EX-10.15





Exhibit 10.15





CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




REDACTED Version of Exhibit 10.15

Translation




CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT

HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES

AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN

REQUESTED WITH RESPECT TO THE OMITTED PORTION.




Supplemental Agreement

Concerning the Development of

the Aohai Radiotherapy Treatment and Diagnosis Research Center




(Contract Number: AMS20090601)




June 2009




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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




Parties to the Contract:




			
	Party A:	 	Chinese People’s 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





Section I General Provisions




Article 1




Deploying their respective resource advantages, Party A and Party B entered into a Cooperation
Contract on 19 March, 1995 and thereby jointly established “Aohai Radiotherapy Treatment and
Diagnosis Research Center” (hereinafter referred to as the “Center”) and invested, for such initial
phase, the OUR-XGD Rotary Focus Gamma Knife )(head Gamma Knife) in the Center; entered into a
supplementary contract on 18 March, 1999 and further invested, for the second phase, the
three-dimensional stereotactic Gamma Ray Whole-body Treatment System (Whole-body Gamma Knife); and
entered into a supplementary contract (Contract Number 2003-S008) on 27 September, 2003 and further
invested, for the third phase, the linear accelerator for medical uses, simulated stereotactic
machine, three-dimensional conformal radiotherapy treatment plan and system, the endogenic field
hyperthermia machine; and further entered into a supplementary agreement on 15 September, 2004 and
further invested, for the third phase, the EEG Stereotactic System to carry out the diagnosis and
treatment of epilepsy diseases; and in the process, Party A and Party have developed the tumor
Center into a medical treatment center which features first-class technology, first-class talents,
a relatively high domestic reputation, and the integration of medical treatment and scientific
research and which is capable of providing systematic, sound comprehensive diagnosis and therapy
services in relation to tumors of different phases and types for relevant patients. Thanks to the
joint efforts of the Parties, the Center has achieved good social and economic results from all of
the first three phases investments.



Article 2




Based on the principle of equality, mutual benefit and risk sharing, through friendly discussions,
the Parties, desiring to further invest the fourth phase equipment in the Center on the basis of
their existing cooperation and thereby meet the needs of patients and further enhance the capacity
of the equipment of the Center, hereby agree as follows in respect of relevant matters.



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Section II Basic Introduction of the Center




Article 3





			
	Name of the Center:      	 	“Aohai Radiotherapy and Diagnosis Research Center”
(hereinafter referred to as the “Center”).





Article 4




			
	Address of the Center:      	 	Within the Chinese People’s Liberation Army Navy
General Hospital





Article 5




Business Scope of the Center:




To carry out diagnosis, radiotherapy, scientific research, academic work in respect of tumors and
related diseases as well as other medical services. All activities of the Center shall be in
compliance of the laws and regulations of the People’s Republic of China. All medical treatment
activities of the Center shall observe relevant medical treatment rules and regulations, common
diagnostic operation procedures and quality control standards, as well as relevant requirements of
the Hospital.



Section III Mode of Cooperation





			
	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





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	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:





The term of cooperation for the fourth phase equipment contribution shall be ten years, commencing from
the date on which the treatment and operation formally begin upon approval by relevant competent
authorities and readiness of the fourth phase equipment contributed by Party B (the specific date
shall be agreed and confirmed in writing by the Parties).



Section IV The Center’s Revenue, Expenses and Profit Allocation





			
	Article 8	 	The Center’s Revenue





The Center’s Revenue shall include all revenues generated from the examination and treatment by
using the equipment contributed for the current phase.




			
	Article 9	 	The Center’s Expenses (the Center’s Operating Costs):






The Center’s expenses shall include the following:




	9.1	 	Costs of human resources: wages of the newly hired personnel of the Center; the bonuses,
welfare benefits, etc. of the Center’s 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





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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




During the Term of Cooperation, the Parties shall allocate the net revenue of the Center (the
Profit of the Center) generated from the fourth phase equipment contributed as follows.




	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.





Section V Management Body of the Center




Article 11




The Center shall establish a management committee and the duties of the management committee shall,
in principle, be dealt with in accordance with the provisions of the original contract. Material
matters such as amendment of the cooperation contract of the Parties shall be subject to the
agreement and confirmation of both Parties.



Section VI Financial Management of the Center




Article 12




The Center shall formulate its financial and management procedures, shall establish a finance
office and shall independently account for its finances, all in accordance with the relevant system
of the State and the administration requirements of the Army.



Article 13




The Center’s medical charges shall be centrally collected by the Hospital on behalf of the Center.
The Hospital shall create a relevant fee charge subject for the Center and the Center’s finance
office shall retain the return receipt copies of fee charge vouchers for its book-keeping purposes
and shall check and settle the accounts with the Hospital as well as remit the relevant profit
allocations on a monthly basis. No Party hereto and no individual shall collect the charges
privately. In the event of any private fee collection, the responsible person shall be imposed a
penalty double the privately collected amount when such allegation has been found true.



Article 14




The Center’s finance personnel shall settlement the accounts on a monthly basis pursuant to the
allocation arrangement as provided herein and the 5th day of each month shall be the
settlement day, on which date the Center and Party A shall jointly verify the income



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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




and expenses of the Center. The amount allocable to Party B after deduction of the Center’s
operating costs shall be paid to Party B in a lump-sum within 5 working days of such settlement
day.



Article 15




Considering the special status of Party A, namely, its status as a hospital of the army, the
Center’s equipment shall be reasonably used to provide military servicemen with medical services.
The three-dimensional stereotactic Gamma Ray Whole-body Treatment System (Whole-body Gamma Knife)
will annually provide 15 military servicemen with free treatment, in the event of which the medical
personnel of Party A shall be assured of the appropriateness of the therapy for relevant diseases
and shall escalate such free treatment request to the president of the Hospital for approval
pursuant to relevant procedures before carrying out such free treatment. Should the quota of such
free treatment be exceeded, relevant treatment charges shall be calculated on a cost basis and
shall be borne by Party A. The Siemens image-guided high-energy linear accelerator will, in
accordance with the treatment rules applicable to the existing accelerator, provide free service to
military servicemen on the basis of the needs required of reasonable medical treatment, provided
that, where such equipment is used to carry out the image-guided intensity-modulated radiotherapy,
the medical personnel of Party A must strictly be assured of the appropriateness of the therapy for
relevant diseases and shall escalate such free treatment request to the president of the Hospital
for approval pursuant to relevant procedures before carrying out such free treatment, Such
equipment will annually provide 10 military servicemen with free treatment. Should such quota be
exceeded, relevant treatment charges shall be calculated on a cost basis and shall be borne by
Party A.



Section VII
Rights and Obligations of the Parties




Article 16




Party A’s rights and obligations:




	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
Hospital’s quality management system, and to implement the review,





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	 	 	appraisal and incentive and disciplinary matters based on the Hospital’s 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.





Article 17




Party B’s rights and obligations:




	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
Center’s 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.





Section VIII
Ownership and Insurance of Equipment




Article 18




During the Term of Cooperation provided herein, the ownership of the equipment contributed by Party
B to the Center shall belong to Party B. Upon the expiry of the Term of Cooperation, the ownership
of such equipment shall belong to Party A.



Article 19




The ownership of the equipment separately procured by the Center after its establishment with its
revenue shall belong to the Center. Upon the expiry of the Term of Cooperation, the ownership of
such equipment shall belong to Party A.



Article 20




Provided that the performance hereof shall not be affected, Party B shall have the right to
mortgage or transfer the ownership of the equipment contributed by it, provide that, however, the
prior consent of Party A will be required. The carrying out by Party B of such mortgage or
transfer shall not modify Party A’s rights and interests provided herein and Party B shall be
liable to indemnify Party A against any damage suffered by it as a result of such mortgage or
transfer.



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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




Article 21




Party B may take out insurance with an insurer in respect of the equipment set out herein, with the
type, value and term of insurance coverage to be determined in accordance with relevant terms of
such insurer, and the insurance beneficiary shall be Party B or a third party designated by Party
B. The insurance contract shall be notified to Party A and a duplicate copy of it shall be kept by
Party A.



Section IX Breach of Contract




Article 22




If a Party fails to perform its obligations or grossly breaches the provisions under the Contract
and thereby prevents the Center from being operated or from achieving the business objectives
hereunder, such Party shall be deemed a breaching Party and shall be deemed to have terminated this
Contract and the non-breaching party shall have the right to claim against the breaching party and
terminate this Contract.



Article 23




If Party A delays to remit and pay the revenue allocable to Party B for over two months, then Party
A shall pay to Party B an overdue fine equal to 0.05% of the late payment amount for each of the
days so delayed, except where such delay has been caused by a force majeure event.



Article 24




Should Party A commit any of the following breaches, Party B shall have the right to terminate this
Contract and Party A shall be obligated to pay breach penalty to Party B.
Such breach penalty shall be equal to: Party B’s total income for the previous year × the remainder
of the Term of Cooperation




	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.





Article 25




Should Party B commit any of the following breaches, Party A shall have the right to terminate this
Contract and Party B shall be obligated to pay default penalty to Party A.



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Such default penalty shall be equal to: Party A’s total income for the previous year × the
remainder of the Term of Cooperation




	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.





Section X Amendment, Extension, Termination and Dissolution of the Contract




Article 26




Any amendment, modification or termination of this Contract and its appendix shall become effective
only if a written instrument has been executed by the Parties hereto upon mutual consultation and
agreement.



Article 27




If the Parties decide to extend the term of cooperation, they shall either enter into a
supplementary agreement for the extension of such term of cooperation 6 months prior to the expiry
of such term of cooperation or shall enter into a separate cooperation contract.



Article 28




If, due to war, natural disasters, force majeure events, or like factors, it becomes impossible to
perform this Contract or use the equipment, the Parties may terminate this Contract earlier without
any liabilities to each other.



Article 29




If, due to reasons attributable to the regulations of the state or local authorities, it becomes
impossible to perform this Contract but the use of the equipment remains unaffected, this Contract
may be terminated earlier, provided that the Parties shall determine a solution through mutual
consultations.



Article 30




If, due to adjustments in the policy of the army, it becomes impossible to perform this Contract
but the use of the equipment remains unaffected, this Contract may be terminated earlier, provided
that Party A shall be obligated to buy back, on an one-off basis, the equipment from Party B and
provided further that the specific terms therefor shall be determined through mutual consultations,
having due regard to the protection of the legal rights and benefits of the Parties.



Section XI Miscellaneous




Article 31




Any dispute arising from the performance hereof shall be resolved through friendly
consultations, failing which such dispute shall be referred to the local court of Beijing for
adjudication.



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Article 32




Any notice involving the rights and obligations of either Party shall be in writing and the
addresses set out herein shall be the addresses of the Parties for the receipt of notices.



Article 33




This Contract shall become effective once it is signed and sealed by the Parties.



Article 34




No change to the legal representatives of either Party shall affect the normal performance of this
Contract.



Article 35




Any matter not covered herein may be dealt with by a separate supplementary agreement, which shall
have the same legal force and effect as this Contract.



Article 36




The Appendix hereto shall be an integral part hereof and shall have the same legal force and effect
as this Contract.



Article 37




This Contract shall be made in four originals, with each Party holding two copies, each of which
shall have the same legal force and effect.



Article 38




This Contract is made and entered into in [     ] City on [Day] [Month], 2009



	 	 	 
	Party A: Chinese People’s 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 People’s 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







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