of Independent Registered Public Accounting Firm
Consent of Walkers (included in Exhibit 5.1)
Consent of Simpson Thacher & Bartlett LLP (included in
Exhibit 8.2)
Consent of Jingtian & Gongcheng Attorneys At Law
Consent of Frost & Sullivan
Powers of Attorney (included on the signature page in
Part II of this registration statement)
Code of Business Conduct and Ethics
Form of Opinion of Jingtian & Gongcheng Attorneys At Law
*
To be submitted by amendment
Confidential treatment has been requested for portions of this
document.
II-9
1
2
3
Signature, Name, Occupation,
|
Number of Shares Taken | |
and Address of Subscriber
|
by Each Subscriber | |
For and on behalf of
Offshore Incorporations (Cayman) Limited Corporation of Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112 CAYMAN ISLANDS |
ONE | |
(Sd.) Authorized Signatory
|
WITNESS to the above signature :-
|
(Sd.) Sharon Kyberd
of Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112 CAYMAN ISLANDS |
4
Asst. REGISTRAR OF COMPANIES (SD.) |
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
|
WITNESS to the above signature :-
|
(Sd.) Sharon Kyberd | |
|
of Scotia Centre, 4th Floor, | |
|
P.O. Box 2804, | |
|
George Town, | |
|
Grand Cayman KY1-1112 | |
|
CAYMAN ISLANDS |
|
68
/s/ Shi Bo Tao | ||||
Name: | Shi Bo Tao | |||
Title: | Company Secretary |
2
CONCORD MEDICAL SERVICES HOLDINGS LIMITED | ||||
Certificate | (the Company) | Ordinary Shares | ||
Number | [ ] | |||
[ ] | INCORPORATED IN THE CAYMAN ISLANDS UNDER THE COMPANIES LAW | |||
(AS AMENDED OR REVISED FROM TIME TO TIME ) |
|
||
Director/Secretary
|
Page | ||||
ARTICLE 1
|
||||
Definitions
|
||||
|
||||
Section 1.01
. Definitions
|
9 | |||
Section 1.02
. Other Definitional and Interpretative Provisions
|
9 | |||
|
||||
ARTICLE 2
|
||||
Issuance and Subscription
|
||||
|
||||
Section 2.01
. Issuance and Subscription
|
10 | |||
Section 2.02.
Closing
|
10 | |||
Section 2.03.
Additional Subscription Right
|
11 | |||
|
||||
ARTICLE 3
|
||||
Mandatory and Optional Additional Investments
|
||||
Section 3.01.
Mandatory Additional Investment
|
11 | |||
Section 3.02.
Optional Additional Investment
|
13 | |||
|
||||
ARTICLE 4
|
||||
Earning Adjustments
|
||||
|
||||
Section 4.01
. Calculation of 2008 Net Income
|
14 | |||
Section 4.02
. Adjustment with respect to the Subscription
|
14 | |||
Section 4.03
. Adjustment with respect to the Carlyle Loan Conversion
|
14 | |||
Section 4.04
. Adjustment with respect to the Additional Investment
|
15 | |||
Section 4.05.
Procedure of Adjustment
|
15 | |||
|
||||
ARTICLE 5
|
||||
Representations and Warranties Regarding the Group
|
||||
|
||||
Section 5.01
. Corporate Status
|
16 | |||
Section 5.02
. Power and Authority; Corporate Authorization
|
17 | |||
Section 5.03
. Enforceability
|
17 | |||
Section 5.04
. Noncontravention
|
17 | |||
Section 5.05
. Governmental Authorization
|
18 | |||
Section 5.06
. Capitalization of the Company
|
18 | |||
Section 5.07
. Capitalization of the PRC Subsidiaries
|
19 | |||
Section 5.08
. Other Group Company
|
19 | |||
Section 5.09
. Financial Statements
|
20 | |||
Section 5.10
. Books And Records
|
21 | |||
Section 5.11
. No Material Adverse Effect
|
21 | |||
Section 5.12
. No Material Liabilities
|
21 | |||
Section 5.13
. Absence of Changes
|
21 |
i
Page | ||||
Section 5.14
. Compliance with Laws
|
23 | |||
Section 5.15
. No Litigation
|
24 | |||
Section 5.16
. No Default
|
24 | |||
Section 5.17
. Property; Liens
|
24 | |||
Section 5.18
. Tax
|
25 | |||
Section 5.19
. Affiliate Transactions
|
25 | |||
Section 5.20
. Intellectual Property
|
25 | |||
Section 5.21
. Contracts
|
26 | |||
Section 5.22
. Environmental Matters
|
27 | |||
Section 5.23
. Employees, Labor Matters, Etc.
|
28 | |||
Section 5.24
. Licenses and Permits
|
28 | |||
Section 5.25
. Representations
|
28 | |||
Section 5.26
. Disclosure
|
29 | |||
|
||||
ARTICLE 6
|
||||
Representations and Warranties Regarding the Founders and the
|
||||
Controlling Shareholders
|
||||
|
||||
Section 6.01
. Power and Authority
|
29 | |||
Section 6.02
. Enforceability
|
29 | |||
Section 6.03
. Noncontravention
|
29 | |||
Section 6.04
. Governmental Authorization
|
30 | |||
Section 6.05
. Ownership of Shares
|
30 | |||
|
||||
ARTICLE 7
|
||||
Representations and Warranties of Investors
|
||||
|
||||
Section 7.01
. Corporate Status
|
31 | |||
Section 7.02
. Power And Authority
|
31 | |||
Section 7.03
. Enforceability
|
31 | |||
Section 7.04
. Noncontravention
|
31 | |||
Section 7.05
. Purchase for Investment
|
31 | |||
Section 7.06
. Legends
|
31 | |||
Section 7.07
. Litigation
|
32 | |||
|
||||
ARTICLE 8
|
||||
Covenants of the Group, Founders and Controlling Shareholders
|
||||
|
||||
Section 8.01
. Conduct of the Company
|
32 | |||
Section 8.02
. Use of Proceeds
|
34 | |||
Section 8.03
. Information Rights
|
35 | |||
Section 8.04
. Inspection Right
|
36 | |||
Section 8.05
. Compliance with Law
|
37 | |||
Section 8.06
. Books and Records
|
37 | |||
Section 8.07
. Restructuring
|
37 | |||
Section 8.08
. Other Transaction Documents
|
37 | |||
Section 8.09
. Amended And Restated Memorandum And Articles
|
37 |
ii
Page | ||||
Section 8.10
. Adoption of International Accounting Standards
|
37 | |||
Section 8.11
. IPO
|
37 | |||
Section 8.12
. Acquisition of Shenzhen Our New Medical Technology Co. Ltd
|
37 | |||
Section 8.13.
Employment Contracts
|
37 | |||
Section 8.14
. Non-Competition Agreement
|
38 | |||
Section 8.15
. Intellectual Property Rights
|
38 | |||
Section 8.16
. Employee Stock Options
|
38 | |||
|
||||
ARTICLE 9
|
||||
Covenants of All Parties
|
||||
|
||||
Section 9.01.
Best Efforts; Further Assurance
|
39 | |||
Section 9.02.
Certain Filings
|
39 | |||
Section 9.03.
Public Announcements
|
39 | |||
|
||||
ARTICLE 10
|
||||
Conditions to Closing
|
||||
|
||||
Section 10.01.
Conditions to Obligations of the Investors
|
40 | |||
|
||||
ARTICLE 11
|
||||
Survival; Indemnification
|
||||
|
||||
Section 11.01.
Survival
|
42 | |||
Section 11.02.
Indemnification
|
43 | |||
Section 11.03.
Procedures
|
44 | |||
|
||||
ARTICLE 12
|
||||
Termination
|
||||
|
||||
Section 12.01
. Grounds for Termination
|
44 | |||
Section 12.02
. Effect of Termination
|
44 | |||
|
||||
ARTICLE 13
|
||||
Miscellaneous
|
||||
|
||||
Section 13.01.
Notices
|
45 | |||
Section 13.02.
Amendments and Waivers
|
46 | |||
Section 13.03
. Disclosure Schedule References
|
46 | |||
Section 13.04.
Expenses
|
46 | |||
Section 13.05.
Successors and Assigns
|
46 | |||
Section 13.06.
Governing Law
|
47 | |||
Section 13.07.
Jurisdiction
|
47 | |||
Section 13.08.
WAIVER OF JURY TRIAL
|
47 | |||
Section 13.09.
Counterparts; Effectiveness; Third Party Beneficiaries
|
47 | |||
Section 13.10.
Entire Agreement
|
48 | |||
Section 13.11.
Severability
|
48 |
iii
Page | ||||
Section 13.12.
Specific Performance
|
48 | |||
Section 13.13.
Joint Drafting
|
48 |
Exhibit A
|
Form of Shareholders Agreement | |
|
||
Annex I
|
Section 11.01 for the Amended and Restated Convertible Loan Agreement | |
|
||
Annex II
|
Provisions to be Included in the Amended and Restated Memorandum and Articles |
iv
2
3
4
5
6
7
Term | Section | |||
Additional Carlyle Purchase Price
|
3.02 | |||
Additional Carlyle Purchased Shares
|
3.02 | |||
Amended and Restated Convertible Loan Agreement
|
Recitals | |||
Amended and Restated Memorandum and Articles
|
10.01 | (i) | ||
AGL
|
Preamble | |||
Aohua
|
Preamble | |||
Audited Financial Statements
|
5.09 | |||
Agreement
|
Preamble | |||
Books and Records
|
5.10 | |||
CAGP
|
Preamble | |||
CAGP Co-Invest
|
Preamble | |||
Carlyle
|
Preamble | |||
Carlyle Loan Conversion
|
Recitals |
8
Term | Section | |||
CICC
|
Preamble | |||
Closing
|
2.02 | |||
Company
|
Preamble | |||
Company Securities
|
5.06 | (b) | ||
Controlling Shareholders
|
Preamble | |||
Conversion Shares
|
3.01(b)(iii) | |||
Damages
|
11.02 | |||
e-mail
|
13.01 | |||
Existing Carlyle Loan
|
Recitals | |||
Existing Loan Agreement
|
Recitals | |||
Founders
|
Preamble | |||
Indemnified Party
|
11.03 | |||
Indemnifying Party
|
11.03 | |||
Investors
|
Preamble | |||
Intellectual Property
|
5.20 | (a) | ||
Lease Permit
|
5.01 | (b) | ||
Loan Extension Date
|
3.01 | (a) | ||
Mandatory Additional Investment Right
|
3.01 | (a) | ||
Mandatory Convertible Loan
|
3.01 | (a) | ||
Mandatory Convertible Loan Agreement
|
3.01 | (b) | ||
Mr. Liu
|
Preamble | |||
Mr. Sun
|
Preamble | |||
Mr. Sun Holding Company
|
6.05 | (a) | ||
Mr. Yang
|
Preamble | |||
Mr. Yang Holding Company
|
6.05 | (a) | ||
Ms. Liu
|
Preamble | |||
Ms. Liu Holding Company
|
6.05 | (a) | ||
OMS
|
Preamble | |||
Optional Additional Investment Right
|
3.02 | |||
Ordinary Shares
|
Recitals | |||
PRC Subsidiary
|
5.01 | (b) | ||
Purchased Shares
|
2.01 | |||
Put Option
|
3.01 | |||
Restructuring
|
Recitals | |||
Series A Shares
|
Recitals | |||
Subscription
|
Recitals | |||
Subsidiary Securities
|
5.08 | (b) | ||
Warranty Breach
|
11.02 |
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
CONCORD MEDICAL SERVICES
HOLDINGS LIMITED |
||||
By: | /s/ Ku Wai Hong | |||
Name: | Ku Wai Hong | |||
Title: | Director | |||
ASCENDIUM GROUP LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | Director | |||
OUR MEDICAL SERVICES, LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | Director | |||
SHENZHEN AOHUA MEDICAL SERVICES
CO., LTD. ( ) |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | Director | |||
/s/ Liu Haifeng | ||||
Liu Haifeng, in his individual capacity | ||||
/s/ Steve Sun | ||||
Steve Sun, in his individual capacity | ||||
/s/ Yang Jianyu | ||||
Yang Jianyu, in his individual capacity | ||||
/s/ Bona Liu | ||||
Bona Liu, in her individual capacity | ||||
CICC SUN COMPANY LIMITED
|
||||
By: | /s/ Shirley Chen | |||
Name: | Shirley Chen | |||
Title: | Director |
CARLYLE ASIA GROWTH PARTNERS III, L.P. | ||||||
|
||||||
|
By: | CAGP General Partner, L.P., as its General Partner | ||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: |
/s/ Daniel A. DAniello
|
||||
|
Name: Daniel A. DAniello | |||||
|
Title: Director | |||||
|
||||||
CAGP III CO-INVESTMENT, L.P. | ||||||
|
||||||
|
By: | CAGP General Partner, L.P., as its General Partner | ||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: | /s/ Daniel A. DAniello | ||||
|
||||||
|
Name: Daniel A. DAniello | |||||
|
Title: Director |
A-1
S-1
S-2
Name of Investor | US Dollars | |||
CICC Sun Company Limited
|
5,000,000 | |||
Carlyle Asia Growth Partners III, L.P.
|
4,808,250 | |||
CAGP III Co-Investment III, L.P.
|
191,750 |
S-3
S-4
Subsidiary Name | Registered Capital | |
Shenzhen Aohua Medical Services Co., Ltd.
|
US$6,134,000 |
S-5
Company Name | Jurisdiction of Incorporation | |
Concord Medical Services Limited | Cayman Islands | |
Ascendium Group Limited | British Virgin Islands | |
Our Medical Services, Ltd. | British Virgin Islands | |
Shenzhen Aohua Medical Services Co., Ltd. | PRC |
S-6
S-7
S-8
S-9
S-10
S-11
S-12
2
3
4
CONCORD MEDICAL SERVICES HOLDINGS LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
ASCENDIUM GROUP LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
OUR MEDICAL SERVICES LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHENZHEN AOHUA MEDICAL SERVICES CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Liu Haifeng | ||||
Liu Haifeng, in his individual capacity | ||||
/s/ Steve Sun | ||||
Steve Sun, in his individual capacity | ||||
/s/ Yang Jianyu | ||||
Yang Jianyu, in his individual capacity | ||||
/s/ Bona Liu | ||||
Bona Liu, in her individual capacity | ||||
CICC SUN COMPANY LIMITED
|
||||
By: | /s/ Shirley Shiyou Chen | |||
Name: | Shirley Shiyou Chen | |||
Title: |
CARLYLE ASIA GROWTH PARTNERS III, L.P.
|
||||
By: | CAGP General Partner, L.P., as its General Partner | |||
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | |||
By: | /s/ Daniel A. DAniello | |||
Name: | Daniel A. DAniello | |||
Title: | Director |
CAGP III CO-INVESTMENT, L.P.
|
||||
By: | CAGP General Partner, L.P., as its General Partner | |||
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | |||
By: | /s/ Daniel A. DAniello | |||
Name: | Daniel A. DAniello | |||
Title: | Director | |||
2
3
Pre-Closing Options
|
8.16 | (a) | ||
|
||||
Post Closing Options
|
8.16 | (b) |
4
5
6
7
8
CONCORD MEDICAL SERVICES HOLDINGS
LIMITED |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
ASCENDIUM GROUP LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CHINA MEDSTAR PTE. LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CYBER MEDICAL NETWORK LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
OUR MEDICAL SERVICES, LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: |
CHINA MEDICAL SERVICES (HOLDINGS)
LIMITED |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHENZHEN AOHUA MEDICAL SERVICES CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHENZHEN AOHUA MEDICAL LEASING AND SERVICES CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHANGHAI MEDSTAR LEASING CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CMS HOSPITAL MANAGEMENT CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Steve Sun | ||||
Steve Xiaodi Sun, in his individual capacity | ||||
DRAGON IMAGE INVESTMENT LTD.
|
||||
By: | /s/ Steve Sun | |||
Name: | Steven Xiaodi Sun | |||
Title: | ||||
/s/ Yang Jianyu | ||||
Yang Jianyu, in his individual capacity | ||||
DAKETALA INTERNATIONAL INVESTMENT
HOLDINGS LTD. |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Bona Lau | ||||
Bona Lau, in her individual capacity | ||||
NOTABLE ENTERPRISE LIMITED
|
||||
By: | /s/ Bona Lau | |||
Name: | Bona Lau | |||
Title: |
/s/ Cheng Zheng | ||||
Cheng Zheng, in his individual capacity | ||||
CZY INVESTMENTS LIMITED
|
||||
By: | /s/ Cheng Zheng | |||
Name: | Cheng Zheng | |||
Title: | ||||
/s/ Zhang Jing | ||||
Zhang Jing, in his individual capacity | ||||
THOUSAND OCEAN GROUP LIMITED
|
||||
By: | /s/ Zhang Jing | |||
Name: | Zhang Jing | |||
Title: | ||||
/s/ Yap Yaw Kong | ||||
Yap Yaw Kong, in his individual capacity | ||||
TOP MOUNT GROUP LIMITED
|
||||
By: | /s/ Yap Yaw Kong | |||
Name: | Yap Yaw Kong | |||
Title: | ||||
/s/ Liu Haifeng | ||||
Liu Haifeng, in his individual capacity | ||||
CICC SUN COMPANY LIMITED
|
||||
By: | /s/ Shirley Shiyou Chen | |||
Name: | Shirley Shiyou Chen | |||
Title: | ||||
CARLYLE ASIA GROWTH PARTNERS III, L.P. | ||||||
|
||||||
|
By: | CAGP General Partner, L.P., as its General Partner | ||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: |
/s/ Daniel A. DAniello
|
||||
|
Title: | |||||
|
||||||
CAGP III CO-INVESTMENT, L.P. | ||||||
|
||||||
|
By: | CAGP General Partner, L.P., as its General Partner | ||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: | /s/ Daniel A. DAniello | ||||
|
||||||
|
Name: Daniel A. DAniello | |||||
|
Title: |
Page | ||||
ARTICLE 1
|
||||
Definitions
|
||||
|
||||
Section 1.01
. Definitions
|
1 | |||
Section 1.02
. Other Definitional and Interpretative Provisions
|
12 | |||
|
||||
ARTICLE 2
|
||||
Issuance and Subscription
|
||||
|
||||
Section 2.01
. Issuance and Subscription
|
13 | |||
Section 2.02.
Closing
|
13 | |||
Section 2.03.
Additional Subscription Right
|
14 | |||
|
||||
ARTICLE 3
|
||||
Earning Adjustments
|
||||
|
||||
Section 3.01
. Calculation of 2008 and 2009 Net Income
|
14 | |||
Section 3.02
. Adjustment Based on 2008 Net Income
|
14 | |||
Section 3.03.
Adjustment Based on 2009 Net Income
|
15 | |||
Section 3.04.
Procedure of Adjustment
|
15 | |||
Section 3.05
. Termination of Adjustment Rights
|
15 | |||
|
||||
ARTICLE 4
|
||||
Representations and Warranties Regarding the Group
|
||||
|
||||
Section 4.01
. Corporate Status
|
15 | |||
Section 4.02
. Power and Authority; Corporate Authorization
|
16 | |||
Section 4.03
. Enforceability
|
16 | |||
Section 4.04
. Non-contravention
|
17 | |||
Section 4.05
. Governmental Authorization; Third-Party Consent
|
17 | |||
Section 4.06
. Capitalization of the Company
|
17 | |||
Section 4.07
. Capitalization of the PRC Subsidiaries
|
18 | |||
Section 4.08
. Subsidiaries
|
18 | |||
Section 4.09
. Financial Statements
|
19 | |||
Section 4.10
. Books and Records
|
20 | |||
Section 4.11
. No Material Adverse Effect
|
20 | |||
Section 4.12
. No Material Liabilities
|
20 | |||
Section 4.13
. Absence of Changes
|
21 | |||
Section 4.14
. Credit Line
|
23 | |||
Section 4.15
. Compliance with Laws
|
23 | |||
Section 4.16.
Anti-Corruption
|
23 | |||
Section 4.17
. US Office of Foreign Assets Control
|
24 |
i
Page | ||||
Section 4.18
. No Litigation
|
25 | |||
Section 4.19
. Property; Liens
|
25 | |||
Section 4.20
. Tax
|
25 | |||
Section 4.21
. Affiliate Transactions
|
26 | |||
Section 4.22.
Intellectual Property
|
26 | |||
Section 4.23
. Major Contracts
|
27 | |||
Section 4.24
. Insurance Coverage
|
28 | |||
Section 4.25
. Environmental Matters
|
29 | |||
Section 4.26
. Employees, Labor Matters, Etc.
|
30 | |||
Section 4.27
. Permits
|
30 | |||
Section 4.28.
Accounts Receivable
|
31 | |||
Section 4.29
. China Medstar Acquisition
|
31 | |||
Section 4.30.
Disclosure
|
31 | |||
|
||||
ARTICLE 5
|
||||
Representations and Warranties Regarding the Controlling Shareholders
|
||||
|
||||
Section 5.01
. Power and Authority
|
32 | |||
Section 5.02
. Enforceability
|
32 | |||
Section 5.03
. Non-contravention
|
32 | |||
Section 5.04
. Governmental Authorization
|
32 | |||
Section 5.05
. Ownership of Shares
|
32 | |||
|
||||
ARTICLE 6
|
||||
Representations and Warranties of Investors
|
||||
|
||||
Section 6.01
. Corporate Status
|
33 | |||
Section 6.02
. Power And Authority
|
33 | |||
Section 6.03
. Enforceability
|
33 | |||
Section 6.04
. Non-contravention
|
33 | |||
Section 6.05
. Purchase for Investment
|
33 | |||
Section 6.06
. Accredited Investor
|
34 | |||
Section 6.07
. U.S. Person
|
34 | |||
Section 6.08
. Legends
|
34 | |||
Section 6.09
. Litigation
|
34 | |||
|
||||
ARTICLE 7
|
||||
Covenants of the Group and Controlling Shareholders
|
||||
|
||||
Section 7.01
. Conduct of the Company
|
34 | |||
Section 7.02
. Use of Proceeds
|
37 | |||
Section 7.03
. Access to Information; Confidentiality
|
37 | |||
Section 7.04
. Compliance with Law; Consents
|
38 | |||
Section 7.05.
Insurance
|
38 | |||
Section 7.06
. Amended and Restated Shareholders Agreement
|
38 |
ii
Page | ||||
Section 7.07.
Share Charge
|
39 | |||
Section 7.08.
Amendment No.
|
39 | |||
Section 7.09
. Amendment to Convertible Loan Agreement
|
39 | |||
Section 7.10
. Second Amended and Restated Memorandum of Articles
|
39 | |||
Section 7.11
. Adoption of International Accounting Standards
|
39 | |||
Section 7.12
. QPO
|
39 | |||
Section 7.13.
Employment Contracts
|
39 | |||
Section 7.14
. Non-Competition Agreement
|
40 | |||
Section 7.15
. Intellectual Property Rights
|
40 | |||
Section 7.16
. Employee Share Incentive Plans
|
40 | |||
Section 7.17.
Notices of Certain Events
|
41 | |||
Section 7.18.
Schedule of Liabilities
|
42 | |||
Section 7.19.
September A/R Schedule
|
42 | |||
|
||||
ARTICLE 8
|
||||
Covenants of All Parties
|
||||
|
||||
Section 8.01.
Best Efforts; Further Assurance
|
42 | |||
Section 8.02.
Certain Filings
|
42 | |||
Section 8.03.
Public Announcements
|
42 | |||
|
||||
ARTICLE 9
|
||||
Conditions to Closing
|
||||
|
||||
Section 9.01.
Conditions to Obligations of the Investors
|
43 | |||
Section 9.02.
Additional Condition to the Obligations of Starr
|
45 | |||
|
||||
ARTICLE 10
|
||||
Survival; Indemnification
|
||||
|
||||
Section 10.01.
Survival
|
46 | |||
Section 10.02.
Indemnification
|
46 | |||
Section 10.03
. Procedures
|
48 | |||
|
||||
ARTICLE 11
|
||||
Termination
|
||||
|
||||
Section 11.01
. Grounds for Termination
|
48 | |||
Section 11.02
. Effect of Termination
|
48 | |||
|
||||
ARTICLE 12
|
||||
Miscellaneous
|
||||
|
||||
Section 12.01.
Notices
|
49 | |||
Section 12.02.
Amendments and Waivers
|
51 | |||
Section 12.03
. Disclosure Schedule References
|
51 |
iii
Page | ||||
Section 12.04. Expenses
|
51 | |||
Section 12.05.
Successors and Assigns
|
52 | |||
Section 12.06.
Governing Law
|
52 | |||
Section 12.07.
Jurisdiction
|
52 | |||
Section 12.08.
WAIVER OF JURY TRIAL
|
52 | |||
Section 12.09.
Counterparts; Effectiveness; Third Party Beneficiaries
|
53 | |||
Section 12.10.
Entire Agreement
|
53 | |||
Section 12.11.
Severability
|
53 | |||
Section 12.12.
Specific Performance
|
53 | |||
Section 12.13.
Joint Drafting
|
53 |
Exhibit A
|
Form of Amended and Restated Shareholders Agreement | |
Exhibit B
|
Form of Amendment to Convertible Loan Agreement | |
Exhibit C
|
Form of Amendment No. 2 to Series A Share Subscription Agreement | |
Exhibit D
|
Form of Second Amended and Restated Memorandum and Articles
|
|
Exhibit F
|
Form of Share Charge Agreement |
iv
2
3
4
5
6
7
8
9
10
11
Term | Section | |||
Agreement
|
Preamble | |||
Aohua Audited Financial Statements
|
4.09 | (a) | ||
Books and Records
|
4.10 | |||
CAGP
|
Preamble | |||
CAGP Co-Invest
|
Preamble | |||
Capex Budget
|
4.13 | (d) | ||
Carlyle
|
Preamble | |||
China Medstar Acquisition
|
4.29 | |||
Charged Shares
|
7.07 | |||
China Medstar Audited Financial Statements
|
4.09 | (b) | ||
CICC
|
Preamble | |||
Closing
|
2.02 | |||
Company
|
Preamble | |||
Company Securities
|
4.06 | (b) | ||
Damages
|
10.02 | (a) | ||
Indemnified Party
|
10.03 | |||
Indemnifying Party
|
10.03 | |||
Investors
|
Preamble | |||
Key Employees
|
4.26 | (a) | ||
Major Contract
|
4.23 | |||
OFAC
|
4.17 | |||
Permits
|
4.27 | |||
Post-Closing Options Pool
|
7.16 | (b) | ||
Pre-Closing Options Pool
|
7.16 | (a) | ||
Purchased Shares
|
2.01 | |||
Schedule of Liabilities
|
4.12 | |||
September A/R Schedule
|
4.28 | |||
Series B Shares
|
Recitals | |||
Starr
|
Preamble | |||
Subsidiary Securities
|
4.08 | (b) |
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
CONCORD MEDICAL SERVICES HOLDINGS
LIMITED |
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
ASCENDIUM GROUP LIMITED | ||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
CHINA MEDSTAR LIMITED | ||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
CYBER MEDICAL NETWORK LTD. | ||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
OUR MEDICAL SERVICES, LTD. | ||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
CHINA MEDICAL SERVICES (HOLDINGS)
LIMITED |
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: |
SHENZHEN AOHUA MEDICAL SERVICES CO., LTD. | ||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
SHENZHEN AOHUA MEDICAL LEASING AND SERVICES CO., LTD.
|
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
SHANGHAI MEDSTAR LEASING CO., LTD.
|
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
CMS HOSPITAL MANAGEMENT CO., LTD.
|
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: |
/s/ Cheng Zheng | ||
Cheng Zheng, in his individual capacity | ||
|
||
CZY INVESTMENTS LIMITED | ||
|
||
By:
|
/s/ Cheng Zheng | |
|
||
|
Name: Cheng Zheng | |
|
Title: | |
|
||
/s/ Yang Jianyu | ||
Yang Jianyu, in his individual capacity | ||
|
||
DAKETALA INTERNATIONAL INVESTMENT
HOLDINGS LTD. |
||
|
||
By:
|
/s/ Yang Jianyu | |
|
||
|
Name: Yang Jianyu | |
|
Title: | |
|
||
/s/ Steve Sun | ||
Steve Xiaodi Sun, in his individual capacity | ||
|
||
DRAGON IMAGE INVESTMENT LTD. | ||
|
||
By:
|
/s/ Steve Sun | |
|
||
|
Name: Steve Xiaodi Sun | |
|
Title: |
/s/ Zhang Jing | ||
Zhang Jing, in his individual capacity | ||
|
||
THOUSAND OCEAN GROUP LIMITED | ||
|
||
By:
|
/s/ Zhang Jing | |
|
||
|
Name: Zhang Jing | |
|
Title: | |
|
||
/s/ Yap Yaw Kong | ||
Yap Yaw Kong, in his individual capacity | ||
|
||
TOP MOUNT GROUP LIMITED | ||
|
||
By:
|
/s/ Yap Yaw Kong | |
|
||
|
Name: Yap Yaw Kong | |
|
Title: | |
|
||
/s/ Bona Lau | ||
Bona Lau, in her individual capacity | ||
|
||
NOTABLE ENTERPRISE LIMITED | ||
|
||
By:
|
/s/ Bona Lau | |
|
||
|
Name: Bona Lau | |
|
Title: |
/s/ Liu Haifeng | ||
Liu Haifeng, in his individual capacity |
CICC SUN COMPANY LIMITED | ||
|
||
By:
|
/s/ Shirley Shiyou Chen | |
|
||
|
Name: Shirley Shiyou Chen | |
|
Title: Director |
CARLYLE ASIA GROWTH PARTNERS III, L.P. | ||
|
||
By:
|
CAGP General Partner, L.P., as its General Partner | |
|
||
By:
|
CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | |
|
||
By:
|
/s/ Daniel A. DAniello | |
|
||
|
Name: Daniel A. DAniello | |
|
Title: Director | |
|
||
CAGP III CO-INVESTMENT, L.P. | ||
|
||
By:
|
CAGP General Partner, L.P., as its General Partner | |
|
||
By:
|
CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | |
|
||
By:
|
/s/ Daniel A. DAniello | |
|
||
|
Name: Daniel A. DAniello | |
|
Title: Director |
STARR INVESTMENTS CAYMAN II, INC. | ||
|
||
By:
|
/s/ Michael J. Horvath | |
|
||
|
Name: Michael J. Horvath | |
|
Title: Director |
A-1
B-1
C-1
D-1
E-1
S-1
Charged Shares
|
7.07 | (b) |
Part I of the Charged Shares
|
7.07 | (a) | ||
Part II of the Charged Shares
|
7.07 | (b) |
2
3
4
5
CONCORD MEDICAL SERVICES HOLDINGS LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
ASCENDIUM GROUP LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CHINA MEDSTAR LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CYBER MEDICAL NETWORK LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
OUR MEDICAL SERVICES, LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CHINA MEDICAL SERVICES (HOLDINGS) LIMITED
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHENZHEN AOHUA MEDICAL SERVICES CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHENZHEN AOHUA MEDICAL LEASING AND SERVICES CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
SHANGHAI MEDSTAR LEASING CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
CMS HOSPITAL MANAGEMENT CO., LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Cheng Zheng | ||||
Cheng Zheng, in his individual capacity | ||||
CZY INVESTMENTS LIMITED
|
||||
By: | /s/ Cheng Zheng | |||
Name: | Cheng Zheng | |||
Title: | ||||
/s/ Yang Jianyu | ||||
Yang Jianyu, in his individual capacity | ||||
DAKETALA INTERNATIONAL INVESTMENT HOLDINGS LTD.
|
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Steve Sun | ||||
Steve Xiaodi Sun, in his individual capacity | ||||
DRAGON IMAGE INVESTMENT LTD.
|
||||
By: | /s/ Steve Sun | |||
Name: | Steve Xiaodi Sun | |||
Title: | ||||
/s/ Zhang Jing | ||||
Zhang Jing, in his individual capacity | ||||
THOUSAND OCEAN GROUP LIMITED
|
||||
By: | /s/ Zhang Jing | |||
Name: | Zhang Jing | |||
Title: | ||||
/s/ Yap Yaw Kong | ||||
Yap Yaw Kong, in his individual capacity | ||||
TOP MOUNT GROUP LIMITED
|
||||
By: | /s/ Yap Yaw Kong | |||
Name: | Yap Yaw Kong | |||
Title: | ||||
/s/ Bona Lau | ||||
Bona Lau, in her individual capacity | ||||
NOTABLE ENTERPRISE LIMITED
|
||||
By: | /s/ Bona Lau | |||
Name: | Bona Lau | |||
Title: | ||||
/s/ Liu Haifeng | ||||
Liu Haifeng, in his individual capacity | ||||
CICC SUN COMPANY LIMITED
|
||||
By: | /s/ Shirley Shiyou Chen | |||
Name: | Shirley Shiyou Chen | |||
Title: | Director | |||
CARLYLE ASIA GROWTH PARTNERS III, L.P. | ||||||
|
||||||
|
By: |
CAGP General Partner, L.P., as its
General Partner |
||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: | /s/ Daniel A. DAniello | ||||
|
|
|||||
|
Title: Director | |||||
|
||||||
CAGP III CO-INVESTMENT, L.P. | ||||||
|
||||||
|
By: |
CAGP General Partner, L.P., as its
General Partner |
||||
|
||||||
|
By: | CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
|
||||||
|
By: | /s/ Daniel A. DAniello | ||||
|
|
|||||
|
Title: Director |
STARR INVESTMENTS CAYMAN II, INC.
|
||||
By: | /s/ Michael J. Horvath | |||
Name: | Michael J. Horvath | |||
Title: | Director | |||
Page | ||||
ARTICLE 1
|
||||
Definitions
|
||||
|
||||
Section 1.01
. Definitions
|
2 | |||
Section 1.02
. Other Definitional and Interpretative Provisions
|
12 | |||
|
||||
ARTICLE 2
|
||||
Corporate Governance
|
||||
|
||||
Section 2.01
. Composition of the Board
|
13 | |||
Section 2.02.
Removal
|
13 | |||
Section 2.03.
Vacancies
|
14 | |||
Section 2.04.
Meetings
|
14 | |||
Section 2.05.
Action by the Board
|
14 | |||
Section 2.06
. Memorandum and Articles
|
15 | |||
Section 2.07
. Notice of Meeting
|
15 | |||
Section 2.08.
Alternate
|
15 | |||
Section 2.09
. No Liabilities
|
15 | |||
Section 2.10
. Directors Indemnification; Insurance
|
16 | |||
Section 2.11
. Subsidiary Governance
|
16 | |||
Section 2.12.
Required Consents
|
16 | |||
Section 2.13
. Nomination of Chief Financial Officer
|
21 | |||
|
||||
ARTICLE 3
|
||||
Restrictions on Transfer
|
||||
|
||||
Section 3.01
. General Restrictions on Transfer
|
21 | |||
Section 3.02
. Restrictions on Transfer
|
21 | |||
|
||||
ARTICLE 4
|
||||
Preemptive Rights; Rights of First Refusal; Rights of First Offer; Tag-
along Rights; Put Rights |
||||
|
||||
Section 4.01.
Preemptive Rights
|
23 | |||
Section 4.02
. Right of First Refusal
|
24 | |||
Section 4.03
. Rights of First Offer
|
27 | |||
Section 4.04.
Tag-Along Rights
|
28 | |||
Section 4.05
. Drag-Along Rights
|
31 | |||
Section 4.06
. Put Rights
|
34 |
Page | ||||
ARTICLE 5
|
||||
Registration Rights
|
||||
|
||||
Section 5.01.
Right to Participate in the QPO
|
36 | |||
Section 5.02.
Registration Rights after the QPO
|
37 | |||
Section 5.03.
Registration Procedures
|
37 | |||
Section 5.04.
Indemnification by the Company
|
41 | |||
Section 5.05.
Indemnification by Participating Shareholders
|
41 | |||
Section 5.06.
Conduct of Indemnification Proceedings
|
41 | |||
Section 5.07.
Contribution
|
42 | |||
Section 5.08.
Other Indemnification
|
43 | |||
Section 5.09.
Cooperation by the Company
|
43 | |||
|
||||
ARTICLE 6
|
||||
Certain Covenants and Agreements
|
||||
|
||||
Section 6.01.
Confidentiality
|
43 | |||
Section 6.02.
Information Rights
|
45 | |||
Section 6.03.
Inspection Right
|
47 | |||
Section 6.04
. Books and Records
|
47 | |||
Section 6.05.
Related Party Transactions
|
47 | |||
Section 6.06
. QPO
|
48 | |||
Section 6.07.
Notice by Controlling Shareholders
|
48 | |||
Section 6.08
. Internal Control
|
48 | |||
Section 6.09
. Rights upon Resignation of Key Man
|
48 | |||
Section 6.10
. Conflicting Agreements
|
49 | |||
|
||||
ARTICLE 7
|
||||
Miscellaneous
|
||||
|
||||
Section 7.01
. Binding Effect; Assignability; Benefit
|
49 | |||
Section 7.02.
Notices
|
50 | |||
Section 7.03.
Waiver; Amendment; Termination
|
52 | |||
Section 7.04.
Fees and Expenses
|
52 | |||
Section 7.05.
Governing Law
|
52 | |||
Section 7.06.
Jurisdiction
|
52 | |||
Section 7.07.
WAIVER OF JURY TRIAL
|
53 | |||
Section 7.08.
Specific Enforcement
|
53 | |||
Section 7.09.
Counterparts; Effectiveness
|
53 | |||
Section 7.10.
Entire Agreement
|
53 | |||
Section 7.11.
Severability
|
54 | |||
Section 7.12.
Joint Drafting
|
54 | |||
|
||||
Exhibit A Joinder Agreement
|
ii
2
3
4
5
6
7
8
9
10
Term | Section | |||
Agreement
|
Preamble | |||
CAGP
|
Preamble | |||
CAGP Co-Invest
|
Preamble | |||
Carlyle
|
Preamble | |||
Carlyle Director
|
2.01 | (a) | ||
CICC
|
Preamble | |||
CICC Director
|
2.01 | (a) | ||
CICC Sun
|
Preamble | |||
Company
|
Preamble | |||
Confidential Information
|
6.01 | (b) | ||
Damages
|
5.04 | |||
Drag-Along Portion
|
4.05 | (a) | ||
Drag-Along Rights
|
4.05 | (a) | ||
Drag-Along Sale
|
4.05 | (a) | ||
Drag-Along Sale Notice
|
4.05 | (a) | ||
Drag-Along Sale Notice Period
|
4.05 | (a) | ||
Drag-Along Sale Price
|
4.05 | (a) | ||
Drag-Along Seller
|
4.05 | (a) | ||
Drag-Along Transferee
|
4.05 | (a) | ||
Dragged Shareholders
|
4.05 | (a) | ||
Exercise Notice
|
4.01 | (b) | ||
Existing Shareholders Agreement
|
Recitals | |||
Indemnified Party
|
5.06 | |||
Indemnifying Party
|
5.06 | |||
Inspectors
|
5.03 | (f) | ||
Investors
|
Preamble | |||
Investors Directors
|
2.01 | (a) | ||
Issuance Notice
|
4.01 | (a) | ||
Major Shareholder
|
4.01 | (a) | ||
Maximum Offering Size
|
5.01 | (b) | ||
Original Shareholders Agreement
|
Recitals | |||
Perfect Key
|
Preamble | |||
Piggyback Registration
|
5.01 | (a) | ||
Pro Rata Share
|
4.01 | (a) | ||
Purchaser
|
4.06 | (b) | ||
Put Interest
|
4.06 | (b) | ||
Put Notice
|
4.06 | (c) | ||
Put Price
|
4.06 | (d) |
11
Term | Section | |||
Put Right
|
4.06 | (b) | ||
Putting Shareholder
|
4.06 | (b) | ||
Records
|
5.03 | (f) | ||
Related Party
|
2.12(hh) | |||
Related Party Transactions
|
2.12(hh) | |||
Replacement Nominee
|
2.03 | (a) | ||
Representatives
|
6.01 | (b) | ||
ROFO Non-Selling Shareholders
|
4.03 | (a) | ||
ROFO Offer Notice
|
4.03 | (a) | ||
ROFO Offer Period
|
4.03 | (b) | ||
ROFO Offer Price
|
4.03 | (a) | ||
ROFO Offered Securities
|
4.03 | (a) | ||
ROFO Seller
|
4.03 | (a) | ||
ROFR Non-Selling Shareholders
|
4.02 | (a) | ||
ROFR Offer
|
4.02 | (a) | ||
ROFR Offer Notice
|
4.02 | (a) | ||
ROFR Offer Pro Rata Portion
|
4.02 | (b) | ||
ROFR Offer Price
|
4.02 | (a) | ||
ROFR Offered Securities
|
4.02 | (a) | ||
ROFR Shareholder
|
4.02 | (a) | ||
ROFR Seller
|
4.02 | (a) | ||
Series B Shares
|
Recitals | |||
Series B Subscription Agreement
|
Recitals | |||
Starr
|
Preamble | |||
Starr Director
|
2.01 | (a) | ||
Tag-Along Notice
|
4.04 | (a) | ||
Tag-Along Notice Period
|
4.04 | (a) | ||
Tag-Along Offer
|
4.04 | (a) | ||
Tag-Along Portion
|
4.04 | (a) | ||
Tag-Along Response Notice
|
4.04 | (a) | ||
Tag-Along Right
|
4.04 | (a) | ||
Tag-Along Sale
|
4.04 | (a) | ||
Tag-Along Seller
|
4.04 | (a) | ||
Tagging Person
|
4.04 | (a) | ||
Top Management
|
2.12 | (f) |
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
CONCORD MEDICAL SERVICES
HOLDINGS LIMITED |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: | ||||
/s/ Cheng Zheng | ||||
Cheng Zheng, in his individual capacity | ||||
CZY INVESTMENTS LIMITED
|
||||
By: | /s/ Cheng Zheng | |||
Name: | Cheng Zheng | |||
Title: | ||||
/s/ Yang Jianyu | ||||
Yang Jianyu, in his individual capacity | ||||
DAKETALA INTERNATIONAL
INVESTMENT HOLDINGS LTD. |
||||
By: | /s/ Yang Jianyu | |||
Name: | Yang Jianyu | |||
Title: |
/s/ Steve Sun | ||||
Steven Xiaodi Sun, in his individual
capacity |
||||
DRAGON IMAGE INVESTMENT LTD.
|
||||
By: | /s/ Steve Sun | |||
Name: | Steven Xiaodi Sun | |||
Title: | ||||
/s/ Zhang Jing | ||||
Zhang Jing, in his individual capacity | ||||
THOUSAND OCEAN GROUP
LIMITED |
||||
By: | /s/ Zhang Jing | |||
Name: | Zhang Jing | |||
Title: | ||||
/s/ Yap Yaw Kong | ||||
Yap Yaw Kong, in his individual capacity | ||||
TOP MOUNT GROUP LIMITED
|
||||
By: | /s/ Yap Yaw Kong | |||
Name: | Yap Yaw Kong | |||
Title: |
/s/ Liu Haifeng | ||||
Liu Haifeng, in his individual capacity | ||||
/s/ Bona Lau | ||||
Bona Lau, in her individual capacity | ||||
NOTABLE ENTERPRISE LIMITED
|
||||
By: | /s/ Liu Haifeng | |||
Name: | Liu Haifeng | |||
Title: | ||||
GRAND BEST GROUP LIMITED | ||||||
|
||||||
|
By: | /s/ Shi Bo Tao | ||||
|
Name: |
|
||||
|
Title: | |||||
|
||||||
SINO PRIME INVESTMENTS
LIMITED |
||||||
|
||||||
|
By: | /s/ Sirong Tian | ||||
|
||||||
|
Name: | |||||
|
Title: | |||||
|
||||||
LATEK CORPORATION | ||||||
|
||||||
|
By: | /s/ Xiaogang Wang | ||||
|
||||||
|
Name: | |||||
|
Title: |
GENIUS ASPECT INVESTMENT LTD. | ||||||
|
||||||
|
By: | /s/ Peipei Zhang | ||||
|
||||||
|
Name: | |||||
|
Title: | |||||
|
||||||
STAR RISING LTD. | ||||||
|
||||||
|
By: | /s/ Wenqing Tan | ||||
|
||||||
|
Name: | |||||
|
Title: | |||||
|
||||||
HOMERUN TECHNOLOGY LTD. | ||||||
|
||||||
|
By: | /s/ Liwen Wang | ||||
|
||||||
|
Name: | |||||
|
Title: | |||||
|
||||||
SINO FIRST HOLDINGS LTD. | ||||||
|
||||||
|
By: | /s/ Wenqing Tan | ||||
|
||||||
|
Name: | |||||
|
Title: | |||||
|
||||||
JIA INVESTMENT CO., LTD. | ||||||
|
||||||
|
By: | /s/ Chang Chia-Yue | ||||
|
||||||
|
Name: | |||||
|
Title: |
CICC SUN COMPANY LIMITED | ||||||
|
||||||
|
By: | /s/ Shirley Shiyou Chen | ||||
|
||||||
|
Name: Shirley Shiyou Chen | |||||
|
Title: | |||||
|
||||||
PERFECT KEY HOLDINGS LIMITED | ||||||
|
||||||
|
By: | /s/ Shirley Shiyou Chen | ||||
|
||||||
|
Name: Shirley Shiyou Chen | |||||
|
Title: |
CARLYLE ASIA GROWTH
PARTNERS III, L.P. |
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By: |
CAGP General Partner, L.P., as its
General Partner |
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By: |
CAGP, Ltd., as the General Partner of
CAGP General Partner, L.P. |
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By: | /s/ Daniel A. DAniello | ||||
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Name: Daniel A. DAniello | |||||
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Title: Director | |||||
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CAGP III CO-INVESTMENT, L.P. | ||||||
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By: |
CAGP General Partner, L.P., as its
General Partner |
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By: |
CAGP, Ltd., as the General Partner of
CAGP General Partner, L.P. |
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By: | /s/ Daniel A. DAniello | ||||
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Name: Daniel A. DAniello | |||||
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Title: Director |
STARR INVESTMENTS CAYMAN II, INC. | ||||||
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By: | /s/ Michael J. Horvath | ||||
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Name: Michael J. Horvath | |||||
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Title: Director |
[NAME OF JOINING PARTY] | ||||||
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By: | |||||
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Title: | |||||
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Address for Notices: |
(1) | CZY Investments Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 109,736 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1
INTERPRETATION
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
has the meaning specified in the Shareholders
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means this share charge;
means all of the Charged Shares and all dividends or other
distributions, interest and other moneys paid or payable
after the date hereof in connection therewith and all
interests in and all rights accruing at any time to or in
respect of all or any of the Charged Shares and all and any
other property that may at any time be received or
receivable by or otherwise distributed to the Chargor in
respect of or in substitution for, or in addition to, or in
exchange for, or on account of, any of the foregoing,
including, without limitation, any shares or other
securities resulting from the division, consolidation,
change, conversion or reclassification of any of the
Charged Shares, or the reorganization or amalgamation of
the Company with any other body corporate, or the
occurrence of any event which results in the substitution
or exchange of the Charged Shares;
means 21,948 Ordinary Shares of the Company registered
in the name of the Chargor as legal and beneficial owner
thereof;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of
them;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
Ordinary Shares
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ordinary shares of par value US$0.01 each of the Company; | |
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Parties
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means the parties to this Charge collectively; Party means any one of them; | |
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Pre-Closing Offshore
Acquisition
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has the meaning specified in Clause 3.1.1; | |
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Secured Obligations
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means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1; | |
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Security Interest
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means any charge, mortgage, pledge, lien, security interest or other encumbrance; | |
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Security Period
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means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | |
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Shareholders Agreement
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means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | |
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Third-Party Transferee
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has the meaning specified in Clause 3.1.1. |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; | ||
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and |
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2 | CHARGORS REPRESENTATIONS AND WARRANTIES |
other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | ||
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. |
3 | CHARGORS COVENANTS |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition and the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in |
such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and | |||
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2, and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
the obligations in Clauses 3.1.1, 3.1.2 and 3.1.3 collectively, the Secured Obligations. | ||
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; | |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4 | SECURITY | |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; | ||
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and |
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2) ; or |
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. |
5 | DEALINGS WITH CHARGED PROPERTY | |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. | ||
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. | |
6 | PRESERVATION OF SECURITY | |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
The Chargor shall hold in trust for the Chargees and forthwith pay or transfer (as appropriate) to the Chargees any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in |
Clause 5.1.2) or benefit of such security, indemnity or claim in fact received by the Chargor. | ||
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. | |
7 | ENFORCEMENT OF SECURITY | |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
PROVIDED THAT notwithstanding any other provision of this Charge, the Chargees may only exercise their rights under Clauses 7.1.5 and 7.1.6 in respect of such number of Charged Shares not exceeding the aggregate number of Ordinary Shares that the Chargor has failed to transfer (the Default Shares) to the Chargees or any of them under Clause |
3.1 in satisfaction of the Secured Obligations with respect to all and/or any of the Chargees. |
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. | |
8 | FURTHER ASSURANCES | |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
in any such case forthwith upon demand by the Chargees and at the expense of the Chargor. |
8.2 | Without limitation to the generality of Clause 8.1, the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. | |
9 | INDEMNITIES | |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. | |
11 | EXPENSES | |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: |
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. | |
12 | NOTICES |
14 | MISCELLANEOUS | |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. |
15 | LAW AND JURISDICTION |
The Common Seal of
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CZY INVESTMENTS LIMITED
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was hereunto affixed in the
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presence of:
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By:
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/s/ Cheng Zheng | |
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Name: Cheng Zheng | |
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Title: Director | |
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By:
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/s/ Shi Bo Tao | |
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Name: Shi Bo Tao | |
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(Witness) |
Executed as a deed by
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For and on behalf of
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CICC SUN COMPANY LIMITED
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in the presence of:-
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By:
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/s/ Shirley Chen | |
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Name: Shirley Chen | |
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Title: Director |
By:
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/s/ Xin, Jie | |
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Name: Xin, Jie |
Executed as a deed by
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For and on behalf of
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CARLYLE ASIA GROWTH PARTNERS III, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |
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Name: Daniel A. DAniello | |
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Title: Director |
Executed as a deed by
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For and on behalf of
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CAGP III CO-INVESTMENT, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |
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Name: Daniel A. DAniello | |
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Title: Director |
(1) | Daketala International Investment Holdings Ltd., a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 84,530 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1
INTERPRETATION
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
has the meaning specified in the Shareholders
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means this share charge;
means all of the Charged Shares and all dividends or
other distributions, interest and other moneys paid or
payable after the date hereof in connection therewith
and all interests in and all rights accruing at any time to
or in respect of all or any of the Charged Shares and all
and any other property that may at any time be received
or receivable by or otherwise distributed to the Chargor
in respect of or in substitution for, or in addition to, or
in exchange for, or on account of, any of the foregoing,
including, without limitation, any shares or other
securities resulting from the division, consolidation,
change, conversion or reclassification of any of the
Charged Shares, or the reorganization or amalgamation
of the Company with any other body corporate, or the
occurrence of any event which results in the
substitution or exchange of the Charged Shares;
means 16,906 Ordinary Shares of the Company
registered in the name of the Chargor as legal and
beneficial owner thereof;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of
them;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
Ordinary Shares
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ordinary shares of par value US$0.01 each of the Company; | |
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Parties
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means the parties to this Charge collectively; Party means any one of them; | |
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Pre-Closing Offshore
Acquisition
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has the meaning specified in Clause 3.1.1 ; | |
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Secured Obligations
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means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1 ; | |
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Security Interest
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means any charge, mortgage, pledge, lien, security interest or other encumbrance; | |
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Security Period
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means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | |
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Shareholders Agreement
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means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | |
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Third-Party Transferee
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has the meaning specified in Clause 3.1.1 . |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; |
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and | ||
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2 | CHARGORS REPRESENTATIONS AND WARRANTIES |
2.1 | the authorised share capital of the Company consists of the shares described in Recital (C) hereof and such shares are beneficially owned and registered as described in the said recital; | |
2.2 | the Chargor is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands; | |
2.3 | entry into this Charge by the Chargor and enforcement hereof by the Chargees will not contravene the terms of any agreement to which the Chargor is bound or to which the Charged Shares are subject or the memorandum and articles of association of the Company; | |
2.4 | the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption and the Charged Shares are fully paid up and are not and will not be liable to any future call, assessment or demand of any sort; | |
2.5 | the Charged Shares are duly authorised, validly issued and fully paid; | |
2.6 | no moneys or liabilities are outstanding or payable with respect to the Charged Shares; | |
2.7 | the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge; | |
2.8 | this Charge creates those Security Interests it purports to create and is not liable to be avoided or otherwise set aside on liquidation, administration or otherwise; | |
2.9 | this Charge constitutes the Chargors legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors rights generally; |
2.10 | the entry into and performance by the Chargor of this Charge does not violate (i) any law or regulation of any governmental or official authority, or (ii) any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | |
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. | |
3 | CHARGORS COVENANTS |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition and |
the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and |
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2 , and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
the obligations in Clauses 3.1.1, 3.1.2 and 3.1.3 collectively, the Secured Obligations. | ||
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; | |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4 | SECURITY | |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; | ||
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and |
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2 ); or |
4.5.3 | do or cause or permit to be done anything which may in any way affect, depreciate, jeopardize or otherwise prejudice the market value of the Charged Shares or its rights with respect thereto; | ||
4.5.4 | vote in respect of the Charged Shares or receive any dividends or other distributions paid by the Company in respect of the Charged Shares, |
in any such case without the prior consent in writing of the Chargees. | ||
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. | |
5 | DEALINGS WITH CHARGED PROPERTY | |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. |
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. | |
6 | PRESERVATION OF SECURITY | |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. | |
7 | ENFORCEMENT OF SECURITY | |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. | |
8 | FURTHER ASSURANCES | |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
8.2 | Without limitation to the generality of Clause 8.1 , the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. | |
9 | INDEMNITIES | |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8 ) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. | |
11 | EXPENSES | |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: |
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. | |
12 | NOTICES |
14 | MISCELLANEOUS | |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. | |
15 | LAW AND JURISDICTION |
The Common Seal of
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DAKETALA INTERNATIONAL INVESTMENT HOLDINGS LTD.
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was hereunto affixed in the
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presence of:
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By:
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/s/ Yang Jianyu | |
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Name: Yang Jianyu | |
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Title: Director | |
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By:
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/s/ Shi Bo Tao | |
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Name: Shi Bo Tao | |
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(Witness) |
Executed as a deed by
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For and on behalf of
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CICC SUN COMPANY LIMITED
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in the presence of:-
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By:
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/s/ Shirley Chen | |
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Name: Shirley Chen | |
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Title: Director |
By:
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/s/ Xin, Jie | |
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Name: Xin, Jie |
Executed as a deed by
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For and on behalf of
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CARLYLE ASIA GROWTH PARTNERS III, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |
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Name: Daniel A. DAniello | |
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Title: Director |
Executed as a deed by
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For and on behalf of
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CAGP III CO-INVESTMENT, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |
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Name: Daniel A. DAniello | |
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Title: Director |
(1) | Dragon Image Investment Ltd., a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 54,024 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1
INTERPRETATION
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
has the meaning specified in the Shareholders Agreement;
has the meaning specified in the Share Subscription
Agreement;
means this share charge;
means all of the Charged Shares and all dividends or
other distributions, interest and other moneys paid or
payable after the date hereof in connection therewith
and all interests in and all rights accruing at any time
to or in respect of all or any of the Charged Shares and
all and any other property that may at any time be
received or receivable by or otherwise distributed to
the Chargor in respect of or in substitution for, or in
addition to, or in exchange for, or on account of, any
of the foregoing, including, without limitation, any
shares or other securities resulting from the division,
consolidation, change, conversion or reclassification of
any of the Charged Shares, or the reorganization or
amalgamation of the Company with any other body
corporate, or the occurrence of any event which results
in the substitution or exchange of the Charged Shares;
means 10,805 Ordinary Shares of the Company registered
in the name of the Chargor as legal and beneficial owner
thereof;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of them;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
Ordinary Shares
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ordinary shares of par value US$0.01 each of the Company; | |
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Parties
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means the parties to this Charge collectively; Party means any one of them; | |
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Pre-Closing Offshore
Acquisition |
has the meaning specified in Clause 3.1.1 ; | |
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Secured Obligations
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means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1 ; | |
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Security Interest
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means any charge, mortgage, pledge, lien, security interest or other encumbrance; | |
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Security Period
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means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | |
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Shareholders Agreement
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means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | |
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Third-Party Transferee
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has the meaning specified in Clause 3.1.1 . |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; |
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and | ||
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2 | CHARGORS REPRESENTATIONS AND WARRANTIES |
2.1 | the authorised share capital of the Company consists of the shares described in Recital (C) hereof and such shares are beneficially owned and registered as described in the said recital; | |
2.2 | the Chargor is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands; | |
2.3 | entry into this Charge by the Chargor and enforcement hereof by the Chargees will not contravene the terms of any agreement to which the Chargor is bound or to which the Charged Shares are subject or the memorandum and articles of association of the Company; | |
2.4 | the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption and the Charged Shares are fully paid up and are not and will not be liable to any future call, assessment or demand of any sort; | |
2.5 | the Charged Shares are duly authorised, validly issued and fully paid; | |
2.6 | no moneys or liabilities are outstanding or payable with respect to the Charged Shares; | |
2.7 | the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge; | |
2.8 | this Charge creates those Security Interests it purports to create and is not liable to be avoided or otherwise set aside on liquidation, administration or otherwise; | |
2.9 | this Charge constitutes the Chargors legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors rights generally; |
2.10 | the entry into and performance by the Chargor of this Charge does not violate (i) any law or regulation of any governmental or official authority, or (ii) any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | |
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. |
3 | CHARGORS COVENANTS |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, |
dispute or litigation in connection with any Pre-Closing Offshore Acquisition and the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and | |||
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2 , and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
the obligations in Clauses 3.1.1, 3.1.2 and 3.1.3 collectively, the Secured Obligations. | ||
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4 | SECURITY |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; |
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and | ||
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2 ); or |
4.5.3 | do or cause or permit to be done anything which may in any way affect, depreciate, jeopardize or otherwise prejudice the market value of the Charged Shares or its rights with respect thereto; | ||
4.5.4 | vote in respect of the Charged Shares or receive any dividends or other distributions paid by the Company in respect of the Charged Shares, |
in any such case without the prior consent in writing of the Chargees. | ||
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. |
5 | DEALINGS WITH CHARGED PROPERTY |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. | ||
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. |
6 | PRESERVATION OF SECURITY |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
The Chargor shall hold in trust for the Chargees and forthwith pay or transfer (as appropriate) to the Chargees any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in |
Clause 5.1.2) or benefit of such security, indemnity or claim in fact received by the Chargor. | ||
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. |
7 | ENFORCEMENT OF SECURITY |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
PROVIDED THAT notwithstanding any other provision of this Charge, the Chargees may only exercise their rights under Clauses 7.1.5 and 7.1.6 in respect of such number of Charged Shares not exceeding the aggregate number of Ordinary Shares that the Chargor has failed to transfer (the Default Shares) to the Chargees or any of them under Clause |
3.1 in satisfaction of the Secured Obligations with respect to all and/or any of the Chargees. | ||
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. |
8 | FURTHER ASSURANCES | |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
in any such case forthwith upon demand by the Chargees and at the expense of the Chargor. |
8.2 | Without limitation to the generality of Clause 8.1 , the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. | |
9 | INDEMNITIES | |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8 ) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. | |
11 | EXPENSES | |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: |
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, |
and in any case referred to in Clauses 11.1.3 and 11.1.4 regardless of whether the same is actually implemented, completed or granted, as the case may be. |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. | |
12 | NOTICES |
14 | MISCELLANEOUS | |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. | |
15 | LAW AND JURISDICTION |
The Common Seal of
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DRAGON IMAGE INVESTMENT LTD.
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was hereunto affixed in the
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presence of:
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By:
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/s/ Steven Xiaodi Sun | |||
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Title: Director | |||
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By:
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/s/ Shi Bo Tao | |||
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(Witness) |
Executed as a deed by
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For and on behalf of
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CICC SUN COMPANY LIMITED
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in the presence of:-
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By:
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/s/ Shirley Chen | |||
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Title: Director |
By:
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/s/ Xin, Jie | |||
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Executed as a deed by
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For and on behalf of
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CARLYLE ASIA GROWTH PARTNERS III, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
Executed as a deed by
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For and on behalf of
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CAGP III CO-INVESTMENT, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
(1) | Notable Enterprise Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 217,435 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1
INTERPRETATION
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
Aggregate Ownership
has the meaning specified in the Shareholders
Agreement;
Business Day
has the meaning specified in the Share Subscription
Agreement;
Charge
means this share charge;
Charged Property
means all of the Charged Shares and all dividends or
other distributions, interest and other moneys paid or
payable after the date hereof in connection therewith
and all interests in and all rights accruing at any time to
or in respect of all or any of the Charged Shares and all
and any other property that may at any time be received
or receivable by or otherwise distributed to the Chargor
in respect of or in substitution for, or in addition to, or
in exchange for, or on account of, any of the foregoing,
including, without limitation, any shares or other
securities resulting from the division, consolidation,
change, conversion or reclassification of any of the
Charged Shares, or the reorganization or amalgamation
of the Company with any other body corporate, or the
occurrence of any event which results in the
substitution or exchange of the Charged Shares;
Charged Shares
means 43,487 Ordinary Shares of the Company
registered in the name of the Chargor as legal and
beneficial owner thereof;
Closing Date
has the meaning specified in the Share Subscription
Agreement;
Controlling Shareholders
has the meaning specified in the Share Subscription
Agreement;
Event of Default
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of
them;
Fully Diluted
has the meaning specified in the Share Subscription
Agreement;
Group Company
has the meaning specified in the Share Subscription
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Agreement; | |||
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Ordinary Shares | ordinary shares of par value US$0.01 each of the Company; | ||
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Parties | means the parties to this Charge collectively; Party means any one of them; | ||
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Pre-Closing Offshore
Acquisition |
has the meaning specified in Clause 3.1.1 ; | ||
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Secured Obligations | means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1 ; | ||
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Security Interest | means any charge, mortgage, pledge, lien, security interest or other encumbrance; | ||
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Security Period | means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | ||
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Shareholders Agreement | means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | ||
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Third-Party Transferee | has the meaning specified in Clause 3.1.1 . |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; |
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and | ||
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2 | CHARGORS REPRESENTATIONS AND WARRANTIES |
2.1 | the authorised share capital of the Company consists of the shares described in Recital (C) hereof and such shares are beneficially owned and registered as described in the said recital; | |
2.2 | the Chargor is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands; | |
2.3 | entry into this Charge by the Chargor and enforcement hereof by the Chargees will not contravene the terms of any agreement to which the Chargor is bound or to which the Charged Shares are subject or the memorandum and articles of association of the Company; | |
2.4 | the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption and the Charged Shares are fully paid up and are not and will not be liable to any future call, assessment or demand of any sort; | |
2.5 | the Charged Shares are duly authorised, validly issued and fully paid; | |
2.6 | no moneys or liabilities are outstanding or payable with respect to the Charged Shares; | |
2.7 | the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge; | |
2.8 | this Charge creates those Security Interests it purports to create and is not liable to be avoided or otherwise set aside on liquidation, administration or otherwise; | |
2.9 | this Charge constitutes the Chargors legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors rights generally; |
2.10 | the entry into and performance by the Chargor of this Charge does not violate (i) any law or regulation of any governmental or official authority, or (ii) any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | |
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. | |
3 | CHARGORS COVENANTS |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition and |
the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and | |||
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2 , and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
the obligations in Clauses 3.1.1, 3.1.2 and 3.1.3 collectively, the Secured Obligations. | ||
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; | |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4 | SECURITY | |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; | ||
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and |
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2 ); or |
4.5.3 | do or cause or permit to be done anything which may in any way affect, depreciate, jeopardize or otherwise prejudice the market value of the Charged Shares or its rights with respect thereto; | ||
4.5.4 | vote in respect of the Charged Shares or receive any dividends or other distributions paid by the Company in respect of the Charged Shares, |
in any such case without the prior consent in writing of the Chargees. | ||
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. | |
5 | DEALINGS WITH CHARGED PROPERTY | |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. | ||
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. | |
6 | PRESERVATION OF SECURITY | |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
The Chargor shall hold in trust for the Chargees and forthwith pay or transfer (as appropriate) to the Chargees any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in |
Clause 5.1.2) or benefit of such security, indemnity or claim in fact received by the Chargor. | ||
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. | |
7 | ENFORCEMENT OF SECURITY | |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
PROVIDED THAT notwithstanding any other provision of this Charge, the Chargees may only exercise their rights under Clauses 7.1.5 and 7.1.6 in respect of such number of Charged Shares not exceeding the aggregate number of Ordinary Shares that the Chargor has failed to transfer (the Default Shares) to the Chargees or any of them under Clause |
3.1 in satisfaction of the Secured Obligations with respect to all and/or any of the Chargees. | ||
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. | |
8 | FURTHER ASSURANCES | |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
in any such case forthwith upon demand by the Chargees and at the expense of the Chargor. |
8.2 | Without limitation to the generality of Clause 8.1 , the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. | |
9 | INDEMNITIES | |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8 ) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. | |
11 | EXPENSES | |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: |
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, |
and in any case referred to in Clauses 11.1.3 and 11.1.4 regardless of whether the same is actually implemented, completed or granted, as the case may be. |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. | |
12 | NOTICES |
14 | MISCELLANEOUS | |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. | |
15 | LAW AND JURISDICTION |
The Common Seal of
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NOTABLE ENTERPRISE LIMITED
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was hereunto affixed in the
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presence of:
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By:
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/s/ Bona Lau | |||
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Title: Director |
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By:
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/s/ Shi Bo Tao | |||
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(Witness) |
Executed as a deed by
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For and on behalf of
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CICC SUN COMPANY LIMITED
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in the presence of:-
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By:
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/s/ Shirley Chen | |||
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Title: Director |
By:
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/s/ Xin, Jie | |||
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Executed as a deed by
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For and on behalf of
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CARLYLE ASIA GROWTH PARTNERS III, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
Executed as a deed by
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For and on behalf of
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CAGP III CO-INVESTMENT, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
(1) | Thousand Ocean Group Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 32,624 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
has the meaning specified in the Shareholders
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means this share charge;
means all of the Charged Shares and all dividends or
other distributions, interest and other moneys paid or
payable after the date hereof in connection therewith
and all interests in and all rights accruing at any time to
or in respect of all or any of the Charged Shares and all
and any other property that may at any time be received
or receivable by or otherwise distributed to the Chargor
in respect of or in substitution for, or in addition to, or
in exchange for, or on account of, any of the foregoing,
including, without limitation, any shares or other
securities resulting from the division, consolidation,
change, conversion or reclassification of any of the
Charged Shares, or the reorganization or amalgamation
of the Company with any other body corporate, or the
occurrence of any event which results in the
substitution or exchange of the Charged Shares;
means 6,525 Ordinary Shares of the Company
registered in the name of the Chargor as legal and
beneficial owner thereof;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of
them;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
Ordinary Shares
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ordinary shares of par value US$0.01 each of the Company; | |
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Parties
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means the parties to this Charge collectively; Party means any one of them; | |
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Pre-Closing Offshore
Acquisition |
has the meaning specified in Clause 3.1.1 ; | |
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Secured Obligations
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means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1 ; | |
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Security Interest
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means any charge, mortgage, pledge, lien, security interest or other encumbrance; | |
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Security Period
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means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | |
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Shareholders Agreement
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means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | |
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Third-Party Transferee
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has the meaning specified in Clause 3.1.1 . |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; |
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and | ||
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2.1 | the authorised share capital of the Company consists of the shares described in Recital (C) hereof and such shares are beneficially owned and registered as described in the said recital; | |
2.2 | the Chargor is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands; | |
2.3 | entry into this Charge by the Chargor and enforcement hereof by the Chargees will not contravene the terms of any agreement to which the Chargor is bound or to which the Charged Shares are subject or the memorandum and articles of association of the Company; | |
2.4 | the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption and the Charged Shares are fully paid up and are not and will not be liable to any future call, assessment or demand of any sort; | |
2.5 | the Charged Shares are duly authorised, validly issued and fully paid; | |
2.6 | no moneys or liabilities are outstanding or payable with respect to the Charged Shares; | |
2.7 | the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge; | |
2.8 | this Charge creates those Security Interests it purports to create and is not liable to be avoided or otherwise set aside on liquidation, administration or otherwise; | |
2.9 | this Charge constitutes the Chargors legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors rights generally; |
2.10 | the entry into and performance by the Chargor of this Charge does not violate (i) any law or regulation of any governmental or official authority, or (ii) any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | |
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition and |
the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and | |||
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2 , and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; | |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; | ||
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and |
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2 ); or |
4.5.3 | do or cause or permit to be done anything which may in any way affect, depreciate, jeopardize or otherwise prejudice the market value of the Charged Shares or its rights with respect thereto; | ||
4.5.4 | vote in respect of the Charged Shares or receive any dividends or other distributions paid by the Company in respect of the Charged Shares, |
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. | ||
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
8.2 | Without limitation to the generality of Clause 8.1 , the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
9.2 | If, under any applicable law or regulation, and whether pursuant to a judgment being made or registered against the Chargor or the bankruptcy or liquidation of the Chargor or for any other reason any payment under or in connection with this Charge is made or falls to be satisfied in a currency (the Payment Currency) other than the currency in which such payment is due under or in connection with this Charge (the Contractual Currency), then to the extent that the amount of such payment actually received by the Chargees when converted into the Contractual Currency at the rate of exchange, falls short of the amount due under or in connection with this Charge, the Chargor, as a separate and independent obligation, shall indemnify and hold harmless the Chargees against the amount of such shortfall. For the purposes of this clause, rate of exchange means the rate at which the Chargees is able on or about the date of such payment to purchase the Contractual Currency with the Payment Currency and shall take into account any premium and other costs of exchange with respect thereto. |
10.1 | The Chargor, by way of security and in order more fully to secure the performance of its obligations hereunder, pursuant to the Power of Attorney Law (1996 Revision) hereby irrevocably appoints each of the Chargees and the persons deriving title under it jointly and also severally to be its attorney: |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8 ) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: | ||
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, | ||
and in any case referred to in Clauses 11.1.3 and 11.1.4 regardless of whether the same is actually implemented, completed or granted, as the case may be. |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. |
13.1 | This Charge shall be binding upon and shall inure to the benefit of the Chargor and the Chargees and each of their respective successors and (subject as hereinafter provided) assigns and references in this Charge to any of them shall be construed accordingly. | |
13.2 | The Chargor may not assign or transfer all or any part of its rights and/or obligations under this Charge. | |
13.3 | The Chargees may not assign or transfer all or any part of its rights or obligations under this Charge to any assignee or transferee without the consent of the Chargor, such consent not to be unreasonably withheld, provided that no such consent shall be required if an Event of Default affecting the Chargor has occurred and is continuing. The Chargees shall notify the Chargor promptly following any such assignment or transfer. |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. |
The Common Seal of
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THOUSAND OCEAN GROUP LIMITED
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was hereunto affixed in the
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presence of:
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By:
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/s/ Zhang Jing | |||
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Title: Director | |||
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By:
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/s/ Shi Bo Tao | |||
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(Witness) |
Executed as a deed by
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For and on behalf of
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CICC SUN COMPANY LIMITED
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in the presence of:-
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By:
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/s/ Shirley Chen | |||
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Title: Director |
By:
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/s/ Xin, Jie | |||
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Executed as a deed by
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For and on behalf of
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CARLYLE ASIA GROWTH PARTNERS III, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
Executed as a deed by
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For and on behalf of
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CAGP III CO-INVESTMENT, L.P.
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in the presence of:-
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By:
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/s/ Daniel A. DAniello | |||
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Title: Director |
(1) | Top Mount Group Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor); |
(2) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(3) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(4) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, and together with CAGP, Carlyle); | |
(5) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands (Starr, and together with CICC and Carlyle, the Chargees). |
(A) | By a share subscription agreement dated October 10, 2008, as amended on October 20, 2008 (the Share Subscription Agreement) made between, inter alia, the Chargor, the Chargees, the Company (as defined below) and other parties specified therein, the Chargees subscribed for series B redeemable convertible preferred shares of par value US$0.01 each of the Company (the Series B Shares) on the terms and conditions therein set out. | |
(B) | As security for the obligations of the Chargor under Article 3 of the Share Subscription Agreement, the Chargor has agreed to charge, inter alia, its interest in certain of the shares beneficially owned by the Chargor in Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands (the Company). | |
(C) | The Company is authorised to issue 5,000,000 shares of a par value of US$0.01 each of which 4,500,000 shares are designated as ordinary shares (the Ordinary Shares), 200,000 are series A redeemable convertible preferred shares (the Series A Shares) and 300,000 are Series B Shares. 5,932 Ordinary Shares have been issued to and fully paid by, and are beneficially owned by and registered in the name of, the Chargor. | |
(D) | Pursuant to Section 7.07(b) of the Share Subscription Agreement, the Chargor shall execute this Charge in favour of the Chargees and the same is executed by the Chargor in consideration of the Chargees agreeing to enter into the Share Subscription Agreement and for other good and valuable consideration (the sufficiency of which the Chargor hereby acknowledges). |
1.1
In this Charge, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
has the meaning specified in the Shareholders
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means this share charge;
means all of the Charged Shares and all dividends or
other distributions, interest and other moneys paid or
payable after the date hereof in connection therewith
and all interests in and all rights accruing at any time to
or in respect of all or any of the Charged Shares and all
and any other property that may at any time be received
or receivable by or otherwise distributed to the Chargor
in respect of or in substitution for, or in addition to, or
in exchange for, or on account of, any of the foregoing,
including, without limitation, any shares or other
securities resulting from the division, consolidation,
change, conversion or reclassification of any of the
Charged Shares, or the reorganization or amalgamation
of the Company with any other body corporate, or the
occurrence of any event which results in the
substitution or exchange of the Charged Shares;
means 1,187 Ordinary Shares of the Company
registered in the name of the Chargor as legal and
beneficial owner thereof;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
means the failure by the Chargor to satisfy the Secured
Obligations with respect to the Chargees or any of
them;
has the meaning specified in the Share Subscription
Agreement;
has the meaning specified in the Share Subscription
Agreement;
Ordinary Shares
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ordinary shares of par value US$0.01 each of the Company; | |
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Parties
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means the parties to this Charge collectively; Party means any one of them; | |
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Pre-Closing Offshore
Acquisition
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has the meaning specified in Clause 3.1.1 ; | |
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Secured Obligations
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means the obligations of the Chargor to deliver Ordinary Shares to the Chargees or any of them as specified in Clause 3.1 ; | |
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Security Interest
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means any charge, mortgage, pledge, lien, security interest or other encumbrance; | |
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Security Period
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means the period commencing on the date of execution of this Charge and terminating upon the earliest to occur of (i) November 10, 2014, (ii) the date on which Aggregate Ownership of Ordinary Shares by each Chargee is less than 20% of such Chargees Initial Ownership (as defined in the Shareholders Agreement) of Ordinary Shares and (iii) the date on which a Singapore law firm delivers a legal opinion to the Chargees, in form and substance satisfactory to each Chargee, with respect to the issuance of Ordinary Shares to certain Controlling Shareholder Holding Companies (as defined in the Share Subscription Agreement) in August 2008; | |
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Shareholders Agreement
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means the Amended and Restated Shareholders Agreement dated October 20, 2008 by and among the Company, the Chargor, the Chargees and other parties specified therein; and | |
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Third-Party Transferee
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has the meaning specified in Clause 3.1.1 . |
1.2 | In this Charge unless the context otherwise requires: |
1.2.1 | references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification); | ||
1.2.2 | references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or paragraphs are, unless otherwise stated, references to sub-clauses of the clauses hereof or paragraphs of the schedule in which the reference appears; |
1.2.3 | references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa; and | ||
1.2.4 | references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; | ||
1.2.5 | references to assets include property, rights and assets of every description; | ||
1.2.6 | references to any document are to be construed as references to such document as amended or supplemented from time to time; and | ||
1.2.7 | the rights, interests and obligations of the Chargees hereunder are joint and are exercisable by the Chargees collectively. |
2.1 | the authorised share capital of the Company consists of the shares described in Recital (C) hereof and such shares are beneficially owned and registered as described in the said recital; | |
2.2 | the Chargor is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands; | |
2.3 | entry into this Charge by the Chargor and enforcement hereof by the Chargees will not contravene the terms of any agreement to which the Chargor is bound or to which the Charged Shares are subject or the memorandum and articles of association of the Company; | |
2.4 | the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption and the Charged Shares are fully paid up and are not and will not be liable to any future call, assessment or demand of any sort; | |
2.5 | the Charged Shares are duly authorised, validly issued and fully paid; | |
2.6 | no moneys or liabilities are outstanding or payable with respect to the Charged Shares; | |
2.7 | the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge; | |
2.8 | this Charge creates those Security Interests it purports to create and is not liable to be avoided or otherwise set aside on liquidation, administration or otherwise; | |
2.9 | this Charge constitutes the Chargors legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors rights generally; |
2.10 | the entry into and performance by the Chargor of this Charge does not violate (i) any law or regulation of any governmental or official authority, or (ii) any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets; | |
2.11 | other than registration of this Charge in the register of charges of the Chargor in accordance with the requirements of the BVI Business Companies Act, 2004, no authorisation, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either the grant by the Chargor of the Security Interests purported to be created in favour of the Chargee under this Charge; or the exercise by the Chargee of any rights or remedies in respect of the Charged Property (whether or not specifically granted or created under this Charge); | |
2.12 | all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect; | |
2.13 | the Chargor has taken all corporate and other action required to approve its execution, delivery and performance of this Charge; and | |
2.14 | the Company is not a land holding corporation for the purposes of the Land Holding Companies Share Transfer Tax Law of the Cayman Islands. |
3.1 | to discharge all obligations and liabilities specified in Section 10.02(c)(vii) of the Share Subscription Agreement at the following times and in the following manner: |
3.1.1 | if any Group Company is required to issue a number of Ordinary Shares to any person (a Third-Party Transferee) pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any acquisition by any Group Company of any person (other than persons established under the Laws of the PRC) which has been consummated prior to the Closing Date (any Pre-Closing Offshore Acquisition) and the Controlling Shareholders, severally and jointly, fail to transfer such number of Ordinary Shares to such Third-Party Transferee in lieu of and on behalf of such Group Company at the per share price and on the date set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, on the Business Day immediately following such date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the aggregate number of Ordinary Shares required to be transferred to such Third-Party Transferee pursuant to such judgment or settlement multiplied by (y) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; | ||
3.1.2 | if any Group Company is required to make any payment in cash to any person pursuant to any arbitral or judicial judgment on, or settlement of, any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition and |
the Controlling Shareholders, severally and jointly, fail to make such payment in lieu of and on behalf of such Group Company by the payment time set forth in such judgment or settlement, the Chargor shall, severally and jointly with other Controlling Shareholders, within 10 Business Days following such payment date, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such payment in US dollars (based on the noon buying rate for purchases of any currency other than US dollars on such payment date published by the Federal Reserve Bank of New York) divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis on such payment date as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such payment date multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such payment date and the denominator of which is the outstanding number of Ordinary Shares on such payment date, calculated on a Fully-Diluted basis; and |
3.1.3 | if any Group Company incurs or suffers any damages arising out of any claim, dispute or litigation in connection with any Pre-Closing Offshore Acquisition, other than those damages described in Clauses 3.1.1 and 3.1.2 , and the Controlling Shareholders, severally and jointly, fail to indemnify the Company pursuant to Section 10.02(c)(vii) of the Share Subscription Agreement by the date of such incurrence or suffering, the Chargor shall, severally and jointly with other Controlling Shareholders, transfer free of charge a number of Ordinary Shares to each Chargee equal to (x) the amount of such damages expressed in US dollars divided by (y) the fair market value of the Ordinary Shares in US dollars on a per share basis calculated as set forth above in Clause 3.1.2 multiplied by (z) a ratio, the numerator of which is the Aggregate Ownership of Ordinary Shares by such Chargee on such date and the denominator of which is the outstanding number of Ordinary Shares on such date, calculated on a Fully-Diluted basis, in each case of sub-clause (x) and (y) as determined by the Controlling Shareholders and the Chargees by mutual agreement or if such mutual agreement cannot be reached within 5 Business Days following such payment date, determined by an independent appraiser satisfactory to the Chargees within 10 Business Days following such date; |
the obligations in Clauses 3.1.1, 3.1.2 and 3.1.3 collectively, the Secured Obligations. | ||
3.2 | that the Chargor will on demand of the Chargees and at the expense of the Chargor, execute and deliver to the Chargees or to such person or persons as the Chargees may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing the payment and discharge of all Secured Obligations, each such additional charge to be in such form as the Chargees may reasonably require; | |
3.3 | that the Chargor shall, on request of the Chargees, provide to the Chargees immediately on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares; | |
3.4 | that the Chargor will not without the prior written consent of the Chargees: |
3.4.1 | permit any person other than the Chargor, the Chargees or any transferee nominated by the Chargees on enforcement of this Charge to be the registered holder of any of the Charged Shares; | ||
3.4.2 | permit any variation of the rights attaching to the Charged Shares; | ||
3.4.3 | take or permit any action which might result in an increase or reduction in the authorised share capital of the Company or the number of shares that the Company is authorised to issue or the issued share or share capital of the Company; | ||
3.4.4 | permit the Company to be continued to another jurisdiction outside of the Cayman Islands; | ||
3.4.5 | effect or permit the appointment of any new or further directors or officers of the Company; | ||
3.4.6 | permit any scheme of arrangement, merger, amalgamation or other reorganisation applicable to the Company; or | ||
3.4.7 | save in accordance with Clause 8.2, permit any amendment to the memorandum or articles of association of the Company without prior written consent of the Chargees. |
4.1 | In consideration of the Chargees agreeing to enter into the Share Subscription Agreement and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargors right, title and interest to and in the Charged Property including (without limitation) all voting and other consensual powers pertaining to the Charged Shares and hereby charges and agrees to charge in favour of the Chargees jointly all of its interest in the Charged Property by way of a first fixed charge. | |
4.2 | The Chargor hereby agrees to deliver, or cause to be delivered, to the Chargees on the date hereof: |
4.2.1 | duly executed undated share transfers in respect of the Charged Shares in favour of the Chargees or their nominees in the form set out in Schedule I; | ||
4.2.2 | an executed undated irrevocable proxy made in respect of the Charged Shares in favour of the Chargees in respect of all general meetings of the Company in the form set out in Schedule II; | ||
4.2.3 | all original share certificates representing, and all other documents, title or evidence of, ownership in relation to the Charged Shares; | ||
4.2.4 | signed, but undated resolutions of the board of directors of the Company in the form set out in Schedule III; and |
4.2.5 | an executed undertaking from the Company to register transfers of the Charged Shares to the Chargees or their nominees in the form set out in Schedule IV dated as of the date hereof (the Undertaking). |
4.3 | The Chargees shall be entitled to: |
4.3.1 | continue to hold any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above until the Charged Shares are released from this Charge and if, for any reason, they release any such document to the Chargor before such time, they may by notice to the Chargor require that such document be redelivered to them and the Chargor shall promptly comply with that requirement or procure that it is complied with; and | ||
4.3.2 | at any time after the Security Interest has become enforceable as provided in Clause 7 , subject to the limitation set out in Clause 7.1 , complete any document delivered to them pursuant to Clauses 4.2.1 through 4.2.5 above in favour of, and register any Charged Share in the names of the Chargees or such other person as they shall select, and the Chargor shall promptly take or procure the taking by all such other persons (including, without limitation, the secretary of the Company) any other action and execute and deliver to the Chargees any other document (in form and substance reasonably satisfactory to each Chargee) which may be reasonably requested by the Chargees in order to enable the Chargees or such other person as they shall select to be registered as the owner of, or otherwise obtain legal title to, any Charged Share; this includes procuring that: |
(A) | those share transfers are duly registered in the shareholder register of the Company; and | ||
(B) | share certificates in the name of the Chargees or such other person as they shall select are delivered to the Chargees. |
4.4 | The Chargor will deliver, or cause to be delivered, to the Chargees immediately upon the issue of any further Charged Shares, the items listed in Clauses 4.2.1 through 4.2.5 (if the documents already provided are not sufficient to cover the further Charged Shares) in respect of all such further Charged Shares. | |
4.5 | The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created) and that it will not: |
4.5.1 | create or suffer the creation of any Security Interests (other than those created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein; or | ||
4.5.2 | sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property (other than with respect to the dividend or distribution payments described in Clause 5.1.2 ); or |
4.5.3 | do or cause or permit to be done anything which may in any way affect, depreciate, jeopardize or otherwise prejudice the market value of the Charged Shares or its rights with respect thereto; | ||
4.5.4 | vote in respect of the Charged Shares or receive any dividends or other distributions paid by the Company in respect of the Charged Shares, |
in any such case without the prior consent in writing of the Chargees. | ||
4.6 | During the Security Period, the Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargees shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof. | |
4.7 | Upon the Chargees being satisfied that the Secured Obligations have been unconditionally and irrevocably paid and discharged in full or upon the expiry of the Security Period, and following a written request therefor from the Chargor, the Chargees will, subject to being indemnified to each of their respective reasonable satisfaction for the costs and expenses incurred by the Chargees in connection therewith, release the Charged Shares (if any as the case may be) and security constituted by this Charge. |
5.1 | Unless and until an Event of Default has occurred: |
5.1.1 | the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Charge; | ||
5.1.2 | the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof; and | ||
5.1.3 | the Chargor shall be entitled to receive all notices pertaining to the Charged Shares. |
5.2 | The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and in an Event of Default, the Chargees may, if they think fit, make such payments or discharge such obligations on behalf of the Chargor. Any sums so paid by the Chargees in respect thereof shall be repayable on demand and, pending such repayment, shall constitute part of the Secured Obligations. | |
5.3 | The Chargees shall not have any duty to ensure that any dividends, interest or other moneys and assets receivable in respect of the Charged Property are duly and punctually paid, received or collected as and when the same become due and payable or to ensure that the correct amounts (if any) are paid or received on or in respect of the Charged Property or to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property paid, distributed, accruing or offered at any time by way of |
redemption bonus, rights, preference, or otherwise on or in respect of, any of the Charged Property. | ||
5.4 | The Chargor hereby authorises the Chargees to arrange at any time and from time to time (whether before or after the occurrence of an Event of Default) for the Charged Property or any part thereof to be registered in the name of the Chargees (or their nominees) thereupon to be held as so registered subject to the terms of this Charge. |
6.1 | It is hereby agreed and declared that: |
6.1.1 | the security created by this Charge shall be held by the Chargees as a continuing security for the payment and discharge of the Secured Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; | ||
6.1.2 | the Chargees shall not be bound to enforce any other security before enforcing the security created by this Charge; | ||
6.1.3 | no delay or omission on the part of the Chargees in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargees may deem expedient; and | ||
6.1.4 | any waiver by the Chargees of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
6.2 | Any settlement or discharge under this Charge between the Chargees and the Chargor shall be conditional upon no security or payment to the Chargees by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced or if the aforesaid security or payment to the Chargees is adversely affected by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the liability of the Chargor under this Charge shall be reinstated or continue and the Chargees shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
6.3 | The rights of the Chargees under this Charge and the Security Interest hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargees or any other person: |
6.3.1 | any time or waiver granted to or composition with the Company or any other person; |
6.3.2 | the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person; | ||
6.3.3 | any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person; | ||
6.3.4 | any amendment or supplement to the Share Subscription Agreement or any other document or security; | ||
6.3.5 | the dissolution, liquidation, amalgamation, reconstruction or reorganisation of the Company or any other person; | ||
6.3.6 | the unenforceability, invalidity or frustration of any obligations of the Company or any other person under the Share Subscription Agreement or any other document or security; or | ||
6.3.7 | any non-observance of any formality or other requirements in respect of any other instrument or any failure to realise the full value of any other security. |
6.4 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargor shall not by virtue of any payment made hereunder on account of the Secured Obligations or by virtue of any enforcement by the Chargees of their rights under, or the security constituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge): |
6.4.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargees or any person; | ||
6.4.2 | exercise any right of contribution from any co-surety liable in respect of the Second Obligation under any other guarantee, security or agreement; | ||
6.4.3 | exercise any right of set-off or counterclaim against the Chargees, the Company or any such co-surety; | ||
6.4.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or | ||
6.4.5 | unless so directed by the Chargees (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargees. |
The Chargor shall hold in trust for the Chargees and forthwith pay or transfer (as appropriate) to the Chargees any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in |
Clause 5.1.2) or benefit of such security, indemnity or claim in fact received by the Chargor. | ||
6.5 | Until the Secured Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargees or until the expiry of the Security Period, the Chargees may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargees for as long as they may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Secured Obligations without being under any intermediate obligation to apply the same or any part thereof in or towards the discharge of such amount. |
7.1 | Upon the occurrence of an Event of Default or a demand being made by the Chargees for the satisfaction of the Secured Obligations with respect to the Chargees or any of them, the Security Interest hereby constituted shall become immediately enforceable by the Chargees and the Chargees may, at any time, without further notice to or consultation with or consent of the Chargor: |
7.1.1 | solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargees may think fit; | ||
7.1.2 | receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargees and paid or transferred to the Chargees on demand; | ||
7.1.3 | if the Chargees elect to, sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargees may deem fit; | ||
7.1.4 | complete the undated blank share transfer forms delivered to the Chargees pursuant to Clause 4.2.1 by dating the same and inserting their names or the names of their nominees as transferees; | ||
7.1.5 | complete the undated resolutions of the board of directors of the Company delivered to the Chargees pursuant to Clause 4.2.4 by dating the same and inserting the names of the transferees and the number of Ordinary Shares to be transferred; and/or | ||
7.1.6 | complete the undated irrevocable proxy delivered to the Chargees pursuant to Clause 4.2.2 by dating the same and inserting the names and addresses of all Chargees or the names and addresses of their respective nominees; |
PROVIDED THAT notwithstanding any other provision of this Charge, the Chargees may only exercise their rights under Clauses 7.1.5 and 7.1.6 in respect of such number of Charged Shares not exceeding the aggregate number of Ordinary Shares that the Chargor has failed to transfer (the Default Shares) to the Chargees or any of them under Clause |
7.2 | The Chargees shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by them under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargees by this Charge or to which the Chargees may at any time be entitled hereunder. | |
7.3 | Upon any sale by the Chargees of the Charged Property or any part thereof by the Chargees, the purchaser shall not be bound to see or enquire whether the Chargees power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargees, and the receipt of the Chargees for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor. | |
7.4 | Neither the Chargees nor their agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud or dishonesty. | |
7.5 | The Chargees shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable. |
8.1 | The Chargor shall execute and do all such assurances, acts and things as the Chargees in their absolute discretion may require for: |
8.1.1 | creating, perfecting, protecting or ensuring the priority of the Security Interest hereby created (or intended to be created); | ||
8.1.2 | preserving or protecting any of the rights of the Chargees under this Charge; | ||
8.1.3 | ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargees; | ||
8.1.4 | facilitating the appropriation or realisation of the Charged Property or any part thereof; or | ||
8.1.5 | exercising any power, authority or discretion vested in the Chargees under this Charge, |
in any such case forthwith upon demand by the Chargees and at the expense of the Chargor. |
8.2 | Without limitation to the generality of Clause 8.1 , the Chargor covenants with the Chargees that it will on demand of the Chargees procure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargees desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein. |
9.1 | The Chargor will indemnify and save harmless the Chargees and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargees or such agent or attorney: |
9.1.1 | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge; | ||
9.1.2 | in the preservation or enforcement of the Chargees rights under this Charge or the priority thereof; | ||
9.1.3 | on the release of any part of the Charged Property from the security created by this Charge; or | ||
9.1.4 | as a result, directly or indirectly of any breach by the Chargor of any covenant or other obligation under this Charge. |
and the Chargees or such agent or attorney may retain and pay all sums in respect of the same out of money received under the powers conferred by this Charge. All amounts recoverable by the Chargees or such agent or attorney or any of them shall be recoverable on a full indemnity basis. |
9.2 | If, under any applicable law or regulation, and whether pursuant to a judgment being made or registered against the Chargor or the bankruptcy or liquidation of the Chargor or for any other reason any payment under or in connection with this Charge is made or falls to be satisfied in a currency (the Payment Currency) other than the currency in which such payment is due under or in connection with this Charge (the Contractual Currency), then to the extent that the amount of such payment actually received by the Chargees when converted into the Contractual Currency at the rate of exchange, falls short of the amount due under or in connection with this Charge, the Chargor, as a separate and independent obligation, shall indemnify and hold harmless the Chargees against the amount of such shortfall. For the purposes of this clause, rate of exchange means the rate at which the Chargees is able on or about the date of such payment to purchase the Contractual Currency with the Payment Currency and shall take into account any premium and other costs of exchange with respect thereto. |
10.1 | The Chargor, by way of security and in order more fully to secure the performance of its obligations hereunder, pursuant to the Power of Attorney Law (1996 Revision) hereby irrevocably appoints each of the Chargees and the persons deriving title under it jointly and also severally to be its attorney: |
10.1.1 | to execute and complete in favour of the Chargees or its nominees or of any purchaser any documents which the Chargees may from time to time require for perfecting their title to or for vesting any of the assets and property hereby charged or assigned to the Chargees or their nominees or in any purchaser and to give effectual discharges for payments; | ||
10.1.2 | to take and institute on non-payment (if the Chargees in their sole discretion so decide) all steps and proceedings in the name of the Chargor or of the Chargees for the recovery of such moneys, property and assets hereby charged and to agree accounts; | ||
10.1.3 | to make allowances and give time or other indulgence to any surety or other person liable; | ||
10.1.4 | otherwise generally to act for it and in its name and on its behalf; and | ||
10.1.5 | to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in Clause 8 ) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid. |
10.2 | The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do. In relation to the power referred to herein, the exercise by any of the Chargees of such power shall be conclusive evidence of its right to exercise the same. |
11.1 | The Chargor shall pay to the Chargees on demand all costs, fees and expenses (including but not limited to legal fees and expenses) and taxes thereon incurred by the Chargees or for which the Chargees may become liable in connection with: |
11.1.1 | the negotiation, preparation and execution of this Charge; | ||
11.1.2 | the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof; | ||
11.1.3 | any variation of, or amendment or supplement to, any of the terms of this Charge; and/or | ||
11.1.4 | any consent or waiver required from the Chargees in relation to this Charge, |
and in any case referred to in Clauses 11.1.3 and 11.1.4 regardless of whether the same is actually implemented, completed or granted, as the case may be. |
11.2 | The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargees on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes. |
13.1 | This Charge shall be binding upon and shall inure to the benefit of the Chargor and the Chargees and each of their respective successors and (subject as hereinafter provided) assigns and references in this Charge to any of them shall be construed accordingly. | |
13.2 | The Chargor may not assign or transfer all or any part of its rights and/or obligations under this Charge. | |
13.3 | The Chargees may not assign or transfer all or any part of its rights or obligations under this Charge to any assignee or transferee without the consent of the Chargor, such consent not to be unreasonably withheld, provided that no such consent shall be required if an Event of Default affecting the Chargor has occurred and is continuing. The Chargees shall notify the Chargor promptly following any such assignment or transfer. |
14.1 | The Chargees, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargees under this Charge in relation to the Charged Property or any part thereof. Any such delegation may be made upon such terms and be subject to such regulations as the Chargees may think fit. The Chargees shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargees has acted reasonably in selecting such delegate. | |
14.2 | If any of the clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective. | |
14.3 | This Charge (together with any documents referred to herein) constitutes the whole agreement between the Parties relating to its subject matter and no variations hereof shall be effective unless made in writing and signed by each of the Parties. | |
14.4 | The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge. | |
14.5 | This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument. | |
14.6 | To the maximum extent permitted under applicable laws, the Chargor hereby waives any immunity under the laws applicable to the Chargor, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce this Charge in respect of itself or its property. |
The Common Seal of | ) | |||
TOP MOUNT GROUP LIMITED | ) | |||
was hereunto affixed in the | ) | |||
presence of: | ) | |||
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By:
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/s/ Yap Yaw Kong | |||
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Title: Director | |||
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By:
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/s/ Shi Bo Tao | |||
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(Witness) |
Executed as a deed by | ) | |||
For and on behalf of | ) | |||
CICC SUN COMPANY LIMITED | ) | |||
in the presence of:- | ) | |||
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By:
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/s/ Shirley Chen | |||
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Title: Director |
By:
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/s/ Xin, Jie | |||
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Executed as a deed by | ) | |||
For and on behalf of | ) | |||
STARR INVESTMENTS CAYMAN II, INC. | ) | |||
in the presence of:- | ) | |||
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By:
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/s/ Michael Horvath | |||
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Title: Director |
(1) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(2) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(3) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, together with CAGP, Carlyle); | |
(4) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands ( Starr , together with CICC and Carlyle, the Chargees); and | |
(5) | Notable Enterprise Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor). |
(A) | By a share charged dated 10 November, 2008 (the Share Charge) executed by the Chargor in favour of the Chargees, 86,974 shares of Concord Medical Services Holdings Limited (the Company) held by the Chargor was charged by the Chargor to the Chargees jointly by way of a first fixed charge to secure the obligations of the Chargor under Article 3 of the Share Subscription Agreement (as defined in the Share Charge). | |
(B) | At the request of the Chargor, the Chargees have agreed to release 4,107 shares of the Company charged by CZY Investments Limited (CZY) from the security created under the share charge dated 10 November, 2008 (the CZY Share Charge) executed by CZY in favour of the Chargees provided that the Chargor charges an additional 4,107 shares of the Company (the Additional Shares ) held by the Chargor to the Chargees jointly by entering into this Deed to amend and supplement the Share Charge. |
1. | In this Deed, capitalised words and phrases which are not expressly defined herein have the meanings ascribed to them in the Share Charge. | |
2. | In consideration of the Chargees agreement to enter into a deed of partial release in relation to the CZY Share Charge (the sufficiency of which is hereby acknowledged by the Chargor) and as a continuing security for the Secured Obligations, the Chargor as legal and beneficial owner hereby assigns and agrees to assign to the Chargees jointly all benefits present and future, actual and contingent accruing in respect of the Additional Shares and such additional part of the Charged Property constituted by the Additional Shares and all the Chargors right, title and interest to and in the Additional Shares and such additional part of the Charged Property constituted by the Additional Shares including (without limitation) all voting and other consensual powers pertaining to the Additional Shares and hereby charges and agrees to charge in favour of the |
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Chargees jointly all of its interest in the Additional Shares and such additional part of the Charged Property by way of a first fixed charge. | ||
3. | The parties agree that effective upon execution of this Deed, the Share Charge shall be amended in the following manner:- | |
The definition of Charged Shares shall be deleted in its entirety and be replaced with the following new definition of Charged Shares:- | ||
Charged Shares means 90,991 Ordinary Shares of the Company registered in the name of the Chargor as legal and beneficial owner thereof;. | ||
4. | The Chargor shall upon execution of this Deed deliver to the Chargees the documents required under clause 4.2 of the Share Charge in respect of the Additional Shares. | |
5. | The parties agree and confirm that save as expressly provided herein, nothing herein contained shall affect or prejudice the securities assigned or charged under the Share Charge and all sums of money due and owing by the Chargor to the Chargees under the Share Subscription Agreement or secured by the Share Charge and all the covenants conditions and provisions contained in the Share Subscription Agreement and the Share Charge in relation to the securities shall remain in full force and effect. | |
6. | This Deed may be executed in any number of counterparts which, taken together, shall be deemed to constitute one and the same document. | |
7. | This Deed shall be governed by, and construed in accordance with, the laws of the Cayman Islands. |
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EXECUTED as a Deed by | ) | |||||||
for and on behalf of | ) | |||||||
STARR INVESTMENTS CAYMAN II, | ) | |||||||
INC. | ) | |||||||
in the presence of: | ) | |||||||
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By:
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/s/ Michael J. Horvath | |||||||
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Name: Michael J. Horvath | |||||||
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Title: Associate Counsel | |||||||
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EXECUTED as a Deed by | ) | |||||||
for and on behalf of | ) | |||||||
NOTABLE ENTERPRISE LIMITED | ) | |||||||
in the presence of: | ) | |||||||
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By:
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/s/ Bona Lau | |||||||
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Name: Bona Lau | |||||||
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Title: Director | |||||||
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By:
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/s/ Shi Bo Tao | |||||||
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Name: Shi Bo Tao | |||||||
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(Witness) |
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(1) | CICC Sun Company Limited, a company incorporated under the laws of the British Virgin Islands (CICC); | |
(2) | Carlyle Asia Growth Partners III, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP); | |
(3) | CAGP III Co-Investment, L.P., a limited partnership formed under the laws of the Cayman Islands (CAGP Co-Invest, together with CAGP, Carlyle); | |
(4) | Starr Investments Cayman II, Inc., a company incorporated under the laws of the Cayman Islands ( Starr , together with CICC and Carlyle, the Chargees); |
(5) | CZY Investments Limited, a company incorporated under the laws of the British Virgin Islands (the Chargor). |
(A) | By a share charged dated 10 November, 2008 (the Share Charge) executed by the Chargor in favour of the Chargees, 43,895 shares of Concord Medical Services Holdings Limited (the Company) held by the Chargor was charged by the Chargor to the Chargees jointly by way of a first fixed charge to secure the obligations of the Chargor under Article 3 of the Share Subscription Agreement (as defined in the Share Charge). | |
(B) | At the request of the Chargor, the Chargees have agreed to release 4,017 shares of the Company charged by the Chargor from the security created under the Share Charge upon the terms and conditions of this Deed and provided that Notable Enterprise Limited (Notable) charges an additional 4,017 shares of the Company held by Notable to the Chargees jointly by entering into a deed of amendment to amend and supplement a share charge dated 10 November, 2008 executed by Notable in favour of the Chargees. |
1. | In this Deed, capitalised words and phrases which are not expressly defined herein have the meanings ascribed to them in the Share Charge. | |
2. | The Chargees jointly without recourse, representation or warranty of title, release 4,017 shares of the Company (the Released Shares) and such part of the Charged Property constituted by the Released Shares charged by the Chargor to the Chargees jointly under the Share Charge from the fixed charges, the floating charges and all other present and future security interests constituted by and/or created pursuant to the Share Charge. |
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3. | The Released Shares and such part of the Charged Property constituted by the Released Shares shall be held freed and discharged from the security created by, and all claims arising under, the Share Charge. | |
4. | The Chargees shall upon execution of this Deed deliver and release to the Chargor such documents delivered or caused to be delivered by the Chargor to the Chargees pursuant to clause 4.2 of the Share Charge in respect of the Released Shares and such part of the Charged Property constituted by the Released Shares, provided that against such release, the Chargor shall deliver or cause to be delivered to the Chargees the documents required under clause 4.2 of the Share Charge in respect of the remaining Charged Shares and Charged Property. | |
5. | The parties agree and confirm that save as expressly provided herein, nothing herein contained shall affect or prejudice the remaining securities assigned or charged under the Share Charge and all sums of money due and owing by the Chargor to the Chargees under the Share Subscription Agreement or secured by the Share Charge and all the covenants conditions and provisions contained in the Share Subscription Agreement and the Share Charge in relation to the said remaining securities shall remain in full force and effect. | |
6. | This Deed may be executed in any number of counterparts which, taken together, shall be deemed to constitute one and the same document. | |
7. | This Deed shall be governed by, and construed in accordance with, the laws of the Cayman Islands. |
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EXECUTED
as a Deed by
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) | |||||
for and on behalf of
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) | |||||
CICC SUN COMPANY LIMITED
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) | |||||
in the presence of:-
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) |
By:
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/s/ Shirley Shiyou Chen
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Name: Shirley Shiyou Chen | |||
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Title: |
EXECUTED
as a Deed by
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) | |||||
for and on behalf of
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) | |||||
CARLYLE ASIA GROWTH PARTNERS
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) | |||||
III, L.P.
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) | |||||
in the presence of:-
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) |
By: CAGP General Partner, L.P., as its General Partner | ||||
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By: CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
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By:
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/s/ Xiao Feng
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Name: Xiao Feng | |||
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Title: |
EXECUTED
as a Deed by
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) | |||||
for and on behalf of
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) | |||||
CAGP III Co-Investment L.P.
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) | |||||
in the presence of:-
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) |
By: CAGP General Partner, L.P., as its General Partner | ||||
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By: CAGP, Ltd., as the General Partner of CAGP General Partner, L.P. | ||||
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By:
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/s/ Xiao Feng
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Name: Xiao Feng | |||
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Title: |
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EXECUTED
as a Deed by
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) | |||||
for and on behalf of
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) | |||||
STARR INVESTMENTS CAYMAN II,
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) | |||||
INC.
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) | |||||
in the presence of:
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) |
By:
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/s/ Michael J. Horvath
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Title: |
EXECUTED
as a Deed by
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) | |||||
for and on behalf of
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) | |||||
CZY INVESTMENTS LIMITED
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) | |||||
in the presence of:
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) |
By:
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/s/ Cheng Zheng
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Name: Cheng Zheng | |||
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Title: Director | |||
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By:
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/s/ Shi Bo Tao
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Name: Shi Bo Tao | |||
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(Witness) |
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1. | Purpose of the Plan |
2. | Definitions |
(a) | Applicable Laws : All laws, statutes, regulations, ordinances, rules or governmental requirements that are applicable to this Plan or any Award granted pursuant to this Plan, including but not limited to applicable laws of the Peoples Republic of China, the United States and the Cayman Islands, and the rules and requirements of any applicable national securities exchange. | ||
(b) | Act : The U.S. Securities Exchange Act of 1934, as amended, or any successor thereto. | ||
(c) | Affiliate : With respect to the Company, any entity directly or indirectly controlling, controlled by, or under common control with, the Company or any other entity designated by the Board in which the Company or an Affiliate has an interest. | ||
(d) | American Depositary Receipt : A physical certificate evidencing ownership in American Depositary Shares, issued by the Depositary and listed on an established national or regional stock exchange or are publicly traded on any established securities market in the United States. | ||
(e) | American Depositary Share : An equity right representing one or more Shares of the Company, or a fraction of a Share of the Company, held on deposit by the Custodian, which carries the corporate and economic rights of the Shares of the Company, subject to the terms specified on the American Depositary Receipt. | ||
(f) | Award : An Option, Share Appreciation Right or Other Share-Based Award granted pursuant to the Plan. | ||
(g) | Award Agreement : The stock option or other written agreement between the Company and the Participant that evidences and sets out the terms and conditions of an Award. | ||
(h) | Beneficial Owner : A beneficial owner, as such term is defined in Rule 13d-3 under the Act (or any successor rule thereto). |
2
(i) | Board : The Board of Directors of the Company. | ||
(j) | Change in Control : The occurrence of any of the following events: |
(k) | Code : The U.S. Internal Revenue Code of 1986, as amended, or any successor thereto. | ||
(l) | Committee : The Compensation Committee of the Board, or in the absence of a Compensation Committee, the Board. | ||
(m) | Company : Concord Medical Services Holdings Limited, a company incorporated under the laws of the Cayman Islands. | ||
(n) | Custodian : The bank appointed to hold any ADSs on deposit upon or after a public offering of the Shares. | ||
(o) | Depositary : The United States bank appointed by the Company to issue any American Depositary Receipts upon or after a public offering of the Shares. | ||
(p) | Disability : Inability of a Participant to perform in all material respects his or her duties and responsibilities to the Company, or any Affiliates of the Company, by reason of a physical or mental disability or infirmity which inability is reasonably expected to be permanent and has continued (i) for a period of not less than 90 consecutive days or (ii) such shorter period as the Committee may reasonably determine in good faith. The Disability determination shall be in the sole discretion of the Committee and a Participant (or his or her representative) shall furnish the |
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Committee with medical evidence documenting the Participants disability or infirmity which is satisfactory to the Committee. | |||
(q) | Effective Date : The date the Board approves the Plan, or such later date as is designated by the Board. | ||
(r) | Employment : The term Employment as used herein shall be deemed to refer to (i) a Participants employment if the Participant is an employee of the Company or any of its Affiliates, (ii) a Participants services as a consultant, if the Participant is consultant to the Company or its Affiliates and (iii) a Participants services as an non-employee director, if the Participant is a non-employee member of the Board. | ||
(s) | Fair Market Value : The value of a Share, determined as follows: if on the Grant Date or other determination date the Shares are listed on an established national or regional stock exchange, or are publicly traded on any established securities market, the Fair Market Value of a Share shall be the closing price of the Shares on such exchange or in such market (if there is more than one such exchange or market the Committee shall determine the appropriate exchange or market) on the Grant Date or such other determination date (or if there is no such reported closing price, the Fair Market Value shall be the mean between the highest bid and lowest asked prices or between the high and low sale prices on such trading day) or, if no sale of Shares is reported for such trading day, on the next preceding day on which any sale shall have been reported. If the Shares are not listed on such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value of the Shares as determined by the Committee in good faith, and shall be determined by the reasonable application of a reasonable valuation method within the meaning of Section 409A of the Code and the regulations promulgated thereunder. | ||
(t) | Grant Date : The date as of which the Committee approves an Award. | ||
(u) | ISO : An Option that is also an incentive share option granted pursuant to Section 6(d) of the Plan. | ||
(v) | LSAR : A limited share appreciation right granted pursuant to Section 7(d) of the Plan. | ||
(w) | Other Share-Based Awards : Awards granted pursuant to Section 8 of the Plan. | ||
(x) | Option : A share option granted pursuant to Section 6 of the Plan. | ||
(y) | Option Price : The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan. | ||
(z) | Participant : An employee, director or consultant who is selected by the Committee to participate in the Plan. To the extent required by Applicable Laws, Awards may be limited to employees and officers or employees and directors. |
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(aa) | Permitted Holder: Means, as of the date of determination, (i) the Company or (ii) any employee benefit plan (or trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power of its voting equity securities or equity interest is owned, directly or indirectly, by the Company. | ||
(bb) | Person : A person, as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto). | ||
(cc) | Plan : This Concord Medical Services Holdings Limited 2008 Share Incentive Plan. | ||
(dd) | Shares : Ordinary Share of the Company. | ||
(ee) | Share Appreciation Right : A share appreciation right granted pursuant to Section 7 of the Plan. |
3. | Shares Subject to the Plan |
4. | Administration |
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5. | Limitations |
6. | Terms and Conditions of Options |
(a) | Option Price . The Option Price per Share shall be determined by the Committee, and unless specifically approved by the Board, shall not be less than 100% of the Fair Market Value of the Shares on the Grant Date. | ||
(b) | Exercisability . Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than eight years after the Grant Date. | ||
(c) | Exercise of Options . Except as otherwise provided in the Plan or in an Award Agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of Section 6 of the Plan, the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii) or (iv) in the following sentence. The purchase price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise at the election of the Participant (i) in cash or its equivalent (e.g., by check), (ii) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee in order to avoid adverse accounting treatment applying generally |
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accepted accounting principles), (iii) partly in cash and, to the extent permitted by the Committee, partly in such Shares or (iv) if there is a public market for the Shares at such time, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such Sale equal to the aggregate Option Price for the Shares being purchased. No Participant shall have any rights to dividends or other rights of a shareholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan. | |||
(d) | ISOs . The Committee may grant Options under the Plan that are intended to be ISOs. Such ISOs shall comply with the requirements of Section 422 of the Code (or any successor section thereto). No ISO may be granted to any Participant who at the time of such grant, owns more than ten percent of the total combined voting power of all classes of share of the Company or of any Affiliates, unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of Shares acquired upon the exercise of an ISO either (i) within two years after the date of grant of such ISO or (ii) within one year after the transfer of such Shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition. All Options granted under the Plan are intended to be nonqualified share options, unless the applicable Award Agreement expressly states that the Option is intended to be an ISO. If an Option is intended to be an ISO, and if for any reason such Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a nonqualified share option granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plans requirements. In no event shall any member of the Committee, the Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO. | ||
(e) | Attestation . Wherever in this Plan or any agreement evidencing an Award a Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option. |
7. | Terms and Conditions of Share Appreciation Rights |
(a) | Grants . The Committee also may grant (i) a Share Appreciation Right independent of an Option or (ii) a Share Appreciation Right in connection |
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with an Option, or a portion thereof. A Share Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7 (or such additional limitations as may be included in an Award Agreement). | |||
(b) | Terms . The exercise price per Share of a Share Appreciation Right shall be an amount determined by the Committee but in no event shall such amount be less than the greater of (i) the Fair Market Value of a Share on the date the Share Appreciation Right is granted or, in the case of a Share Appreciation Right granted in conjunction with an Option, or a portion thereof, the Option Price of the related Option and (ii) the minimum amount permitted by Applicable Laws. Each Share Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by the Share Appreciation Right. Each Share Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in exchange therefore an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the Option Price per Share, times (ii) the number of Shares covered by the Option, or portion thereof, which is surrendered. The date a notice of exercise is received by the Company shall be the exercise date. Payment shall be made in Shares or in cash, or partly in Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined by the Committee. Share Appreciation Rights may be exercised from time to time upon actual receipt by the Company of written notice of exercise stating the number of Shares with respect to which the Share Appreciation Right is being exercised. No fractional Shares will be issued in payment for Share Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should so determine, the number of Shares will be rounded downward to the next whole Share. | ||
(c) | Limitations . The Committee may impose, in its discretion, such conditions upon the exercisability or transferability of Share Appreciation Rights as it may deem fit. | ||
(d) | Limited Share Appreciation Rights . The Committee may grant LSARs that are exercisable upon the occurrence of specified contingent events. Such LSARs may provide for a different method of determining appreciation, may specify that payment will be made only in cash and may provide that |
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any related Awards are not exercisable while such LSARs are exercisable. Unless the context otherwise requires, whenever the term Share Appreciation Right is used in the Plan, such term shall include LSARs. |
8. | Other Share-Based Awards |
9. | Adjustments Upon Certain Events |
(a) | Generally . In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination, combination or transaction or exchange of Shares or other corporate exchange, or any distribution to shareholders of Shares other than regular cash dividends or any transaction similar to the foregoing, the Committee in its sole discretion and without liability to any person shall make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares for which Options or Share Appreciation Rights may be granted during a calendar year to any Participant, (iii) the maximum number of Shares for which Other Share-Based Awards may be granted during a calendar year to any Participant, (iv) the maximum amount of an Award that is valued in whole or in part by reference to, or is otherwise based on the Fair Market Value of, Shares that may be granted during a calendar year to any Participant, (v) the Option Price or exercise price of any share appreciation right and/or (vi) any other affected terms of such Awards. | ||
(b) | Change in Control . In the event of a Change of Control after the Effective Date, (i) if determined by the Committee in the applicable Award |
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Agreement or otherwise, any outstanding Awards then held by Participants which are unexercisable or otherwise unvested or subject to lapse restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, as of immediately prior to such Change of Control and (ii) the Committee may, but shall not be obligated to, (A) cancel such Awards for fair value (as determined in the sole discretion of the Committee) which, in the case of Options and Share Appreciation Rights, may equal the excess, if any, of value of the consideration to be paid in the Change of Control transaction to holders of the same number of Shares subject to such Options or Share Appreciation Rights (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or Share Appreciation Rights) over the aggregate exercise price of such Options or Share Appreciation Rights or (B) provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder as determined by the Committee in its sole discretion or (C) provide that for a period of at least 15 days prior to the Change of Control, such Options shall be exercisable as to all shares subject thereto and that upon the occurrence of the Change of Control, such Options shall terminate and be of no further force and effect. |
10. | No Right to Employment or Awards |
11. | Successors and Assigns |
12. | Nontransferability of Awards |
13. | Amendments or Termination |
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14. | Jurisdictions |
15. | Distribution of Shares |
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16. | Taxes |
17. | Choice of Law |
18. | Effectiveness of the Plan |
Lessee: | Hospital (hereinafter referred to as Party A) | |
Legal Representative: | ||
Address: |
Lessor: | (hereinafter referred to as Party B) | |
Legal Representative: | ||
Address: |
1. | For purposes of maintaining the leading position in respect of medical technology and academic development, the Lessee plans to establish [ ] Centre (hereinafter referred to as the Centre)/plans to expand [ ] Centre (hereinafter referred to as the Centre) and wishes to install certain medical equipment as follows: [ ]; |
2. | The Lessor is a professional company which is engaged in the lease of large medical equipment as well as provision of relevant services; | |
Upon friendly consultation and based on the principle of equality and the mutual benefit, with respect to the lease of the medical equipment (hereinafter referred to as the Leased Assets) to Party A by Party B, both Party A and Party B have reached the following agreements; |
1.1 | Party B agrees to lease to Party A the following medical equipment . |
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1.2 | The name, model number and specifications, total price, manufacturers, and etc., of the Leased Assets will be subject to the results of the collective tender process. Upon the completion of the collective tender process, both parties shall reach further agreement in respect of the name, model number and specifications, total price, manufacturers, and etc., of the Leased Assets in form of a supplemental agreement. |
1.3 | To facilitate the performance of the lease, Party A shall be responsible for obtaining all necessary procurement licenses, environmental evaluation and assessment, filing for approval of charges and prices, and such other matters as required for operating the Leased Assets. Party A shall also process and complete all procedures required for the use and installation of the Leased Assets and construct and renovate the machine room required for the Leased Assets pursuant to the provisions of regulations and rules of the government and the relevant agencies. |
2.1 | The Leased Assets shall be used at Party As [ ] Centre for purpose of [ ]. |
2.2 | The Leased Assets must be installed and placed at the location agreed by both parties within the premises of Party A. Without the written consent of Party B, Party A shall not change the location and operation environment of the Leased Assets. |
3.1 | During the Lease Term, the ownership of the Leased Assets as listed in the Appendix to this Agreement, including any parts and components, replacement parts, attached parts and auxiliary parts of (or to be attached to) the Leased Assets, shall always belong to Party B. During the Lease Term, Party A shall only enjoy the right to use the Leased Assets. Party A may not sell, transfer, sub-lease, or set |
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mortgage over the Leased Assets or dispose the Leased Assets as investment, and may not conduct any other actions that may infringe Party Bs rights and benefits. Otherwise, Party A shall take the corresponding liabilities for breach of the Agreement. |
3.2 | In the event that Party A is shut down, suspended, merged or acquired, changes the type of its ownership or enters into bankruptcy, Party A shall have no right to dispose of the Leased Assets; regardless of any Agreementual relationship entered into with any third party by Party A or any changes of Party As status as a legal person, Party Bs ownership of the Leased Assets shall in no event be affected. |
3.3 | During the performance of the Agreement, Party B shall have the right to inspect the use and condition of the Leased Assets and as long as such inspection would not affect the use of the equipment, Party A shall make such inspection convenient. Without Party Bs written consent, Party A may not disassemble any parts and components nor change the premises where the Leased Assets are used. Party B shall have the right to mark the logo of the ownership onto the Leased Assets. Party B (or its entrusted agent) shall have right to check, on a regular basis or at any time, the use and condition of the Leased Assets which Party A shall facilitate. |
3.4 | Given that the implementation of this Agreement would not be effected, Party B shall have the right to set mortgage over the Leased Assets or transfer its beneficial interests to any third party. |
4.1 | The Lease Term shall be years, commencing from the time that all of the Leased Assets have been in place and after months of trial operation (the specific date shall be confirmed by both parties in writing). |
4.2 | The Lease Term shall be fixed. During the Lease Term, Party A may not unilaterally suspend or terminate the lease nor propose any requirement for making amendment hereto due to any reasons. |
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4.3 | Upon expiration of the Lease Term, both Parties may renew this Agreement after Party B has conducted the relevant maintenance, upgrading and renovation for the Leased Assets based on the then actual situation of the Leased Assets. However, Party B must guarantee that the Leased Assets may be operated normally during the effective term of the renewed Agreement. |
5.1 | Rental calculation method: | |
From Year 1 to Year [ ], the rental payment shall be [ ] % of the Revenue of the Leased Assets on a monthly basis; | ||
From Year [ ] to Year [ ], the rental payment shall be [ ] % of the Revenue of the Leased Assets on a monthly basis; | ||
Revenue of the Leased Assets = Total amount received by using the Leased Assets for diagnosis (or treatment) minus the Hospitals costs and expenses, which include the Hospitals costs and expenses arising from diagnosis (or treatment) by using the Leased Assets, wages, bonus, welfare, overtime charges, travel and accommodation expenses of the personnel of the Centre, utility charges for water and electric power, costs of consumptive materials, costs for printing materials, hospitality expenses, academic gathering expenses, R&D cost, the repair and maintenance costs of the Leased Assets, costs of office articles, fixed line telephone charges, expenses for settlement of medical disputes, insurance premium for the Leased Assets, and the cost of [ ]. |
5.2 | The rental payment shall be payable on a monthly basis. Party A shall transfer the amount of the rental payment for the previous month to the account as designated by Party B prior to the 10 th day of each month. The account information for the payment will be as follows: |
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Simultaneously, Party B shall issue an official tax invoice to Party A. | ||
During the effective term of this Agreement, Party As payment to the designated bank account set forth above will be deemed performance of the payment obligation under this Agreement. Without the consent of Party B, Party As payment to any other account or in any other manner will not be deemed performance of its obligation hereof. In the event that Party B needs to change its account number for receiving the payment, Party B shall give advance written notice to Party A and Party As finance department. |
Within [ ] days after this Agreement becomes effective, Party A shall transfer a performance guarantee deposit in the amount of [ ] to the account designated by Party B. Within [ ] days upon termination or expiration of this Agreement, Party B shall return such deposit, without any interest accrued, to Party A after deducting the outstanding amount payable by Party A under this Agreement. |
7.1.1 | Party A shall issue a letter of confirmation regarding the rental payment to Party B every month. Such letter of confirmation shall include the amount of the charges collected for the Leased Assets, the Hospitals costs and expenses, etc. Party A shall also make undertakings as to the accuracy of all the data provided in such letter of confirmation. |
7.1.2 | To provide the machine room and auxiliary rooms for the Leased Assets and to add in all such auxiliary facilities and etc. as necessary; to provide the professional personnel including experts, doctors, nurses and |
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technicians and to provide the convenient conditions in respect of the logistics service. | ||
7.1.3 | To assist the supplier in handling the domestic equipment transportation, installation and adjustment, trial and other matters. |
7.1.4 | To be responsible for the treatment and other medical decisions of the patients and to deal with the medical disputes arising from the Centre in due course. |
7.1.5 | Party A will properly manage and safeguard the Leased Assets and designate specially-assigned staff to take charge of the daily work for the operation of the Leased Assets. |
7.1.6 | To be responsible for processing and completing all procedures with the competent supervising departments and the relevant authorities in relation to the approval of the project, procurement permits, environmental evaluation and assessment, approval of charges and prices and qualification for coverage by medical insurance, as well as all routine procedures as required to be processed on a yearly basis. |
7.1.7 | Party A may not use the Leased Assets for diagnosis and treatment free of charge. In case of any required exemption or reduction of charges due to special reasons, such exemption or reduction shall be approved and signed by both Parties. |
7.1.8 | Party A may not effect early termination or amendment this Agreement with the excuse that the principle of Party B has been recovered, or the revenue from the Leased Assets are continually growing, or any leader of the Hospital has been changed. |
7.1.9 | During the Lease Term, Party A may not separately operate any other project competing with the Center either by itself or by cooperating with any third party. |
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7.2.1 | To liaise with the supplier for delivering the Leased Assets as designated by Party A on a timely basis and assist the supplier in installing, adjusting and testing the Leased Assets. |
7.2.2 | To be informed of the status of the operation of the Leased Assets at all times based on the financial information of income and expenses related to the operation of the Leased Assets provided by Party A. |
7.2.3 | Party B or Party Bs entrusted agent (including asset appraiser, accountant, and so on) shall have the right to examine the use and the condition of the Leased Assets which Party A shall facilitate. |
7.2.4 | To assist the supplier in providing such necessary technical information as required for the use of the Leased Assets. |
7.2.5 | To assist the supplier in conducting daily repair and maintenance of the Leased Assets. |
7.2.6 | To liaise with the professional management company for planning and organization of the Centres academic promotion and guidance for operation and management. |
7.2.7 | Party B shall be entitled to use the information and data generated from the treatment by using the Leased Assets, such as the number of patients treated, the amount of charges collected, the treatment plans and the treatment results of the patients, etc. |
7.2.8 | After the completion of the Lease Term, under the same conditions, Party B shall have the preemptive right to provide leasing with respect to any future similar project. |
8.1 | Delivery, examination and acceptance: After the Leased Assets are delivered to the premises, Party A shall examine the Leased Assets for acceptance pursuant to the content as provided in the Appendix hereof. In the event that the Leased Assets fail to meet the agreed requirements, Party A shall timely make a note on the delivery receipt and wait for Party B to settle it. Party A shall be responsible |
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for safeguarding the Leased Assets as soon as the Leased Assets arrive at the location for installation or operation. | ||
8.2 | Technical examination and acceptance: After Party A has made tests and adjustment upon installation and has diagnosed or treated the first 30 cases of patients, if Party A confirms that the Leased Assets comply with the technical requirements, Party A shall issue an acceptance receipt to Party B within 5 days, wherein the delivery of the Leased Assets shall be deemed completed. Failure to issue the receipt in a timely manner and in the absence of any written rejection by Party A, the delivery of the Leased Assets shall be deemed properly completed. The Lease Term shall commence and the charges collected from such 30 cases shall be included into the revenue of the Center. |
8.3 | In the event that the Leased Assets fail to comply with the requirements upon examination, Party B shall assist the supplier in further handling. |
9.1 | During the Lease Term, Party B shall be responsible for purchasing insurance policies for the Leased Assets and the beneficiary shall be Party B or any third party designated by Party B. The insurance premiums shall be included as the Hospitals costs and expenses. |
9.2 | During the Lease Term, in case of any insurance incidents, Party A shall actively cooperate with Party B for processing the claim with the relevant insurance company. |
9.3 | During the Lease Term, in the event that the Leased Assets are lost or damaged due to Party As fault, Party A shall, with all costs and expenses arising born by Party A, take one or several of the following actions as determined by Party B: |
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9.4 | In the event that any third party (such as the patient or etc.) is injured or suffers any loss or damage due to the reasons of the Leased Assets itself (such as the technical reasons or quality defects, etc.), Party A shall, together with Party B, jointly claim and pursue such damages from the seller of the Leased Assets. |
9.5 | In the event that any third party (the patient) is injured or suffers any loss or damage due to the improper use of the Leased Assets by Party A, Party A shall be responsible for such liabilities. |
9.6 | In the event that any third party (such as the patient, etc.) is injured or suffers any loss or damage due to the force majeure (not due to the reasons of the Leased Assets itself or the reasons of Party A), in principle, neither Party A nor Party B shall be liable for compensation. Party A shall be responsible for taking precautions against such kind of risk and will purchase insurance to cover such third partys damage in such cases. |
11.1 | Both Party A and Party B shall perform the corresponding responsibilities and obligations in accordance with the time schedules as provided in this Agreement. |
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In case of any beach of Agreement, the breaching party shall compensate the other partys economic loss. | ||
11.2 | Any delay in making rental payment by Party A shall not exceed two months. In case of any such delay, Party A shall pay Party B with a daily default penalty equal to 0.05% of the overdue amount, except where such delay is caused by the force majeure. | |
11.3 | In case of any breach of Agreement as set forth below, Party B shall have the right to terminate this Agreement and be entitled to a default penalty paid by Party A, calculated with the formula below: | |
Default Penalty = Remaining Lease Term (month) × monthly average rental obtained by Party B
in one year prior to the beach of Agreement ×150%
If the Lease Term is shorter than one year, the monthly average rental obtained by Party B shall be deemed 3% of the purchase price of the equipment: |
11.3.1 | any delay in making the rental payment exceeding two months by Party A; | |
11.3.2 | unilateral early termination or modification of this Agreement by Party A in violation of this Agreement; | |
11.3.3 | unilateral disposal (including sale, sub-lease, removal or transfer and etc.) of the Leased Assets in violation of this Agreement; | |
11.3.4 | provision of false and untrue information regarding the Revenue of the Leased Assets and so on, such that the rental payment that Party B collected becomes less than such amount to which Party B should be entitled; | |
11.3.5 | introduction of any similar medical equipment with similar functions to the Leased Assets through any third party or cooperation with any third party to develop similar projects in violation of this Leased Agreement; | |
11.3.6 | suspension of normally providing medical services to the patients using the Leased Assets for a period exceeding 30 days due to the man-made reasons of Party A; or severe damage or loss of the Leased Assets due to improper use, intentional damage or careless storage by Party A. |
11.4. | In case of any of the above mentioned breach or infringement by either Party A or Party B, the breaching or infringing party shall be liable for all costs for lawsuits, |
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legal counsel fee and other expenses arising from the other partys realization of the creditors rights. |
Any and all disputes related to this Agreement shall be resolved by both Party A and Party B through consultation. In case that no settlement could be reached through consultation, either party may file claim with the Peoples Court as designated by Party B. |
The Appendix to this Agreement is an integrated part hereof and shall have the equal legal validity as that of the main text hereof. |
This Agreement shall become effective upon being signed and stamped by both Party A and Party B. |
15.1 | This Agreement shall automatically terminated upon the expiry of the Lease Term. |
15.2 | All indebtedness arising from the performance of this Agreement by either Party A or Party B will be terminated upon full repayment of all debts, including all outstanding rental payments, default penalties, indemnification, and so on. |
15.3 | In case of impossibility of performance of the Agreement or use of the Leased Assets due to war, natural disaster, force majeure and other factors, this Agreement shall be terminated and neither party shall be liable for or have any rights against the other party. |
15.4 | Prior to the commencing of the Lease Term, under the following circumstances, Party B shall have the right to terminate this Agreement without any liability: |
15.4.1 | Party A fails to obtain the procurement permits for the medical equipment; |
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15.4.2 | Party A fails to prepare and provide, on a timely basis, the premises for using the Leased Assets. |
15.5 | In the event that the government or the military adjusts its policy and issues any regulation or document for prohibiting equipment lease within the country or within the military system, resulting in this Agreement not being able to be performed, but without affecting the use of the Leased Assets, Party A shall be responsible for coordination and negotiation. During such period of coordination and negotiation, Party A shall be still subject to the obligation for paying the rental on a timely basis. If no resolution can be reached upon negotiation, this Agreement may be terminated in early manner, provided that, however, Party A shall make a lump-sum payment for the remaining rental payments to Party B. The remaining rental payments shall be equal to the amount of the original price of the Leased Assets minus the depreciation for the years during which the rent has been paid (the number of years for calculating the depreciation shall be equal to the Lease Term, without considering any remaining value): | |
Remaining Rental Payments = Original Price of Leased Assets (calculated based on the bidding price) × (1- the number of years during which the rental payments has been paid ÷ Lease Term) |
16.1 | Both parties hereto have carefully read through all the terms of this Agreement. Reasonable manner has been adopted to urge both parties to pay attention to the terms regarding exemption or restriction on their responsibilities as provided herein. Per request of both parties, explanation has been made in respect of the relevant terms. |
16.2 | Both parties hereto have authorized their respective representatives to sign this Agreement. All terms of this Agreement are all true meanings and representation of both parties and shall have legal binding effect on both parties. |
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Article 17 | The original of this Agreement and the Appendix hereto shall be prepared in four copies of which Party A and Party B shall each hold two copies. | |
Article 18 | With respect to any matters not covered herein, both parties may sign a supplemental agreement in relation thereto. Any supplemental agreement and this Agreement shall have equal legal validity. |
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Party A:
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Party B:
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[ ] Hospital |
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Parties to the Agreement:
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Party A:
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Legal Representative:
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Party B:
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Hospital | |
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1.1 | For purposes of fully using the internationally advanced [ ] system and continuously enhancing the quality of the diagnosis (treatment) provided by Party B, and upon friendly consultation between Party A and Party B, Party B agrees to entrust Party A to provide operating service in respect to the target equipment and auxiliary products leased to Party B by [ ] Company under the Medical Equipment Lease Agreement entered into by and between [ ]. Party A shall charge the service fee pursuant to the agreed terms hereof. | |
1.2 | Unless otherwise specified, all relevant terms and explanations shall have the same meanings of such terms and explanations as set forth in the Medical Equipment Lease Agreement. |
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3.1 | Party A may send service personnel to provide onsite service. | |
3.2 | Party A shall have the right to set up an account book for recording the number of cases of diagnosis (or treatment), purchase and use of equipment and consumptive materials, as well as other costs. | |
3.3 | Party A shall have the right to be informed of the status of the operation of the Centres equipment at all times based on the financial information of income and expenses related to the operation of the Centres equipment as provided by Party B, and shall have the right to engage an accounting firm to conduct audits on the book with which Party B shall cooperate. | |
3.4 | Party A may examine the use and condition of the Centres equipment. Without the written consent of Party A, during the term of this Agreement, Party B may not disassemble any parts and components of the Centres equipment nor change the premise where the equipment is used. | |
3.5 | Party A shall provide such necessary technical information for the use of the Centres equipment and conduct appropriate marketing and promotional activities. | |
3.6 | Party A shall provide recommendations regarding the employment and engagement of experts and advisors for the Centre. | |
3.7 | Party A shall assign professional personnel to examine the service quality. | |
3.8 | Other service as agreed by both Party A and Party B. |
4.1 | The service fee shall be accounted for and settled on a monthly basis. The amount shall be calculated as [ ] % of the total amount of the revenue generated by the [ ] Centres equipment in a month net of the Centres own expenses (Operating Costs) as expressly provided in the Lease Contract. | |
4.2 | The Centres own expenses (Operating Costs): refers to costs for consumptive materials needed for the operation of the equipment; the bonus of the personnel |
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directly related to the Centre; office expenses; media and advertisement fees, website establishment fees; fees for necessary technical training, academic exchange and the cost for hiring specialists and advisors; equipment repair cost; charges for water and electric power, and other fees approved by both Parties. During the period of the management service, the Centres own expenses (Operating Costs) for each month shall not exceed [ ]% of the total amount of the revenue generated by the [ ] Centres equipment for that month. In case that it exceeds [ ]%, it shall be calculated as [ ]%. | ||
4.3 | Party B shall transfer the service fee of the previous month to the account designated by Party A prior to the 15 th day of each month. The account number for making such payment shall be as follows: |
5.1 | Party A shall be responsible for contacting the manufacturers for replacement of parts and components, maintenance and repair of the equipment. | |
5.2 | Party A shall be responsible for marketing, publicity, technology upgrades, and patient education. | |
5.3 | Party B shall be responsible for providing the premises, auxiliary medical equipment and communication instruments used by the Centre; and providing professional personnel including doctors, nurses and technicians. Party B shall also provides convenient conditions in respect of the logistics service. | |
5.4 | Party B shall be responsible for treatment and other medical decision of the patients and independently take all responsibility relating to medical treatment. | |
5.5 | Party B promises that during the period in which Party A is entrusted to provide the management service, no excuse can be used for exemption or reduction in the treatment fee for any patient who uses the equipment. During such period, if a patient pays the relevant fees at a rate which is lower than the approved charging |
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rate, the differential shall be paid by Party B (except in the case of unanimous consent by both Parties). | ||
5.6 | Party B promises that during the period in which Party A is entrusted to provide the management service, Party B may not, through any third party, introduce into the Centre any medical equipment which has similar function as the equipment managed by Party A. Otherwise, Party A shall have the right to manage the operation for such equipment and shall collect all the revenue generated from such equipment. | |
5.7 | Party B promises that during the period in which Party A is entrusted to provide the management service, Party B may not dispose of the equipment. In the event that the equipment is to be disposed of because of national or local policy or regulation, such disposal shall be implemented pursuant to the relevant provisions of Article 8.4 hereof. | |
5.8 | Party B promises that during the period in which Party A is entrusted to provide the management service, Party B may not terminate this Agreement early or amend this Agreement with the excuse that the principle of the Lessor has been recovered, or the benefits from the Leased Assets are continually growing, or any leader of the Hospital has been changed. Party B shall not infringe Party As legal rights and interests under any early termination due to any reason other than in accordance with the legal requirements. |
6.1 | An Equipment (or the Centre) Service Committee will be established and be referred to as the Service Committee (which will not be qualified as a legal person). The Service Committee shall consist of [ ] members and during the period of service, Party B shall appoint [ ] members while Party A shall appoint [ ] members. The Service Committee shall have one Director as nominated by Party B and shall have one Deputy Director as nominated by Party |
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A. Each Party shall have the right to replace any of the members nominated by such party at its discretion. |
6.2 | The term of office of the members of the Service Committee shall be three years and may be renewed upon expiry. | |
6.3 | The Service Committee is the decision-making organization for work and has the following duties: |
6.3.1 | to convene the meetings of the Service Committee; | |
6.3.2 | to determine the operating plan of the equipment; | |
6.3.3 | to approve the annual financial cost and budget proposal of the equipment; | |
6.3.4 | to approve basic rules and systems of service related to the operating service of the equipment. |
6.4 | The following items may become effective only after having been confirmed by both Party A and Party B in writing and stamped with the corporate seal: |
6.4.1 | to prepare and establish any and all articles of association, service system, human resource and compensation system and financial system related to the operation of the equipment; | |
6.4.2 | to approve the appointment and dismissal and remuneration of the Director and Deputy Director and to establish any service organization; | |
6.4.3 | annual financial budget and final accounts; | |
6.4.4 | to handle any material medical disputes and medical incidents related to the equipment. |
6.5 | The Service Committee shall convene the meeting at least once every year and the meeting shall be convened and chaired by the Director of the Service Committee. All of the members shall be notified in writing 10 days prior to the convening of the meeting (except for under special circumstances). The members of the Service Committee shall prepare minutes for the meetings. The members who participated in the meetings shall sign on the minutes. All meeting minutes shall be filed and kept in records. | |
6.6 | The Centres Director shall take responsibility for management under the leadership of the Service Committee. The Center will have one Director, nominated by Party B and one Deputy Director, nominated by Party A. Both the |
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Director and the Deputy Director shall report to the Service Committee and shall perform the following duties: |
6.6.1 | to manage all daily work and to organize the implementation of all resolutions of the Service Committee; | |
6.6.2 | to organize for implementation the annual operating plan; | |
6.6.3 | to prepare the proposals for establishing internal service organizations; | |
6.6.4 | to establish specific rules and systems for handling medical disputes and incidents; | |
6.6.5 | to propose the appointment or dismissal of other personnel; | |
6.6.6 | other duties as assigned by the Service Committee. |
6.7 | None of the Director or member of the Service Committee, or the Director or Deputy Director of the Center may deposit any revenue of the Center into any account opened in the name of such individuals or any other person. None of the Director or member of the Service Committee, or the Director or Deputy Director of the Center may set mortgage upon the Centers equipment for providing guaranty for the liability of any person. | |
6.8 | In the event that when performing duties, the Director or member of the Service Committee, or the Director or Deputy Director of the Center violates relevant laws, regulations or administrative rules and caused any damages, he/she shall be responsible for any legal consequences and compensation liability. And the Service Committee shall have the right to dismiss him/her. | |
6.9 | The total number of employees shall be proposed by the Director of the Center and submitted to the Service Committee for approval. Except as otherwise expressly provided by the Service Committee, under the same conditions, the Center shall give priority to employing the staff of the hospital and, as necessary, may publicly recruit employees through the hospital from outside. Party B shall be responsible for processing all relevant procedures. In the event that it is necessary to increase the total number of employees to meet the needs of the business, the Director of the Center shall submit a written proposal to the Service Committee and such increase shall be implemented after both the Director and Deputy Director of the Service Committee sign and agree with the proposal. |
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7.1 | During the period of the management service, should any third person (patient) suffer from any injury or damage due to the quality issue of the equipment, Party B shall be responsible pursuing the matter with the manufacturer or the operator. Before the successful resolution of the matter, all fees shall be borne by Party A. | |
7.2 | During the period of the management service, should any third person (patient) suffer from any injury or damage due to improper use of the equipment by Party B, Party B shall be responsible for compensation. |
8.1 | In the event that Party B is late in making any payment of the service fee, it shall pay Party A a daily default penalty equal to 0.05% of the overdue amount. | |
8.2 | In case of any of the actions below on the part of Party B, Party A shall have the right to terminate this Agreement. In addition to the default penalty, Party B shall immediately pay Party A with all of the outstanding service fees whether or not such fees have become due for payment. The monthly service fees not yet due for payment shall be calculated as [ ] % of the average amount of the monthly revenue of the Centres equipment in the three months prior to Party Bs breach of contract: |
8.2.1 | if Party B delays in paying any monthly service fee owed to Party A for more than two months; | |
8.2.2 | if Party B maliciously prevents Party As service relating to the equipment or Party As supervision and examination of Party Bs finance status; | |
8.2.3 | if Party B maliciously provides Party A with false and untrue data of the costs of or the revenue generated from the use of the equipment so that the service fee that Party A collected becomes less than such amount that to which Party A is entitled; | |
8.2.4 | if due to the malicious reason of Party B, the equipment stops providing normal medical service to patients for more than 10 days; |
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8.2.5 | if without the consent of Party A, Party B unilaterally terminates this Agreement early; | |
8.2.6 | if without the consent of Party A, Party B unilaterally disposes of the equipment. |
8.3 | In case of any of the actions below on the part of Party A, Party B shall have the right to terminate this Agreement and Party A should compensate Party B for the loss of Party B wherein the amount of compensation shall be equal to the amount of the service fees charged and collected by Party A in the six months prior to such contractual breach; |
8.3.1 | if Party A unilaterally terminates this Agreement; | |
8.3.2 | if when the equipment fails to function, Party A fails to contact for repair or replacement of the parts and components as agreed herein such that the equipment cannot be operated. |
8.4 | In case that due to the national or local governments or the militarys policy or regulation. the Agreement needs to be terminated early, Party B shall make a lump-sum payment for all the service fees not yet due for payment to Party A. The monthly service fee not yet due for payment shall be calculated as [ ] % of the average amount of the monthly revenue of the Centres equipment in the three months prior to Party Bs contractual breach. |
9.1 | This Agreement shall become effective upon being signed and stamped by both Party A and Party B. | |
9.2 | This Agreement shall be executed in two parts with each of Party A and Party B hold one copy. Both copies of this Agreement shall have equal legal validity. | |
9.3 | Any relevant supplemental agreement regarding the performance , liabilities for breach of contract as well as termination of this Agreement that both Parties may have shall be subject a Supplemental Agreement signed and executed by the Parties to this Agreement. Upon being executed by the respective authorized |
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persons of both Parties, the Supplemental Agreement shall become an integrated part hereof and shall have the equal legal validity as that of the main text hereof. |
10.1 | Any and all disputes related to this Agreement shall be resolved through friendly consultation first by both Party A and Party B. Should no settlement be reached, any lawsuit should be brought to the Peoples Court of the jurisdiction where Party A is located. All expenses and costs incurred from the lawsuit (including the costs of the court, the legal counsel fee and other relevant costs) shall be borne by the losing party. | |
10.2 | During the course of the legal proceedings, other parts of this Agreement shall continue to be performed except for such part under dispute and the legal proceedings. | |
10.3 | This Agreement shall be governed by the Law of the Peoples Republic of China. |
11.1 | Within the scope of the governments policy, the performance of this Agreement shall not be affected by any change of the personnel of Party B or Party Bs competent supervising departments, nor be affected by any other man-made factors. | |
11.2 | In the event that the governments policy restricts the performance of this Agreement, in compliance with the laws and regulations and without prejudice to the vested benefits of both Parties, Party A shall have the right to seek a new channel for cooperation and Party B expresses its approval and will actively cooperate with Party A, except as provided in Article 8.4 hereof. | |
11.3 | In the event that any terms hereof are deemed to be void and invalid, or illegal or cannot be enforceable, the effectiveness, legitimacy and enforceability of the remaining terms of this Agreement shall not be affected. | |
11.4 | Both Party A and Party B promise that they shall treat as confidential the relevant commercial content involved herein (including the content of the Agreement, etc.) |
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Party A:
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Hospital | |
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Address:
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Postal Code:
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Telephone:
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Facsimile:
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Party B:
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Address:
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Postal Code:
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Telephone:
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Facsimile:
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1. | Party A intends to develop the [ ] Center (hereinafter referred to as the Center) in its hospital into a top-tier treatment and research center which can create good economic and social benefits; | |
2. | Party B, as a professional management company, has advantages in respect of clinical medical treatment, publicity in the medical market, technical promotion, cooperation for R&D, as well as operation and management; | |
Based on the principle of equality and mutual benefits and upon friendly consultation, with respect to the entrustment to Party B by Party A of the management of the operation of the [ ] Center in Party As hospital, both Party A and Party B have reached the following agreement: |
Article 1 | Term of Entrusted Management |
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Article 2 | Revenue and Operating Costs of the Center |
2.1 | Revenue of the Center: refers to the revenue generated by using the Centers [ ] and its auxiliary equipment for diagnosis, treatment and the relevant services as well as the revenue generated by using other relevant equipment. | |
2.2 | Operating Costs of the Center: refers to the direct costs and the relevant expenses arising from using the Centers [ ] and its auxiliary equipment for diagnosis, treatment and the relevant services, including the following items: |
2.2.1 | wages and bonuses of the medical personnel of the Center (calculated and reserved at the amount equal to [ ] % of the Revenue of the Center); | |
2.2.2 | costs and expenses for marketing and publicity (calculated and reserved at the amount equal to [ ] % of the Revenue of the Center); | |
2.2.3 | Equipment maintenance costs (calculated and reserved at the amount equal to [ ] % of the Revenue of the Center); | |
2.2.4 | The Centers daily office expenses and the funds reserved for the Management Committee (calculated and reserved at the amount equal to [ ] % of the Revenue of the Center). | |
In total, all the foregoing items will be calculated and reserved at the amount equal to [ ] % of the Revenue of the Center. |
Article 3 | Management Fee and Payment |
3.1 | Management Costs |
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3.2.1 | Floor Revenue Submission to the Hospital shall be equal to Renminbi [ ] per month. In the event that due to equipment maintenance and other reasons, the Center fails to operate in normal fashion for more than [ ] days, the Floor Revenue Submission to the Hospital for the current month shall be reduced or exempted depending on the actual conditions. | |
3.2.2 | If the difference between the Operating Costs of the Center and the Revenue of the Center for the current month is insufficient to pay for the Floor Revenue Submission to the Hospital, the deficient portion shall be supplemented by Party B. | |
3.2.3 | The Center shall be subject to an annual audit at the end of each year. If the annual revenue obtained by the Hospital from the Center for the current year is less than Renminbi [ ] (i.e., the sum of [ ] % of the Net Revenue of the Center plus the Floor Revenue Submission for the whole year is less than Renminbi [ ] ), the amount of difference shall be paid by Party B. | |
3.2.4 | The settlement of the Management Fee shall be as follows: the Management Fee shall be settled monthly. Party A shall complete the settlement of the Management Fee for the previous month prior to the 10 th |
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day of each month and transfer the payment to the account designated by Party B within 5 days upon completion of such settlement. |
3.3 | The account designated by Party B shall be as follows: |
Article 4 | Management Committee |
4.1 | The Management Committee shall consist of [ ] members, selected by both Parties. [ ] members will be selected from Party A of which one member will be appointed as the Deputy Director of the Management Committee; [ ] members will be selected from Party B of which one member will be appointed as the Director of the Management Committee. Either Party shall have the right to replace its respective selected members on the Management Committee. All daily operational matters of the Center shall be approved by more than 50% of the total members of the Management Committee. | |
4.2 | In the event that the Director of the Management Committee fails to perform his/her duties for any reason, the Deputy Director of the Management Committee shall perform the Directors duties on his behalf. Should the Deputy Director of the Management Committee also fail to perform his/her duties for any reason, another member of the Management Committee authorized by the Director or the Deputy Director of the Management Committee shall perform the duties accordingly. |
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4.3 | The Management Committee shall convene meetings once or twice every year. The meeting shall be convened and chaired by the Director of the Management Committee. Under special circumstances, the Director of the Management Committee may convene and chair a provisional meeting. The minutes for the meetings of the Management Committee shall be filed and kept in records. | |
4.4 | The Centers Directors shall take responsibility for management under the leadership of the Management Committee. The Center will establish an Office of Directors, taking charge of daily management of the Center. The Office of Directors will have an Administrative Director, who shall be nominated by Party B, and a Medical Director, who shall be nominated by Party A. | |
4.5 | The Administrative Director shall be responsible for implementing the resolutions of the meetings of the Management Committee, organizing and guiding the Centers daily management matters. The Medical Director shall be responsible for the medical and technical related matters and assisting the Administrative Director in daily management work. | |
4.6 | The Administrative Director must report to the Management Committee regarding the daily operation of the Center on a quarterly basis and shall prepare and submit a financial settlement report to the Management Committee every half year. | |
4.7 | The employment of other personnel of the Center shall be planned by the Centers Administrative Director. Upon approved by the Management Committee, the Center will be responsible for recruitment and employment. Party A shall be responsible for examining and reviewing the qualifications of the employees and shall assist in processing the procedures of employment. All personnel employed must meet the requirements of employment as provided in the management rules of Party A. | |
4.8 | All personnel employed by the Center shall be subject to a system of the labor contracts. Party A shall enter into labor contracts with each of its employees. |
Article 5 | Rights and Obligations of Each Party |
5.1 | Party As rights and obligations |
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5.1.1 | To make timely payment of the Management Fee payable to Party B. | |
5.1.2 | To be responsible for processing and completing all procedures with the competent supervising departments and the relevant authorities with relation to approval of the project, procurement permits, environmental impact evaluation and assessment, approval of charges and prices,and qualification for coverage by medical insurance, as well as all routine procedures as required to be processed on a yearly basis. | |
5.1.3 | To provide all equipment, machine room and auxiliary rooms for the Center; to add necessary auxiliary facilities, etc.; to provide the professional personnel, including doctors, nurses and technicians; and to provide convenient conditions for the logistics service. | |
5.1.4 | To be responsible for coordinating the relationship between the Center and each and all of Party As departments and to provide support for sourcing of the patients for the Center. | |
5.1.5 | To be responsible for the treatment and other medical decisions of the patients and to handle the medical disputes arising from the Center in a timely manner. | |
5.1.6 | To be responsible for cooperating with Party B for Party Bs financing audit and to provide financial information of the Center upon the request by Party B. | |
5.1.7 | To be responsible for providing Party B with the letter of confirmation regarding the revenue and the management fee on a monthly basis. | |
5.1.8 | Except for the Center, Party A promises that it would not separately operate any project that would compete against the Center either by itself or by cooperating with any third party. | |
5.1.9 | To support Party B to develop the marketing and publicity activities related to the operation and management of the radiotherapy treatment center of Party A. Subject to the condition that Party B is in compliance with the relevant provisions of the government, Party A should actively cooperate. The costs for academic promotion and the marketing and |
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publicity activities shall be accounted for as the Operating Costs of the Center. |
5.2 | Party Bs rights and obligations |
5.2.1 | To assign professional management personnel to manage the operation of the Center. | |
5.2.2 | To be responsible for the Centers academic promotion, planning, organization and operation. | |
5.2.3 | To be responsible for the construction and upgrading of the digital medical network and system, realizing the sharing of sources, and interactive and remote diagnosis. | |
5.2.4 | To be responsible for the publicity of the Center. | |
5.2.5 | To assist Party A in selection of the equipment model, procurement and bidding process for the equipment. To protect the mutual interests and benefits of both Party A and Party B. To be responsible for contacting the supplier for replacement parts and components, maintenance and repair of the equipment of the Center. | |
5.2.6 | To be responsible for cooperating with Party A in handling medical disputes. | |
5.2.7 | To properly complete the payment of the Floor Revenue Submission to the Hospital. Party A shall deduct the Floor Revenue Submission of the previous month from the Center prior to the 10 th day of each month. In case of any insufficiency, Party B shall timely make up the deficient portion. |
Article 6 | Finance and Tax |
6.1 | The Center shall formulate its financial system according to the governments laws and regulations and the relevant rules. The Center shall make profit distribution on a monthly basis and shall have an annual settlement to be made at the end of the year. |
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6.2 | All taxes levied on the revenue of each party under this Agreement shall be borne respectively by each party on its own. |
Article 7 | Liabilities for Breach of Contract |
7.1 | In the event that Party A delays in making any payment of the Management Fee to Party B without due reason, Party A shall pay to Party B a daily default penalty equal to [ ] % of the overdue amount. | |
7.2 | In case of any of the following events, Party B shall have the right to unilaterally terminate this Agreement. In addition, Party A shall waive Party Bs obligations of making the monthly Floor Revenue Submissions to the Hospital and guaranteeing the annual Floor Revenue Submission as set forth in Article 3 hereof. Furthermore, Party A shall make compensation to Party B at the amount calculated according to the following formula: | |
Compensation amount = Average amount of the Management Fee in the three months prior to termination of this Agreement ´ 12 months |
7.2.1 | If Party A delays in making any payment of the Management Fee to Party B for a period of over 60 days, in addition to paying to Party B all overdue Management Fee and default penalty in a lump-sum payment, Party A shall make compensation to Party B pursuant to the foregoing provision; | |
7.2.2 | If Party A separately operates any project competing against the Center, either by itself or by cooperating with any third party. | |
7.2.3 | If any external factor affects the operation of the Center, causing the Center to suffer losses for two consecutive years and, as a result, the revenues of Party A and Party B are affected. |
7.3 | Party B shall properly store and manage the equipment provided by Party A. In case that Party As equipment is damaged due to the fault of Party B, Party B shall make compensation for any loss. | |
7.4 | Party B shall strictly comply with the provisions related to the medical and health industry under the States laws and regulations and shall scientifically manage and operate the project entrusted by Party A in good manner. In the event that |
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Party B violates the foregoing provisions and Party A suffers from economic loss under such entrusted management, subject to the specific situation, Party A has the right to early termination of this Agreement and may request Party B to compensate its relevant economic loss according to the following manner. The compensation amount shall be equivalent to Section 7.2 of this Article 7 Liabilities for Breach of Contract. | ||
7.5 | In case that during the term of cooperation between Party A and Party B, the foregoing agreement is not able to be performed in a normal manner due to any factors relating to government policies, upon friendly consultation by and between both Parties, this Agreement may be subject to early termination. |
Article 8 | Dispute Settlement |
Article 9 | Effectiveness and Termination of the Agreement |
9.1 | This Agreement shall be executed in two copies while each of Party A and Party B shall hold one copy. This Agreement shall become effective upon being signed and sealed by the respective legal representatives or authorized representatives of each of Party A and Party B. Should there be any matters not covered herein, both Parties may separately consult with each other and further enter into a Supplemental Contract. The Supplemental Contact and this Agreement shall have equal and same legal validity. | |
9.2 | Upon reaching a unanimous consensus by both Parties hereto, this Agreement may be terminated. |
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1. | For purposes of maintaining its leading position in medical technology and academic development, the Lessee plans to expand the cancer diagnostic and treatment center (the Centre) and wishes to install certain medical equipment; | |
2. | The Lessor is a professional company which is engaged in the lease of large medical equipment as well as provision of relevant services; | |
3. | The Lessor intends to purchase from Xian Century Friendship Medical Technology Co., Ltd. such medical equipment as set out in Appendix 1 hereto and lease the same to the Lessee for use by Changan Hospital and the Lessee accepts the manufacturer, specifications, model, equipping, etc. of such equipment; |
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NOW, THEREFORE, upon friendly consultations and based on the principle of equality and mutual benefit, Party A and Party B hereby agree as follows with respect to the leasing by Party B to Party A of the medical equipment set out in Appendix 1 hereto (the Leased Assets): |
1.1 | Party B agrees to lease to Party A the Leased Assets listed in Appendix 1 hereto, the price of which is RMB*** million. | |
1.2 | In order for the lease project to be carried out smoothly, Party A shall be responsible for procuring all necessary procurement licenses, environmental evaluation and assessment, charges and prices approval filing, and such other matters as required for the operation of the Leased Assets. Party A shall also process and complete all procedures required for the use and installation of the Leased Assets and shall construct and furnish the machine room, etc. required for the Leased Assets pursuant to the regulations and rules of the state and relevant authorities. |
2.1 | The Leased Assets shall be used at Party As premises for the purpose of carrying out cancer diagnostic and treatment work. | |
2.2 | The Leased Assets must be installed and placed at the location agreed by the Parties within the premises of Party A. Without the written consent of Party B, Party A shall not change the location and operation environment of the Leased Assets. |
3.1 | During the Lease Term, the ownership of the Leased Assets as listed in the Appendix to this Agreement, including any parts and components, replacement |
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parts, attached parts and auxiliary parts of (or to be attached to) the Leased Assets, shall always belong to Party B. During the Lease Term, Party A shall only enjoy the right to use the Leased Assets. Party A may not sell, transfer, sub-lease, mortgage, or make investment by means of, the Leased Assets, or otherwise conduct any other action that may infringe Party Bs rights and benefits. Otherwise, Party A shall assume corresponding breach of contract liabilities. | ||
3.2 | Where Party A is shut down, suspended, merged or acquired, or modifies the type of its ownership or enters into bankruptcy, Party A shall have no right to dispose of the Leased Assets. Party Bs ownership of the Leased Assets shall not be affected by any agreement entered into by Party A with any third party or any change to Party As status as a legal person. | |
3.3 | During the performance of the Agreement, Party B shall have the right to inspect the use and conditions of the Leased Assets and as long as such inspection would not affect the use of the equipment, Party A shall facilitate the carrying-out of such inspection. Without Party Bs written consent, Party A may not add or remove any parts and components of the Leased Assets nor shall it change the premises of use of the Leased Assets. Party B shall have the right to affix marks of ownership onto the Leased Assets. Party B (or its entrusted agent) shall have the right to inspect, on a regular basis or at any time, the use and conditions of the Leased Assets and Party A shall exert every effort to facilitate the same. | |
3.4 | Party B shall have the right to mortgage the Leased Assets or transfer its beneficial interests to a third party, provided that the implementation of this Agreement and the normal use by Party A shall not be affected thereby. |
4.1 | The Lease Term shall be *** years, commencing from September 1, 2009 and expiring on ***. If the Parties fail to formally commence the lease as of September 1, 2009, the Lease Term will be extended accordingly and will be re-agreed by the Parties by a supplementary instrument. |
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4.2 | The Lease Term shall be fixed. During the Lease Term, Party A may not unilaterally suspend or terminate the lease hereunder nor shall it request any change to the provisions hereof on any ground. | |
4.3 | Upon expiration of the Lease Term, the Parties may renew this Agreement after Party B shall have conducted relevant maintenance, upgrading and renovation work in respect of the Leased Assets based on the then actual conditions of the Leased Assets, provided that Party B shall guarantee the normal operation of the Leased Assets during the term of the renewed agreement. |
5.1 | Rental fee calculation method: | |
From ***, the rental fee = ***; | ||
From ***, the rental fee = ***; | ||
(1) Revenue of Leased Assets: Total fee amounts received from the use of the Leased Assets for diagnosis (or treatment) | ||
(2) Hospital-Paid Costs and Expenses: Various costs and expenses incurred during the course of diagnostic or treatment, including: the wages, bonus, welfare benefits, overtime charges and travel and accommodation expenses of the personnel of the Centre (exclusive of personnel dispatched by both Parties); water and power utility charges; costs of consumables; document printing costs; hospitality expenses; academic exchange expenses; R&D assistance costs; the repair and maintenance costs of the Leased Assets; costs of office supplies; telephone charges; medical dispute settlement expenses, etc. | ||
5.2 | The rental fee shall be paid on a monthly basis. Party A shall transfer the rental fee of the previous month to the designated account of Party B by the 15 th day of each month. The information of the account for the receipt of rental fee payments is as follows: | |
Account Name: Medstar (Shanghai) Leasing Co., Ltd. | ||
Bank name: Shanghai Waigaoqiao Gaoqiao Branch, Agricultural Bank of China |
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Account number: *** | ||
Simultaneously, Party B shall issue an official tax invoice to Party A. | ||
During the term of this Agreement, the making of payment by Party A to the designated bank account set forth above shall be deemed performance of its payment obligation hereunder and the making of payment by Party A to any other account or in any other manner without the consent of Party B shall not be deemed performance of its obligation hereunder. Where Party B needs to change its account for the rental fee payment, Party B shall give prior written notice to Party A and Party As finance department. |
6.1 | Party As rights and obligations |
6.1.1 | Party A shall issue on a monthly basis a rental fee confirmation letter to Party B, setting out the fee amounts of the Leased Assets, the Hospital-Paid Costs and expenses, etc. Party A shall warrant the truthfulness of the data provided in such letter. | |
6.1.2 | Party A shall provide the machine room and auxiliary rooms for the Leased Assets and add necessary auxiliary facilities, etc.; shall provide professional personnel including experts, doctors, nurses and technicians and shall provide convenience in respect of logistics services. | |
6.1.3 | Party A shall assist the supplier in handling domestic transportation, installation, commissioning, etc. of the equipment. | |
6.1.4 | Party A shall be responsible for the treatment and other medical decisions of the patients as well as for the timely handling of medical disputes arising from the Centre. |
5
6.1.5 | Party A shall properly manage and safeguard the Leased Assets and shall designate specially-assigned staff to take charge of the daily work in connection with the operation of the Leased Assets. | |
6.1.6 | Party A shall be responsible for processing and completing all procedures with the competent supervising departments and relevant authorities in relation to the approval of the project, procurement permits, environmental evaluation and assessment, approval of charges and prices and qualification for medical insurance coverage, as well as all relevant routine procedures as required to be processed on a yearly basis. | |
6.1.7 | Party A may not use the Leased Assets for diagnosis and treatment free of charge. If any fee exemption or reduction is required by any extraordinary circumstance, such exemption or reduction shall be approved and signed by both Parties. | |
6.1.8 | Party A may not terminate earlier or modify this Agreement on the ground that Party B has recovered its costs, or that the revenue from the Leased Assets is continually growing, or that any leader of the Hospital has been changed. | |
6.1.9 | During the Lease Term, Party A may not separately operate any other project competing with the Center either by itself or in cooperation with any third party. |
6.2 | Party Bs rights and obligations |
6.2.1 | Party B shall, in cooperation with the supplier, timely deliver to Party A the Leased Assets designated by Party A and shall assist the supplier in installing and commissioning the Leased Assets. | |
6.2.2 | Party B shall inform itself of the operation status of the Leased Assets at all times based on the income and expenses information related to the operation of the Leased Assets as provided by Party A. | |
6.2.3 | Party B shall have the right to dispatch Leased Assets administration personnel to manager the Leased Assets and shall have the right to keep a book recording the number of patients diagnosed or treated with the |
6
Leased Assets, the purchase and use of consumables and other costs related to the use of the Leased Assets and Party A shall cooperate with the same. | ||
6.2.4 | Without written authorization of Party B, the administration personnel dispatched by Party B shall have no authority to amend or supplement any matters agreed hereunder on behalf of Party B. | |
6.2.5 | Party B or Party Bs entrusted agent (including asset appraisers, accountants, etc) shall have the right to examine the use and the condition of the Leased Assets and Party A shall exert every effort to facilitate the same. | |
6.2.6 | Party B shall assist the supplier in providing such technical documentation as required for the use of the Leased Assets. | |
6.2.7 | Party B shall assist the supplier in conducting daily repair and maintenance work in respect of the Leased Assets. | |
6.2.8 | Party B shall cooperate with the professional management company in relation to the planning and organization of the Centres academic promotion and guidance on its operation and management. | |
6.2.9 | Upon expiry of the Lease Term, where terms and conditions are equal, Party B shall have the preemptive right to provide leasing with respect to any similar project in the future. |
7.1 | Delivery, examination and acceptance: After the Leased Assets are delivered to the premises, Party A shall examine the Leased Assets for acceptance in accordance with the Appendix hereof. In the event that the Leased Assets fail to meet the agreed requirements, Party A shall timely make a note on the delivery receipt and wait for Party B to resolve the same. Party A shall be responsible for safeguarding the Leased Assets once the Leased Assets arrive at the location for installation or operation. | |
7.2 | Technical examination and acceptance: If, upon installation and commissioning and completion by Party A of the diagnostic or treatment of the first 30 patients, |
7
Party A confirms that the Leased Assets are in consistency with the technical requirements, Party A shall issue to Party B an acceptance receipt within 5 days, whereupon the delivery of the Leased Assets shall be deemed completed. Where Party A fails to timely issue such receipt or to raise any written objection, the Leased Assets shall be deemed properly delivered. Thereupon, the Lease Term shall commence and the charges collected from such 30 patients shall be included as the revenue of the Center. | ||
7.3 | Where the Leased Assets fail to pass the acceptance examination, the supplier shall be responsible for addressing the matter. | |
7.4 | Considering the Leased Assets hereunder are purchased by Party B from Xian Century Friendship Medical Technology Co., Ltd., the Parties agree that Xian Century Friendship Medical Technology Co., Ltd. shall be responsible for delivering the Leased Assets to the site designated by Party A. The Parties will, in conjunction with Xian Century Friendship Medical Technology Co., Ltd., conduct the acceptance examination. No risk arising out of the delivery acceptance and the technical acceptance shall be borne by Party B. If the Leased Assets pass the acceptance examination, Party A shall unconditionally lease the Leased Assets; if the Leased Assets fail to pass the acceptance examination, Xian Century Friendship Medical Technology Co., Ltd. shall bear relevant liabilities and Party A shall not bring any suit or claims against Party B in respect of the same. |
8.1 | During the Lease Term, Party B shall be responsible to maintain for the Leased Assets insurance with an insurer acceptable to the Parties, and Party B or any third party designated by Party B shall be named as the beneficiary. The insurance premium shall be included as Hospital-Paid Costs and Expenses. |
8
8.2 | During the Lease Term, upon occurrence of any insurance-covered incident, Party A shall actively cooperate with Party B in processing the claim with the relevant insurer. | |
8.3 | During the Lease Term, if the Leased Assets are lost or damaged due to reasons attributable to Party A, Party A shall, at its costs and expenses, take one or several of the following actions as determined by Party B: |
8.4 | If any third party (e.g. patients) suffers any injury as a result of reasons attributable to the Leased Assets themselves (such as technical factors or quality defects, etc.), Party A shall, in conjunction with Party B, seek recourse against the seller of the Leased Assets. | |
8.5 | If any third party (e.g. patients) suffers any injury as a result of Party As negligent use of the Leased Assets, Party A shall be held liable. | |
8.6 | If any third party (e.g. patients) suffers any injury as a result of force majeure (other than as a result of reasons attributable to the Leased Assets themselves or the fault of Party A), in principle, neither Party A nor Party B shall be liable to |
9
indemnify, provided that Party A shall have the duty to take precautions against such kind of risks by taking out third party liability insurance. |
10.1 | Party A and Party B shall perform the corresponding responsibilities and obligations in accordance with the time schedules as provided in this Agreement. In case of any beach of Agreement, the breaching party shall compensate the other partys economic loss. | |
10.2 | Any delay in making rental fee payment by Party A shall not exceed two months. In case of any such delay, Party A shall pay Party B a daily default penalty equal to 0.05% of the overdue amount, except where such delay is caused by the force majeure. | |
10.3 | Any breach by Party A set forth below shall be deemed a material breach by Party A: |
10.3.1 | any failure by Party A to perform the lease obligations upon purchase of the Leased Assets by Party B from Xian Century Friendship Medical Technology Co., Ltd. in violation of this Agreement; | ||
10.3.2 | any delay by Party A in making any rental fee payment exceeding two months by Party A; | ||
10.3.3 | any unilateral early termination or modification of this Agreement by Party A in violation of this Agreement; | ||
10.3.4 | any interference by Party A in Party Bs management or financial supervision of the Leased Assets; | ||
10.3.5 | any unilateral disposal (including sale, sub-lease, removal or transfer, etc.) by Party A of the Leased Assets in violation of this Agreement; |
10
10.3.6 | provision of any false information by Party A regarding the Revenue of the Leased Assets and so on, such that the rental fee payment collected by Party B is less than the amount to which Party B is entitled; | ||
10.3.7 | introduction of any similar medical equipment with similar functions to the Leased Assets through any third party or cooperation with any third party to develop similar projects in violation of this Leased Agreement; | ||
10.3.8 | any suspension of normal medical services to patients using the Leased Assets for a period exceeding 30 days due to the man-made reasons of Party A; or any severe destruction or loss of the Leased Assets due to improper use, intentional damage or careless storage by Party A. |
10.4 | In case of any material breach of Agreement by Party A, Party B shall have the right to terminate this Agreement and take any of the following measures: |
10.4.1 | request Party A to immediately make full payment of all undue rental fee, default penalty and all other amounts payable; | ||
Undue Rental Fee = Remaining Lease Term (month) × monthly average rental fee obtained by Party B in one year prior to the beach of Agreement If the Lease Term is shorter than one year, the monthly average rental fee obtained by Party B shall be deemed 3% of the purchase price of the equipment. Default Penalty = Undue Rental Fee ×50% | |||
10.4.2 | terminate this Agreement, and Party B shall take over the Leased Assets to continue the operation, and the revenue generated from such operation of the Leased Assets shall be solely owned by Party B. Party B shall also have the right to request Party A to pay the default penalty (the calculation method is the same as above) and all other amounts payable. |
10.5. | In case of any of the above mentioned breach or infringement by Party A, Party A shall also be liable for all costs for lawsuits, legal counsel fee and other expenses arising from Party Bs realization of its creditors rights. |
11
14.1 | This Agreement shall be automatically terminated upon the expiry of the Lease Term. | |
14.2 | All claims and indebtedness arising from the performance of this Agreement by Party A and Party B shall be terminated upon full repayment of all debts, including all rental fee payments, default penalties, indemnification, and so on. | |
14.3 | In case of impossibility of performance of the Agreement or use of the Leased Assets due to war, natural disaster, force majeure and other factors, this Agreement shall be terminated and neither party shall be liable to or have any rights against the other party. | |
14.4 | Prior to the commencement of the Lease Term, under the following circumstances, Party B shall have the right to terminate this Agreement without any liability: |
14.4.1 | Party A fails to obtain the procurement permits for the medical equipment; | ||
14.4.2 | Party A fails to prepare and provide, on a timely basis, the premises for using the Leased Assets. |
14.5 | In the event that the government or the military adjusts its policy and issues any regulation or document for prohibiting equipment lease within the country or |
12
15.1 | Prior to the formal operation of the Leased Assets, the Parties shall enter into certain supplemental documents, such as the Composition of the Organization and Management Department of the Leased Assets and Financial Management Process of the Leased Assets, with respect to the specific matters concerning the management department and financial management process of the Leased Assets. | |
15.2 | The Parties hereto have carefully read through all the terms of this Agreement. Reasonable manner has been adopted to urge the Parties to pay attention to the terms regarding exemption or restriction on their responsibilities as provided herein. Per request of the Parties, explanation has been made in respect of the relevant terms. | |
16.2 | The Parties hereto have authorized their respective representatives to sign this Agreement. All terms of this Agreement are a true expression of the intents of the Parties and shall have legal binding effect on the Parties. |
13
14
15
Item | Description of Equipment | Brand | Quantity | Manufacturer | Type | |||||
1 |
MM50
|
1 | IBA | MM50 | ||||||
2 |
PET/CT
|
GE | 1 | GE | DisscoveryLs | |||||
3 |
Novalis
|
1 | Varian | Simulator included | ||||||
4 |
CT
|
1 | SHIMADZU | SCT-6800TXL | ||||||
5 |
MRI
|
1 | Philips | Interal.5T | ||||||
6 |
Cyclotron
|
1 | IBA | CYCLONE18/9 |
16
1. | The Entrusted Party has the largest tumor therapy-related medical network in Asia and expertise in operation and management of medical institutions; |
2. | The Entrusting Parties aims to develop Changan Hospital to be one of top-tiered modernized hospitals in China with core competitiveness in tumor therapy and deliver attractive economic return and social benefits; |
3. | The Board of Directors (please refer to Appendix A) of the Entrusting Parties and the shareholders meeting (please refer to Appendix B) have approved the resolutions, pursuant to which, all existing businesses in Changan Hospital will be entrusted to the Entrusted Party for operation and management; |
1. | Definitions and Explanations | |
In the Contract, the following terms have meanings as below. | ||
Parties: the Entrusting Parties and the Entrusted Party; | ||
Monthly Gross Revenue: the gross operational revenue generated by Changan Hospital by month (before deduction of any cost); | ||
Annual Accounting: the accounting conducted every full year (twelve months) starting from the date when the Entrusted Party was entrusted for operation and management; | ||
Annual Gross Revenue: After Annual Accounting, the gross operational revenue generated by Changan Hospital in a continuous operating period for twelve months |
1
(before deduction of any cost) | ||
2. | Model of Entrusted Operation and Management | |
(1) | The Entrusted Party shall take over all existing businesses in Changan Hospital and conduct operation and management. | |
(2) | The Entrusted Party shall conduct operation and management activities in the name of Changan Hospital. | |
3. | Period for Entrusted Operation and Management | |
(1) | The Parties shall unanimously agree that the period for entrusted operation and management shall be in force since the effective date of this Contract until ***. | |
(2) | Entrustment target: The Entrusted Party undertakes that it shall maintain and increase the value of the entrusted assets in the entrustment period, enhance Changan Hospitals brand profile and social awareness, strengthen Changan Hospitals internal management and its team stability, and deliver a rapid growth in revenue and profit, all of which shall pave the way for the development of the 2 nd Phase. | |
4. | Matters under Entrusted Operation and Management | |
The Parties shall agree that the following matters be under the Entrusted Partys operation and management. | ||
(1) | All businesses within Changan Hospitals business scope; | |
(2) | Changan Hospitals internal administrative matters, including but not limited to financials, human resource, administration, etc. | |
5. | Fee and Bonus for Entrusted Operation and Management | |
(1) | The Parties unanimously agree that the management fee for the Entrusted Party shall be calculated as *** of Changan Hospitals Monthly Gross Revenue and paid to the Entrusted Party on a monthly basis after monthly accounting. | |
(2) | Changan Hospital shall complete the monthly revenue accounting for the last month prior to the 15 th of every month and with the recognition and consent from the Entrusted Party, it shall transfer the management fee to the account specified by the Entrusted Party within five days. | |
(3) | If the period lasts any one full year, Changan Hospital shall complete the Annual Accounting within 15 days and with the recognition and consent from the Entrusted Party, it shall provide the incentives for the Entrusted Party as set forth below. |
a. | If the growth rate of Changan Hospitals Annual Gross Revenue is less than |
2
***, no bonus shall be provided for the Entrusted Party; |
b. | If the growth rate of Changan Hospitals Annual Gross Revenue exceeds ***, the bonus for the Entrusted Party shall be calculated as ***; |
c. | The data of annual revenue and its growth rate shall be recognized by the Parties and be verified by an intermediary recognized by the Parties. |
(4) | Upon the recognition of the Annual Accounting by the Parties, Changan Hospital shall transfer the bonus to the account specified by the Entrusted Party within 5 days. | |
(5) | If the Entrusted Party has any disagreement in the monthly accounting or the Annual Accounting, Changan Hospital shall coordinate with the Entrusted Party to review the accounting results within three days upon the receipt of the disagreement from the Entrusted Party. The accounting is subject to the results after review. | |
(6) | The Parties shall unanimously agree that the income related to the tumor business in the cooperation scope under the Framework Agreement (Such Income) shall not be included into the Monthly Gross Revenue and the Annual Gross Revenue. Therefore, Such Income shall be deducted from the revenue for last year when calculating the annual growth rate. | |
6. | The Parties Rights and Obligations | |
(1) | Changan Hospitals Rights and Obligations |
a. | It has the right to accredit representatives to take in the operational situation from time to time and the Entrusted Party shall coordinate with all ones strength; | ||
b. | It has the right to deal with the labor relationships and the service relationships of Changan Hospitals employees but shall keep the Entrusted Party informed and consult the Entrusted Partys opinions or advice; | ||
c. | It has the obligation to handle all necessary approval and filing procedures to execute and perform the Contract; | ||
d. | It has the obligation to start the handover of all businesses upon the effective date of this Contract and coordinate the Entrusted Partys operation and management activities with all ones strength; | ||
e. | It has the obligation to conduct accounting and pay the management fee to the Entrusted Party pursuant to this Contract; | ||
f. | In case of any change in the business scope or treatment and diagnosis programs in Changan Hospital or any cooperation with any third-party, it shall notify the |
3
Entrusted Party immediately; | |||
g. | Without the Entrusted Partys consent, Changan Hospital shall not dispose any asset or equipment, provide any guarantee externally, entrust operation and management, lease medical equipment, conduct outbound investment, etc. |
(2) | The Entrusted Partys Rights and Obligations |
a. | It has the right to carry out the management based on its philosophy and experience, on the premise of not violating any law, regulation or this Contract; | ||
b. | It has the right to formulate new rules and regulations and has the right to revise, or suspend during the Contract Period the use of, Changan Hospitals rules and regulations, provided that it is agreed by the Entrusting Parties; | ||
c. | It has the right to provide opinions or advice regarding the labor relationships and the service relationships of Changan Hospitals employees and Changan Hospital shall honor the Entrusted Partys opinions or advice, if possible; | ||
d. | It has the obligation to comply with Chinas financial regulations and all operating income shall be placed in the accounts jointly designated by Changan Hospital and the Entrusted Party. It shall not establish any other account; | ||
e. | Unless there is a written consent from Changan Hospital, it shall not dispose any asset of Changan Hospital in any form or purchase or lease any asset in the name of Changan Hospital; | ||
f. | Unless there is a written consent from Changan Hospital, it shall not provide any guarantee in any form in the name of Changan Hospital for the Entrusted Party or any third party. |
7. | The Parties Warranties and Undertakings |
(1) | Xian Wanjiechangxin Medical Services Company Limiteds Warranties and Undertakings |
a. | Xian Wanjiechangxin Medical Services Company Limited is duly incorporated and validly existing under the law and has obtained all necessary internal authorizations required for signing this Contract; | ||
b. | Xian Wanjiechangxin Medical Services Company Limited has waived the right to rescind this Contract and the right to raise any disagreement with regard to the content, form, and (all or part of) effectiveness of this Contract. |
(2) | Changan Hospitals Warranties and Undertakings |
a. | Changan Hospital is duly incorporated and validly existing under the law and |
4
has obtained all necessary internal authorizations required for signing this Contract; | |||
b. | Changan Hospital is able to obtain all necessary approvals, filings and other procedures to sign and perform this Contract to ensure that the full performance of this Contract would not be influenced by any incompleteness in procedure; | ||
c. | The operational situation of Changan Hospital shall be maintained or improved before the handover to the Entrusted Party. |
(3) | The Entrusted Partys Warranties and Undertakings |
a. | The Entrusted Party is duly incorporated and validly existing under the law and has obtained all necessary internal authorizations required for signing this Contract; | ||
b. | The Entrusted Partys operation and management will be legitimate and subject to Changan Hospitals business scope; | ||
c. | The Entrusted Party shall strictly keep Changan Hospitals business secrets, and without Changan Hospitals consent, it shall not disclose any of them to any third-party. |
8. | Performance Deposit |
(1) | The Entrusted Party shall transfer a performance deposit of RMB 15 million into the account held by Xian Century Friendship Medical Technology R&D Co., Ltd., an affiliate of Changan Hospital, within 15 working days upon the signing of this Contract. | ||
(2) | Unless otherwise agreed by the Parties, Changan Hospital shall return the performance deposit to the Entrusted Party in full amount without interest within 15 days after the cancellation or termination of this Contract. |
9. | Special Provisions | |
The 2nd Phase Construction Project of Changan Hospital shall be in the Entrusting Partiess charge and bear no relationship with the scope of entrusted operation and management as provided herein. The Entrusting Parties shall ensure that debts or contingent debts related to the 2nd Phase Construction Project of Changan Hospital exert no influence on the Entrusted Partys interests. |
10. | Default Liabilities |
(1) | If the Entrusted Party violates Chinas financial regulations or establishes an unauthorized account, it shall be deemed as a fundamental breach by the Entrusted Party; |
5
(2) | If the Entrusted Party changes Changan Hospitals business scope or treatment or diagnosis programs without Changan Hospitals consent, it shall be deemed as a fundamental breach by the Entrusted Party; | |
(3) | If the Entrusted Party disposes any asset in Changan Hospital or purchases or leases any asset in the name of Changan Hospital without Changan Hospitals written consent, it shall be deemed as a fundamental breach by the Entrusted Party; | |
(4) | If the Entrusted Party provides any guarantee in the name of Changan Hospital for the Entrusted Party or any third party without Changan Hospitals written consent, it shall be deemed as a fundamental breach by the Entrusted Party; | |
(5) | If Changan Hospital is subject to any penalty by relevant authorities caused by the Entrusted Partys unlawful act, it shall be deemed as a breach by the Entrusted Party and the Entrusted Party shall assume corresponding legal liabilities and economic losses; | |
(6) | If the Entrusted Party fails to comply with this Contract on the performance deposit payment, it shall be deemed as a breach by the Entrusted Party. Any late payment shall be subject to an overdue penalty payable to Changan Hospital, calculated at a rate of 0.03% of the performance deposit amount for each day of delay; | |
(7) | If Changan Hospital fails to conduct accounting or pay the management fee on a timely basis, it shall be deemed as a breach by Changan Hospital. Any late payment shall be subject to an overdue penalty payable to the Entrusted Party, calculated at a rate of 0.03% of the management fee amount payable for each day of delay. Any delay of payment by 30 days shall be deemed as a fundamental breach by Changan Hospital; | |
(8) | If Changan Hospital refuses to conduct accounting or pay the management fee or bonus, it shall be deemed as a fundamental breach by Changan Hospital; | |
(9) | If the Entrusted Party has any disagreement in the accounting completed by Changan Hospital, and Changan Hospital fails to coordinate with the Entrusted Party to review the accounting results within the period specified herein, any delay of review shall be subject to an overdue penalty payable to the Entrusted Party, calculated at a rate of 0.03% of the management fee amount payable for each day of delay. Any delay of review by 30 days shall be deemed as a fundamental breach by Changan Hospital; | |
(10) | If Changan Hospital changes its business scope or treatment or diagnosis programs or cooperates with any third party, none of the Entrusting Parties interests shall be damaged. The Entrusted Party has the right to request Changan Hospital to enter into a supplementary agreement to this Contract within a specified period. If Changan Hospital refuses to negotiate or fails to enter into any agreement within a reasonable period under the Entrusted Partys request, it shall be |
6
deemed as a fundamental breach by Changan Hospital; | ||
(11) | If upon signing this Contract, Changan Hospital disposes any asset or equipment, conducts outbound investment, entrusts operation or management, leases medical equipment, or provides any guarantee externally without the Entrusted Partys consent, or the Entrusted Party finds that Changan Hospital has cooperated with any other third party before signing this Contract and has not disclosed it in full to the Entrusted Party, it shall be deemed as a fundamental breach by Changan Hospital; | |
(12) | If this Contract fails to be fully performed caused by any defect in the Entrusting Parties approvals, filings or internal authorization procedures, it shall be deemed as a breach by the Entrusting Parties, and the Entrusted Party may request the Entrusting Parties to complete all necessary procedures in a specified period, otherwise, it shall be deemed as a fundamental breach by the Entrusting Parties; | |
(13) | If Changan Hospital fails to return the performance deposit to the Entrusted Party pursuant to this Contract in time, any late payment shall be subject to an overdue penalty payable to the Entrusted Party, calculated at a rate of 0.03% of the performance deposit amount payable for each day of delay. Any delay of payment by 30 days shall be deemed as a fundamental breach by Changan Hospital; | |
(14) | If there is any fundamental breach by a party, the other party has the right to unilaterally terminate this Contract and claim the penalty from the default party. The amount and payment of the penalty shall be: if there is a fundamental breach by the Entrusted Party, the Entrusting Parties shall not be required to return the performance deposit to the Entrusted Party; if there is a fundamental breach by the Entrusting Parties, the performance guarantee shall be returned to the Entrusted Party in double; | |
(15) | If there is any breach by any one party in the Entrusting Parties, the other party in the Entrusting Parties shall assume the joint and several liabilities; | |
(16) | The payment of the penalty above shall not prejudice any other compensation for loss that the non-default party may claim against the default party. | |
11. | Expiration and Termination of Contract | |
(1) | This Contract can be terminated with mutual agreement of the Parties after negotiation; | |
(2) | If this Contract cannot be performed resulting from any policy change of the relevant authorities, the Parties shall further negotiate the cooperation model. If no agreement can be reached, this Contract shall be terminated automatically. The Entrusting Parties shall return the performance deposit to the Entrusted Party in full amount without interest within 5 days upon the termination of this Contract; |
7
otherwise, the Entrusting Parties shall assume the default liability pursuant to this Contract. For the parts already performed in this Contract, the Entrusting Parties shall pay the management fee and bonus to the Entrusted Party pursuant to this Contract and shall assume the default liability for any payment delay or rejection pursuant to this Contract. | ||
12. | Dispute Resolution | |
The Parties unanimously agree that Xian Wanjiechangxin Medical Services Company Limited hereby waives all litigation rights in connection with this Contract; any dispute arising out of this Contract or in connection with this Contract shall be settled by negotiation between Changan Hospital and the Entrusted Party. If any dispute cannot be settled by negotiation, it shall be judged by the court where the project is located. | ||
13. | Effectiveness of Contract and Miscellaneous | |
(1) | The date when the following conditions are both satisfied shall be the effective date of this Contract: |
a. | This Contract is duly signed by the legal representatives or the authorized representatives of the Entrusting Parties with official seals and duly signed by the authorized representative of the Entrusted Party; | ||
b. | The Entrusted Party has paid the performance deposit. |
(2) | The Parties agree that the performance deposit under this Contract shall be paid directly to the account held by Xian Century Friendship Medical Technology R&D Co., Ltd. and the Entrusted Party has the right to take in the situation of the performance deposit from time to time. |
(3) | The Parties unanimously agree that the Entrusted Party can assign the liabilities, rights, and obligations under this Contract to any professional hospital management company affiliated to it. The Entrusted Party shall notify the Entrusting Parties of such assignment by letter and it is not required for the Entrusting Parties and the assignee to sign any further contract. |
(4) | The Contract shall be delivered in six copies, which shall have equal legal validity, with two for each party, while the rest shall be used by the Entrusting Parties for filing procedures. |
(5) |
The Contract was signed on August 1
st
, 2008.
|
8
1
2
3
4
5
6
Party A: | Party B: | |
(affixed with the seal of The Chinese
|
(affixed with the seal of Beijing Our | |
Peoples Liberation Army Navy General
|
Medical Equipment Development Co., | |
Hospital)
|
Ltd.) | |
|
||
Signature of Legal Representative:
|
Signature of Legal Representative: | |
(affixed with the signature of Yang Ye)
|
(affixed with the signature of Jun Song) |
7
1
Party A | Party B | ||||||
Year ***
|
*** | *** | |||||
Year ***
|
*** | *** | |||||
Year ***
|
*** | *** |
2
1. | To handle project approval procedures with relevant authorities and secure approvals in respect of the project of the Center proposed under the current phase; | ||
2. | To obtain all necessary qualification permits in line with applicable laws and regulations of the state; | ||
3. | To make contributions in line with Article 5(1) hereof; | ||
4. | To provide the premises required for the whole-body gamma knife system (equipment room, operating room, preparation room and office); | ||
5. | To put in place water and power utilities of the Center; | ||
6. | To work with Party B on the organization layout and construction plan; | ||
7. | To administer matters relating to the affiliations of the Centers staff with the CCP or other politics parties, the Labor Union and the Communist Youth League and medical affairs under the centralized administration of the Hospital; | ||
8. | To supervise the medical quality of the Center and in accordance with regulations and rules, to submit disputes with the board of directors, which shall have the power to consider and decide the settlements and resolutions of such disputes; and | ||
9. | Other matters mandated by the Center |
1. | To make contributions in line with Article 5(1) hereof; | ||
2. | To work with Party A to determine the management model and daily management work of the Center; | ||
3. | To work with Party A to engage top domestic and foreign experts and senior technicians; and | ||
4. | Other matters mandated by the Center. |
3
Party A:
Chinese Peoples Liberation
|
Party B: Shenzhen Aohua Medical | |
Army Navy General Hospital
|
Services Co., Ltd. | |
Authorized Representative:
|
Authorized Representative: | |
|
||
(Official stamp)
|
(Official stamp) | |
|
||
(affixed with the seal of The
Chinese Peoples Liberation Army
Navy General Hospital and the
signature of Yunyou Duan)
|
(affixed with the seal of Shenzhen Aohua Medical Services Co., Ltd. and the signature of Jun Song) | |
|
||
March 18, 1999
|
March 18, 1999 |
4
1
Party A | Party B | |||||
Year ***
|
*** | *** | ||||
Year ***
|
*** | *** |
2
1. | To make the contribution in accordance with Clause 1 of Article 5 hereof; | ||
2. | To obtain all permits and licenses required for the conduct by the Center of the business under this phrase as well as relevant approvals; | ||
3. | To be responsible for processing all application and filing procedures in respect of the pricing and medical insurance-related approvals and for obtaining relevant approvals; | ||
4. | To provide the premises required for the current phase (equipment room, operating room, preparation room, clinical room, office, and etc.), and put in place the water, power utilities and telephones of the Center; | ||
5. | To carry out the equipment room construction and refurbishment work as per the equipment installation-related technical requirements, as specified by the equipment vendors; and to procure thereby that the equipment room shall be in a condition fit for equipment installation; | ||
6. | To provide the existing technical personnel, therapy equipment and supporting equipment of the radiotherapy department of the Hospital; | ||
7. | To provide one special purpose ambulance; | ||
8. | To supervise the medical quality of the Center and in accordance with regulations and rules, to submit disputes with the board of directors, which shall have the power to consider and decide the settlements and resolutions of such disputes; and | ||
9. | Other matters mandated by the Center. |
1. | To make the contribution in accordance with Clause 1 of Article 5 hereof; | ||
2. | To work with Party A to develop the management model and management system of the Center; |
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3. | To work with Party A to engage for the Center top domestic and foreign experts and senior technicians, including carrying out the review and assessment for employment of existing staff; | ||
4. | To assign senior personnel with managerial experiences to participate in the management of the Center; | ||
5. | To develop and implement feasible advertisement and market promotion plans; and | ||
6. | Other matters mandated by the Center. |
4
5
Party A:
Chinese Peoples Liberation
|
Party B: Shenzhen Aohua Medical | |
Army Navy General Hospital
|
Services Co., Ltd. | |
Authorized representative:
|
Authorized representative: | |
|
||
(Official stamp)
|
(Official stamp) | |
|
||
(affixed with the seal of The
|
(affixed with the seal of Shenzhen | |
Chinese Peoples Liberation Army
|
Aohua Medical Services Co., Ltd. and | |
Navy General Hospital and the
|
the signature of Jun Song) | |
signature of Yunyou Duan)
|
||
|
||
September 27, 2003
|
September 27, 2003 |
6
1.1 | Party A agrees to lease to Party B one set of brand new imported PET-CT equipment. | ||
1.2 | Name of the Leased Assets: PET-CT, model number and specifications, quantity, unit price, total price, manufacturer (for details, please refer to Appendix I); |
1
1.3 | The price of the Leased Assets is approximately RMB *** (subject to the final bid price). |
2
6.1 | The ownership of the Leased Assets listed in the Appendix hereto shall belong to Party A. During the Lease Term, Party B shall have the right to use only. Party B may not sell, transfer, sub-lease, establish mortgage over, invest in the Leased Assets and may not adopt such other acts in respect of the Leased Assets which may infringe upon the ownership of the Leased Assets. | ||
6.2 | That Party B enters into a contract with any third party or that Party Bs status of legal person is changed will not change Party As ownership in respect of the Leased Assets. In the event that Party B is in bankruptcy, the Leased Assets shall not belong to the property in bankruptcy. | ||
6.3 | During the performance of the Contract, Party A shall have the right to check the use and completeness of the Leased Assets and under the circumstances wherein the use of such equipment is not subject to any influence, Party B shall provide such convenience. Without Party As written consent, Party B may not disassemble any parts and components of the Leased Assets nor change the premise used. | ||
6.4 | During the performance of the Contract, Party A shall have the right to establish mortgage over and transfer the Leased Assets, provided however that, Party A must report such mortgage and transfer to Party B and seek Party Bs advice prior to such mortgage and transfer. Party As mortgage and transfer shall not change Party Bs rights and interests as provided herein. Should damages are caused to Party B due to any mortgage and transfer of the Leased Assets, Party A shall be liable for compensation. |
7.1 | The rental shall be paid on a monthly basis. | ||
7.2 | After the Leased Assets have been delivered to the Premises for using the Leased Assets, the Parties agree that the Lease shall commence from [Day] |
3
4
7.4.2.6 | Charges for water, electricity, heat, and office expenses; | ||
7.4.2.7 | Cost for media and advertisement; | ||
7.4.2.8 | Necessary technical training and technical upgrading, academic interchange and the cost for hiring experts and consultants; | ||
7.4.2.9 | Other costs directly related to the operation of the Centre recognized by the Parties. |
(The foregoing expenses may not exceed *** of the total amount charged by the Centre for the current month at most. Should such expenses exceed ***, calculation will be based on ***. The exceeding portion shall be carried forward into the next month.) |
8.1 | Party As Rights and Obligations |
8.1.1 | Party A shall deliver to Party B the Leased Assets designated by Party B in a timely manner and assist the supplier in installing and commissioning. | ||
8.1.2 | Party A shall understand and grasp the operating situation of the leased equipment at any time based on the operating financial revenue and expenses of the Leased Assets as provided by Party B. When it is necessary, Party A may hire an independent accounting firm for conducting audit regarding the accounts of the PET-CT Centre. | ||
8.1.3 | Party A does not participate in Party Bs operation and management. | ||
8.1.4 | Party A or the entrusted agent of Party A shall have the right to examine and check the use and perfect condition of the Leased Assets. | ||
8.1.5 | Party A shall be responsible for providing the necessary technical information for the use of the Leased Assets. | ||
8.1.6 | Party A shall be responsible for the technical training and upgrading service in respect of the Leased Assets. | ||
8.1.7 | Party A shall delegate special personnel who shall be responsible for examining and coordinating the work. |
5
8.1.8 | Party A shall be responsible for coordinating with the supplier in respect of the repair and maintenance of the Leased Assets. | ||
8.1.9 | Party A shall be responsible for confirming jointly with Party B the proposal regarding the renovation and transformation of the operation room and the costs and expenses thereof. |
8.2 | Party Bs Rights and Obligations |
8.2.1 | Party B shall pay rental to Party A on a monthly basis. | ||
8.2.2 | Party B shall be responsible for processing all of the procedures for approvals in respect of the Leased Assets hereunder, including the approval for importation, application for the permit for deployment of large medical equipment for the Leased Assets, and etc. | ||
8.2.3 | Party B promises that the financial statement on the operation of the leased equipment and the relevant report Party B issues to Party A shall be in compliance with the relevant laws and regulations of China and shall truly and objectively show the financial status of Party B in connection with the Leased Assets. | ||
8.2.4 | To provide such premises, universal and auxiliary medical and communication equipment coping with the Leased Assets, to provide doctors, nurses and technicians and other professionals, and to provide the convenient conditions in respect of logistics services. | ||
8.2.5 | To assist Party B in handling the matters related to domestic equipment transportation, installation and commissioning. | ||
8.2.6 | To deal with medical management work, such as filing and report the charges and prices. | ||
8.2.7 | Party B may have 2 military patients to undergo free-of-charge diagnosis of the Centre per month (and among whom, one patient shall be entitled to full exemption of the diagnosis charge while two patients shall be entitled to half-exemption of the diagnosis charge). | ||
8.2.8 | Party B shall be responsible for the treatment and other medical decisions on the patients and shall independently be liable for the medical liability. |
6
The medical disputes related to the Leased Assets and other issues shall be handled according to the relevant provisions of the health administrative authorities. | |||
8.2.9 | Party B shall properly manage and safekeep the Leased Assets and delegate special personnel who shall be responsible for the daily work of the operation of the Leased Assets. | ||
8.2.10 | Party B may not dissolve this Contract in early manner nor amend this Contract because Party A has recovered the cost, or the integrated benefits of the PET-CT System continues to grow or the leadership of the Hospital is replaced. Party As legal interests may not be damaged because of early dissolution hereof in the event of other reasons beyond the force majeure, wars, and natural disasters. | ||
8.2.11 | During the Lease Term, in the event that Party B is required to introduce the same type of the equipment, Party A shall enjoy the absolute priority. |
9.1 | Delivery and Acceptance upon Examination: After the Leased Assets have been delivered to the premise for use, Party B shall examine the Leased Assets for acceptance pursuant to the content as provided in the Appendix I hereof. Should the Leased Assets fail to meet the agreed terms, Party B shall timely make a note on the delivery receipt and wait for Party A to settle it. | ||
9.2 | Technical acceptance upon examination: Upon installation and commissioning and completion of the diagnosis and treatment for 5 cases and patients, if Party B confirms that the technical requirements are met, it shall issue acceptance certificate to Party A within 5 days, and the delivery of the Leased Assets is deemed to be completed. The Lease Term shall commence and the charges for such 5 cases and patients shall be included in the revenue of the Leased Assets. |
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9.3 | In the event that the Leased Assets do not comply with the standard upon examination and acceptance, Party A shall be responsible for handling such matter. |
10.1 | During the Lease term, Party A may, by installments, buy property integrated insurance in respect of the Leased Assets with the insurance company based on the total amount of the Leased Assets. The insurance beneficiary shall be Party A. The duplicate copy of the insurance contract shall be kept by Party B. | ||
10.2 | During the Lease term, in the event of any incident of insurance liability, Party B shall immediately notify Party A and cooperate with Party A for providing the report on the accident cause and the relevant information, and shall, in conjunction with Party A, timely process the claim with the insurance company. The Contract shall continue to perform. Should such insurance claim fail to be settled due to Party Bs delay in processing the insurance claim, Party B shall be liable for the losses incurred. | ||
10.3 | In the event that any third party (patient) suffers from any damages due to the quality issue of the Leased Assets, Party A shall be responsible for making a claim against the manufacturer or operator of the Leased Assets. Before the claim can successfully be made, the expenses shall be borne by Party A. Should the amount claimed is insufficient, the insufficient portion shall be included into the Hospitals own expenses which shall be borne by the PET-CT Centre. | ||
10.4 | In the event that any third party (patient) suffers from any damages due to Party Bs fault in using the Leased Assets, Party A shall be liable for such damages. The expenses shall be included into the Hospitals own expenses which shall be borne by the PET-CT Centre. |
8
Article 11 | Disposal of the Leased Assets Upon Expiry of the Lease Upon the expiry of the Lease Term, the Leased Assets shall be returned to Party A and a third party shall be entrusted to handle the scrap procedure. |
12.1 | For purposes of ensuring the reasonable and effective use of the Leased Assets and ensuring the Lessors legal rights and interests, Party B agrees that Party A shall conduct financial audit in respect of the Centre. | ||
12.2 | The measures regarding the financial audit shall include that Party A shall have the right to supervise, at any time, the number of people seeking medical advice, price, the Centres cost and expenses, the wages and bonus amount of the personnel working in the Centre. |
13.1 | In the event that Party A unilaterally terminates this Contract in early manner in violation of the provisions hereof, Party A shall compensate Party B the total sum of the average monthly revenue for the three months prior to the termination hereof. | ||
13.2 | Party A shall be responsible for equipment maintenance and technical service and technical upgrading and shall ensure the normal switch-on rate of the equipment. In the event that the equipment fails due to its own quality issue and the impact on treatment lasts for over 30 days, Party A shall provide compensation and the compensation amount shall be negotiated by the Parties. | ||
13.3 | During the Lease Term, if Party B has introduced any medical equipment which has similar function of the Leased Assets through a third party in violation of Article 8.11 hereof, Party B shall compensate Party A the losses incurred therefrom in a lump-sum payment, and the Parties shall terminate this Contract in early manner. Amount of loss = Remaining Lease Term × the monthly average rental prior to the breach. |
9
13.4 | Should Party B delay in paying the rental, such delay shall not exceed three months. And Party B shall pay to Party A a default fine equivalent to 0.05% of the amount delayed in payment on a daily basis. | ||
13.5 | In the event that Party B breaches the Contract in any of the following manners, Party A shall have the right to dissolve this Contract and Party B is required to pay an overdue penalty and shall immediately pay all due outstanding and undue rental. As for the undue monthly rental, it is calculated as 2.5% of the total price of the Leased Assets. And the Leased Assets shall be recovered. |
13.5.1 | Any monthly rental owed by Party B is in arrears for more than three months; | ||
13.5.2 | Party B has disposed the Leased Assets in its sole discretion in violation of the provisions of this Contract; | ||
13.5.3 | The Leased Assets are seriously damaged or lost due to any improper use, intentional damage or careless storage by Party B. |
13.6 | Should Party A breach the Contract in the foregoing manner, Party A shall be liable for Party Bs lawsuit cost, legal counsel fees and other costs arising from Party Bs realization of the creditors rights. | ||
13.7 | During the Lease Term, if the military patient paid the relevant fees which are lower than the verified price charged (except for the Centres free-of-charge diagnosis cost for the two military personnel per month), the insufficient portion shall be supplemented by Party B and shall be deducted from Party Bs income. | ||
13.8 | In the event that either party unilaterally proposes a reduction or exemption for patients other than the military personnel, the proposing party shall bear the price difference which shall be deducted from such |
10
partys income. Any amount mutually recognized by the Parties may be included in the expenses of the PET-CT Center. |
Any and all disputes in connection with this Contract shall be settled by the Parties through consultation. If no settlement can be reached through consultation, an action may be brought before the Peoples Court in the place where the Leased Assets are located. |
The Appendix to this Contract is an integral part hereof and shall have the equal legal validity as that of the main text hereof. |
This Contract shall become effective after being signed and stamped by both Party A and Party B. |
17.1 | This Contract shall automatically terminate upon the expiry of the Lease Term. | ||
17.2 | All claims and indebtedness arising from the performance of this Agreement by Party A and Party B shall be terminated upon full repayment of all debts, including all rental payments, default penalties, indemnification, and so on. | ||
17.3 | In case of impossibility of performance of the Contract or use of the Leased Assets due to war, natural disaster, force majeure and other factors, this Contract shall be terminated and neither party shall be liable to or have any rights against the other party. | ||
17.4 | In case of impossibility of performance of the Contract due to any change in the policy and regulation of the State or the locality, resulting into the |
11
fact that this Contract fails to be performed, but without affecting the use of the Leased Assets, this Contract may be terminated in early manner. The Parties shall confirm the proposal of solution through consultation. | |||
17.5 | In the event that the military adjusts its policy, resulting into the fact that this Contract fails to be performed, but without affecting the use of the Leased Assets, this Contract may be terminated in early manner; provided, however, that Party B is required to make a lump-sum payment to purchase such leased equipment in an amount equal to: *** (see Appendix I) minus *** | ||
Or, subject to safeguarding the legal rights and interests of the Parties, such
matter may be settled through consultation.
Purchase Price = *** |
18.1 | The Parties hereto have carefully read through all the terms hereof. Reasonable manner has been adopted to urge the Parties to pay attention to the terms regarding exemption or restriction on their responsibilities as provided herein. And per the requirements of the Parties, explanation has been made in respect of the relevant terms. | ||
18.2 | The Parties hereto have authorized their respective representatives to sign this Contract. All terms of this Contract are a true expression of the intents of the Parties and shall have legal binding effect on the Parties. |
Article 19 | The original of this Contract and the Appendix hereto shall be prepared in four copies while Party A and Party B shall each hold two copies hereof. |
12
Lessor: | Lessee: | |
Shanghai Medstar Medical Investment
Management Company Limited (affixed with its corporate seal) |
the Chinese Peoples Liberation Army
Navy General Hospital(affixed with its corporate seal) |
|
Legal Representative (or Authorized
Representative): |
Legal Representative (or Authorized Representative): | |
(Affixed with the signature of
Zheng Chen)
|
(affixed with the signature of Yangming Qian) |
Date of Execution: | Date of Execution: | |
29 September, 2006
|
29 September, 2006 | |
|
||
Bank with account opened:
|
Bank with account opened: | |
Gaoqiao Branch of Agricultural Bank
of China, at Waigaoqiao, Shanghai
|
Fuwaidajie Branch of Industrial and Commercial Bank of China | |
Account Number: 03-341600040016559
|
Account Number: 0200049209026700101 | |
Telephone: 021-58367007
|
Telephone: 010-66958114 | |
Facsimile: 021-58368131
|
Facsimile: 010-66958034 |
13
1
Party A: |
Chinese Peoples Liberation Army Navy General Hospital
(hereinafter referred to as Party A)
Legal Address: No. 6 Fucheng Road, Beijing Postal Code:100048 Legal Representative: QIAN, Yangming |
Party B: |
Shenzhen Aohua Medical Services Company Limited (hereinafter
referred to as Party B)
Registered Address: Room 3702, Jinmao Plaza, No. 4028 Jintian Road, Shenzhen Postal Code: 518035 Legal Representative: YANG, Jianyu |
2
Name of the Center: | Aohai Radiotherapy and Diagnosis Research Center (hereinafter referred to as the Center). |
Address of the Center: | Within the Chinese Peoples Liberation Army Navy General Hospital |
Article 6 | Contribution by the Parties |
6.1 | Party B shall be responsible for contributing the fourth phase medical equipment, including: |
6.1.1 | One set of the three-dimensional stereotactic Gamma Ray Whole-body Treatment System (Whole-body Gamma Knife); and one set of Siemens image-guided high-energy linear accelerator; | |
6.1.2 | The total investment amount shall be RMB *** (such amount for the invested equipment shall be wire transferred, before actual payment, by Party B to Party A, which shall then pay it to the equipment vendor). The specific model and specifications, equipping and price of the equipment shall be determined as per the actual bidding and procurement results; | |
6.1.3 | Party B shall advance a payment in the amount of approximately RMB *** in respect of the construction and furnishing expenses of the equipment room and auxiliary rooms thereof. The required expenses shall be included into the operating costs of the fourth phase cooperation project. |
6.2 | Party A shall be responsible for providing the following: |
6.2.1 | A premises space of approximately 350 sq. m. for the equipment room and auxiliary room thereof; | |
6.2.2 | Infrastructure facilities, such as water, electricity, heating and communications, etc.; | |
6.2.3 | Technical personnel and professional personnel; and |
3
6.2.4 | All the legal permits and licenses required for the business operations of the Center. |
6.3 | No Party may withdraw the property used for the cooperation project without the consent of the other Party. |
Article 7: | Term of Cooperation: |
Article 8 | The Centers Revenue |
Article 9 |
The Centers Expenses (the Centers Operating Costs):
|
9.1 | Costs of human resources: wages of the newly hired personnel of the Center; the bonuses, welfare benefits, etc. of the Centers personnel; external experts cost and consultation fee; training cost, education expenses, scientific research expenses, etc.; | |
9.2 | Equipment operation costs: expenses for repair and maintenance of the equipment, costs of consumptive materials, costs of auxiliary parts, costs for replacement of radiation sources, etc.; | |
9.3 | Medical related costs: cost of medicines, cost of medical consumptive materials, sterilization cost, cleansing cost, anaesthetization cost, costs for the handling of medical disputes, medical indemnity, etc.; | |
9.4 | Office expenses: travel and accommodation cost, entertainment cost, transportation fee, telephone fee, postal and telecommunication fee, water, electricity and heating charges, health and hygiene expenses, etc.; | |
9.5 | Advertisement and promotional cost: academic exchange expenses, expenses for expert-related events, advertising and promotional expenses, expert assistance and service fee, etc.; | |
9.6 | Equipment insurance premium; | |
9.7 | Management fee (***); | |
9.8 | Other expenses: relevant expenses required for the normal operation of the Center. |
Article 10 | Profit Allocation |
4
10.1 | Three-dimensional stereotactic Gamma Ray Whole-body Treatment System (Whole-body Gamma Knife): | |
From ***, Party A and Party B shall each obtain *** of the Profit of the Center. | ||
10.2 | Siemens image-guided high-energy linear accelerator: | |
From ***, Party A shall obtain *** of the Profit of the Center and Party B shall obtain *** of the Profit of the Center; and | ||
From ***, Party A shall obtain *** of the Profit of the Center and Party B shall obtain *** of the Profit of the Center. |
5
16.1 | To study and process, in conjunction with Party B, the organizational set-up and construction plan of the Center and to attend to the actual construction work of the Center; | |
16.2 | To provide the land required for the premises of the Center, and to put in place the infrastructure facilities including water, electricity, heating, etc; | |
16.3 | To arrange or recommend such medical, nursing and technical personnel as required for the operation of the Center and to provide such personnel seconded by Party B or recruited by the Center with necessary working conditions (among others, the medical and nursing personnel shall be granted with the medical practice qualification at the Hospital.) ; | |
16.4 | To coordinate the relationship between the Center and the divisions of Party A; | |
16.5 | To handle, with respect to all the equipment of the Center, approval application filings with relevant authorities in relation to large medical equipment procurement permits, environmental evaluation, pricing, medical insurance and other procedures as well as work related to the bidding of the equipment; | |
16.6 | To supervise the medical treatment quality of the Center, to include the Center into the Hospitals quality management system, and to implement the review, |
6
appraisal and incentive and disciplinary matters based on the Hospitals existing management system; | ||
16.7 |
To conduct the maintenance and repair of the equipment in conjunction with Party B; and
|
|
16.8 | To coordinate for the handling of other matters related to the operation of the Center. |
17.1 | To handle, in conjunction with Party A, the tendering and procurement work in relation to the equipment required for the Center pursuant to the subject matter of the contract; coordinate the transportation, installation and commissioning of the equipment; and provide Party A with relevant documentation of the procured equipment; | |
17.2 | To assist Party A to submit to the competent health authority approval application filings in relation to large medical equipment procurement permits and other procedures; | |
17.3 | To make contacts and arrangements in connection with the equipment operation training for the medical and nursing personnel of the Center; | |
17.4 | To contact or recommend relevant Chinese and foreign medical experts; | |
17.5 | To carry out, in conjunction with Party A, the construction and upgrading work of the Centers digital medical treatment network system; | |
17.6 |
To assist the Center to carry out the marketing and promotion work;
|
|
17.7 | To handle other matters entrusted by Party A; and | |
17.8 | During the Term of Cooperation, if Party A needs to further introduce the same type of equipment, Party B shall have the right of priority. |
7
24.1 | Party A privately and unilaterally terminates earlier or amends this Contract in violation of the provisions hereof ; | |
24.2 | Party A privately and unilaterally disposes of the equipment invested by Party B (including but not limited to sale, sub-lease, relocation, transfer, etc.) in violation of the provisions hereof; | |
24.3 | Without consultation with, and consent of, Party B, Party A remains in arrears with the payment of any installment of the profit allocable to Party B for more than 6 months or causes the equipment to cease its normal provision of medical treatment services to patients for more than 30 days for reasons attributable to Party A (except for equipment failures). | |
24.4 | Party A otherwise grossly violates the provisions hereof. |
8
24.1 | Party B privately and unilaterally terminates earlier or amends this Contract in violation of the provisions hereof; | |
24.2 | The carrying out by Party B of a mortgage or transfer in respect of the equipment under this Contract has a material effect on the rights and interests of Party A; | |
24.3 | Party B otherwise grossly violates the provisions hereof. |
9
Party A: Chinese Peoples Liberation
Army Navy General Hospital
|
Party B: Shenzhen Aohua Medical Services Company Limited | |
|
||
[corporate seal]
|
[corporate seal] | |
|
||
Signed by Legal Representative
or Authorized Agent:
|
Signed by Legal Representative or Authorized Agent: | |
|
||
(affixed with the seal of The
Chinese Peoples Liberation Army
Navy General Hospital and the
signature of Yunyou Duan)
|
(affixed with the seal of Shenzhen Aohua Medical Services Co., Ltd. and the signature of Jun Song) | |
|
||
Date of Execution: 8 July, 2009
|
Date of Execution: 8 July, 2009 |
10
1. | All tumor-related divisions of Changan Hospital; | |
2. | All divisions covered by the service-only management agreements for medical equipment, which were entered into by and between Changan Hospital or Xian Century Friendship Medical Technology R&D Co., Ltd. and the Entrusted Party or any affiliate of the Entrusted Party. |
1. | Subject to the leadership of the Entrusted Party, efforts shall be made to permit the existing management team of Changan Hospital to fully deploy its powers and potential for management in principle of maintaining stable development ; | |
2. | Any adjustment or change to the management work of the Entrusted Party shall be |
1
discussed and agreed with the Entrusting Party; | ||
3. | The Entrusted Party shall in principle appoint representatives to manage the matters in respect of administration and accounting and shall, where the conditions are equal, use on a priority basis existing employees of Changan Hospital. |
1. | When any decision or document is required to be made or issued by Changan Hospital in respect of external parties, such decision or document shall not acquire legal force unless and until it shall have been signed by both the Entrusting Party and the Entrusted Party and affixed with the official seal. | |
2. | Any decision related to the divisions provided in Article 1 hereof shall acquire legal force once it shall have been solely signed by the Entrusted Party and Changan Hospital shall affix its official seal thereon at the request of Entrusted Party. | |
3. | Any decision related to the Other Divisions provided in Article 2 hereof shall acquire legal force once it shall have been solely signed by the person in charge of Changan Hospital and affixed with the official seal. |
1. | This Supplemental Agreement shall become effective upon execution and sealing by each of the Parties. | |
2. | This Supplemental Agreement will be terminated either as a result of the termination of the Original Contract or by the mutual agreement of the Parties. | |
3. | This Supplemental Agreement shall be made in six originals in Chinese only, with each Party hereto holding two copies. Each of the copies shall have the same legal force and effect. |
2
4. | In the event of any discrepancy between the Original Contract and this Supplemental Agreement, this Supplemental Agreement shall prevail. |
3
4
Party A : | Beijing Our Medical Equipment Development Company |
Address: | No. 3 Qianmen East Avenue, Beijing (Room 408, Office Building, Capital Hotel) |
Party B : |
Shenzhen Aohua Medical Services Co., Ltd.
|
Address: | Room 2208, Dianzi Keji Building, Shennanzhonglu Road, Shenzhen |
Party C : |
Chinese Peoples Liberation Army Navy General Hospital
|
Address: | No. 6 Fucheng Road, Beijing |
1. | Party A and Party C entered into the Agreement concerning the Establishment of the Aohai Radiotherapy Treatment and Diagnosis Research Center on 19 September, 1995, wherein are specified their respective percentages of equity interests in the Aohai Radiotherapy Treatment and Diagnosis Research Center (hereinafter referred to as the Center). | |
2. | Party A, Party B and Party C each hereby confirm the foregoing agreement and all matters set out therein. | |
3. | In order to facilitate the management work, improve the ownership structure, and enable the Center to achieve better operative results and procure the Parties a satisfactory future, Party A hereby transfers for free all of its equity interest in the Center to Party B. | |
4. | Party B agrees to accept Party As transfer of such equity interest. Commencing from the effective date hereof, Party B shall enjoy all of the original rights of Party A to the Center and shall assume all of the obligations originally assumed (or to be assumed) by Party A (including all of the rights and obligations attached to such equity interest prior to the transfer hereunder). | |
5. | Party C agrees to the foregoing transfer. | |
6. | This Agreement shall become effective upon execution and sealing by each of Party A, Party B and Party C. This Agreement shall be made in four originals, with one copy to be held by each of Party A, Party B and Party C, and one copy to be submitted to the relevant authority for filing. Each of the four copies shall have the same legal force and effect. |
Party A: |
Beijing Our Medical Equipment Development Company
(Corporate seal) |
Representative: | (Signature) |
Part B: |
Shenzhen Aohua Medical Services Co.,Ltd.
(Corporate seal) |
Party C: |
Chinese Peoples Liberation Army Navy General Hospital
(Corporate seal) |
Party A:
|
Chinese Peoples Liberation Army Navy General Hospital | |
Address:
|
No. 6 Fucheng Road, Beijing | |
Postal code:
|
100037 | |
Telephone:
|
010-68587733 | |
Facsimile:
|
010-68581507 | |
Legal Representative:
|
Duan Yunyou | |
Title:
|
President | |
|
||
Party B:
|
Shenzhen Aohua Medical Services Co., Ltd. | |
Address:
|
17/F, Guomao Plaza, Renmin South Road, Shenzhen | |
Postal code:
|
518014 | |
Telephone:
|
0755-82211708 | |
Facsimile:
|
0755-82213690 | |
Legal Representative:
|
Song Jun | |
Title:
|
President |
1. | In accordance with the relevant terms of the Supplemental Agreement Concerning the Development of the Aohai Radiotherapy Treatment and Diagnosis Research Center (Contract Number: 2003-S-008, hereinafter referred to as the Contract) dated 27 September, 2003, the Parties agree that Party B shall contribute one set of EEG Stereotactic System (valued at RMB Four Million) to the third phase of the Center in addition to its earlier contribution of the four sets of radiotherapy equipment in an aggregate value of RMB Eighteen Million Eight Hundred Thousand (18.8 million) to the third phase of the Center, to the effect that the contribution of Party B to the third phase of the Center shall be in a total amount of RMB Twenty Two Million Eight Hundred Thousand (22,8 million). | |
2. | There shall be established a relatively independent Epilepsy Center, the management work of which shall be assisted by the Head Gamma Knife Center and the Hospitals Neurosurgery Division. The personnel of said Center shall be |
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treated in a relatively independent manner and the finances of said center shall be accounted for independently. | ||
3. | The responsibilities of the Parties, the term of cooperation, the profit sharing arrangement, the management body and other matters in respect of said center shall be governed by the Contract. | |
4. | Any matters not covered herein shall be separately dealt with by the Parties through discussions. | |
5. | This Agreement shall be made in six originals and shall become effective upon execution and sealing by the Parties. This Agreement is a supplementary document to the Contract and shall have the same force as the Contract. Each Party shall hold three copies. |
Party A:
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Party B: | |
Chinese Peoples Liberation Army
Navy General Hospital
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Shenzhen Aohua Medical Services Co., Ltd. | |
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(affixed with corporate seal and the
signature of Yunyou Duan)
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(affixed with corporate seal and the signature of Jun Song) | |
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15 September, 2004
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15 September, 2004 |
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1. | Considering that the investment funds raised by Party B for the project constitute purpose-bound special funds and will be made available only until 31 December, 2003, after which date they shall be forfeited, Party A shall duly complete the tendering procedures for the equipment by 20 December, 2003, failing which Party A shall assume the liabilities arising out of the non-availability of the funds of Party B. | |
2. | Party A shall complete the construction of the equipment room and therapy rooms by 31 January, 2004 so that the installation and commissioning of the equipment will not be affected. |
| Ascendium Group Limited (incorporated in the British Virgin Islands) | |
| China Medical Services Holdings Limited (incorporated in Hong Kong) | |
| Cyber Medical Network Limited (incorporated in Hong Kong) | |
| CMS Hospital Management Co., Ltd. (incorporated in the PRC) | |
| Beijing Xing Heng Feng Medical Technology Co., Ltd. (incorporated in the PRC) | |
| Our Medical Services, Ltd. (incorporated in the British Virgin Islands) | |
| Shenzhen Aohua Medical Services Co., Ltd. (incorporated in the PRC) | |
| Shenzhen Aohua Medical Leasing and Services Co., Ltd. (incorporated in the PRC) | |
| China Medstar Pte. Ltd. (incorporated in Singapore) | |
| Medstar (Shanghai) Leasing Co., Ltd. (incorporated in the PRC) |
/s/ Jingtian & Gongcheng
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To:
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Concord Medical Services Holdings Limited | |
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18/F, Tower A, Global Trade Center | |
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36 North Third Ring Road East | |
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Dongcheng District | |
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Beijing, Peoples Republic of China, 100013. |
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Re: | Concord Medical Services Holdings Limited | ||
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Consent to References to Frost & Sullivan Report |
Yours faithfully,
For and on behalf of Frost & Sullivan [Seal of Frost & Sullivan] |
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/s/ Glenn Xuchao Hou | ||||
Name: | Glenn Xuchao Hou | |||
Title: | Consulting Director, Healthcare Practice, Frost & Sullivan China | |||