EX-10.13







Exhibit 10.13




CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




REDACTED Version of Exhibit 10.13

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 No.: 2003-S-008

Time of Execution: September 27, 2003

Place of Execution: Shenzhen, Guangdong




Section I General Provisions



In accordance with applicable PRC laws and regulations, through friendly negotiations and on the
basis of the principle of equality and mutual benefit, Chinese People’s Liberation Army Navy
General Hospital and Shenzhen Aohua Medical Services Co., Ltd. entered into a cooperation contract
on September 15, 1995 whereby they decided to establish Aohai Radiotherapy Treatment and Diagnosis
Research Center (“Center”) at Chinese Peoples’ Liberation Army Navy General Hospital in Beijing
and invested in connection with the initial phase the OUR-XGD type rotating focalizing gamma knife
(“ Head Gamma Knife”) in the Center; and entered into a supplementary contract on March 18, 1999,
whereby they invested in connection with the second phase the stereoscopic-directional gamma ray
whole-body therapy system (“Body Gamma Knife”) in the Center. Thanks to the joint efforts of the
Parties, the Center has achieved good social and economic effect during both the initial phrase and
the second phase. The Parties are willing to continue to increase their contribution in respect of
the equipment of the Center on the basis of their existing original cooperation and hereby enter
into this supplementary contract.




Section II Parties of Cooperation




Article 1 Parties of Cooperation

Party A: Chinese People’s Liberation Army Navy General Hospital

Address: No. 6 Fucheng Road, Beijing               Postal Code: 100037

Tel: 010-68587733 Fax: 010-68581507

Legal Representative: DUAN, Yunyou

Title: President




Party B: Shenzhen Aohua Medical Services Co., Ltd.

Address: Floor 17, Guomao Plaza, Renmin South Road, Shenzhen Postal Code: 518014

Tel: 0755-2255708               Fax: 0755-2251690




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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




Legal Representative: SONG, Jun

Title: President




Section III Purpose of Cooperation and Business Scope



Article 2 Purpose of Cooperation: Based on the OUR-XGB rotating focalizing gamma knife (Head Gamma
Knife), as invested in the initial phrase, and the stereoscopic-directional gamma ray whole-body
therapy system (“Body Gamma Knife”), as invested in the second phase, the Parties intend to make a
third phrase equipment investments by deploying advanced medical linear accelerator, CT simulator,
3-D Conformal Radio-therapy and planning system, hyperthermia system of endogenetic fields and
other sophisticated medical equipment, and proactively carry out clinical diagnosis, treatment,
research and teaching work and thereby constantly enhance medical service performance and develop
the Center into a top modernized medical treatment organization



Article 3 Business Scope. The Center will offer diagnosis, comprehensive therapies (radiotherapy,
thermal therapy, chemotherapy, etc), research, teaching and other medical services in respect of
tumors and related diseases.




Section IV Term of Cooperation



Article 4 The term of cooperation for the third phase equipment contributed shall be 10 years,
commencing from the date on which the treatment and operation formally begin upon approval by
relevant authorities.




Section V Contribution and Profit Allocation of the Parties




Article 5 Third Phrase Equipment Contribution and Profit Allocation



1. Party B will contribute the third phase equipment, i.e., four units of internationally advanced
equipment (being one medical linear accelerator, one CT simulator, one 3-D Conformal Radio-therapy
and planning system and one hyperthermia system of endogenetic fields), which together are valued
at RMB ***. Party A shall contribute the existing medical technical personnel and equipment and
installations of its radiotherapy department, and the medical treatment and office premises
required for the Center, as well as other supporting facilities (air conditioning, dehumidifiers,
and telephones).



2. Profit Allocation



All profits derived from the project of this phase shall, after deducting all costs, be allocated
according to the following percentages, on the basis of which the Parties shall also enjoy the
title to, bear the risk of, and have other rights to, the assets of the third phase of the Center:




	 	 	 	 	 	 	 
	 	 	 	Party A	 	Party B	 
	 	Year ***

	 	***
	 	***	 
	 	Year ***

	 	***
	 	***	 






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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED




Section VI Disposal of Assets

within and upon Expiry of the Term of Cooperation



Article 6 During the Term of Cooperation, any transfer by a Party of all or part of its interests
in the Center to a third party shall be subject to the approval of the other Party, which shall
have the preemptive right of purchase under equal conditions.



Article 7 During the Term of Cooperation, each Party shall own its own contributions and the assets
acquired in the name this current phase shall be owned by the Parties in accordance with the
percentages set out in Clause 2 of Article 5 hereof. Upon expiry of this Contract, if so proposed
by a Party and so unanimously approved by the board, the Term of Cooperation may be extended and
the relevant agreement shall be separately agreed upon by the Parties through discussions.




Section VII Responsibilities of the Parties




Article 8 The Parties shall each be responsible for carrying out the following:




Party A’s Responsibilities:





	 	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.





Party B’s Responsibilities:





	 	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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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED





	 	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.





Section VIII Board of Directors



Article 9 The duties and powers of the board of directors shall in principle be dealt with in
compliance with the original contract. The board of directors for this phrase shall be composed of
seven members, including four members appointed by Party A and three members appointed by Party B.
The board shall have one chairman, which shall be appointed by Party B and shall be vested with the
veto power. The vice chairman shall be appointed by Party A. The chairman and the directors shall
serve a term of four years and may be reelected if so recommended by their appointing party.




Section IX Management Body



Article 10 The management body for this phase shall implement the director accountability system
under the leadership of the board of directors. The management body will have one executive
director to be recommended by Party B and one business director to be recommended by Party A, both
of which shall be determined and engaged by the board upon consideration. The directors shall serve
a term of four years and may be reelected if they are found qualified after review and assessment.



Article 11 The executive director shall be responsible for implementing all resolutions of the
board of directors, shall be subject to the review by the board in terms of the annual operating
indicators and their operation and management work, shall organize and direct the daily business
management of the Center, and shall have responsibility over the administration and human
resources, accounting and marketing organization matters of the Center. The business director shall
be responsible for medical treatment technology and research work. The management body may have
divisional supervisors who shall be in charge of the work of relevant divisions, shall carry out
matters delegated by the directors and shall report to the directors.



Article 12 If either of the executive or business director abuses his/her office for personal gain
or is in gross breach of his/her duties, he/she may be removed at any time by the board of
directors under a board resolution.



Article 13 The Center will reasonably decide the headcount and staffing according to the needs of
the current phrase of business of the Center. The medical and technical staff will be recommended
by both Parties. The Center will adopt a system of all-personnel




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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED



employment and employees will be engaged upon satisfactory review and assessment by the board.




Section X Equipment Procurement



Article 14 Where the conditions are equal, the machinery and equipment and relevant components and
parts thereof, the vehicles and the office supplies required for the Center, shall be procured to
the extent possible from the domestic market.




Section XI Taxation and Accounting Matters



Article 15 The Center shall develop an accounting system in compliance with relevant laws,
regulations and rules of the state and Beijing Municipality. The financial management matters of
the Center shall be dealt with in accordance with such financial management system as approved by
the board of directors. To the extent of the staffing of accounting personnel, the accountant shall
be appointed by Party B and the cashier shall be appointed by Party A.



Article 16 The operating costs of the Center shall include the repair and maintenance expenses of
the Center (including expense for the repair and maintenance of the premises, equipment, and etc.),
staff bonus, water and power utility expenses, office expense, marketing and promotional expenses,
R&D costs, medical indemnity for which the Center is held liable, as well as other expenses
required to be paid by the Center.



Article 17 The Center shall conduct accounting and settlement on a monthly basis. All profits
derived by the Center, after deducting the operating costs of the Center, shall be allocated
between the Parties based on the profit sharing percentages stipulated in Article 7 herein.



Article 18 The Center shall be obligated to provide military personnel with charge-free medical
therapy in compliance with applicable policies of the state, provided that the monthly amount of
such medical therapy (in terms of amount of money) shall not exceed 10% of the total revenue
derived from the therapy of the Center.



Article 19 The Parties shall each be responsible for their own taxation matters in relation to the
Center under the cooperation.




Section XII Other Matters



Article 20 Any matter not addressed herein shall be implemented in line with the original contract.




Section XIII Effectiveness and Miscellaneous



Article 21 This Contract shall become effective immediately upon execution by the legal or
authorized representatives of the Parties.




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CONFIDENTIAL TREATMENT REQUESTED BY CONCORD MEDICAL SERVICES HOLDINGS LIMITED



Article 21 This Contract shall be made in six originals, with each Party holding three copies, each
of which shall have the same legal force and effect.




	 	 	 
	Party A: Chinese People’s 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 People’s 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






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