Document:

exv10w1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (the “Agreement”) is made effective as of January 3, 2011
(the “Effective Date”), by and between NuVasive, Inc. (the “Company”) and Alexis V. Lukianov (the
“Executive”).

     The parties agree as follows:

     1. Employment. The Company hereby continues to employ Executive, and Executive hereby
accepts such continued employment, upon the terms and conditions set forth herein.

     2. Duties.

          2.1 Position. Executive is employed as Chief Executive Officer of the Company and
shall have the duties and responsibilities assigned by the Board of Directors (the “Board of
Directors”). Executive shall perform faithfully and diligently all duties assigned to Executive.
Executive shall also continue to serve as the Chair of the Board of Directors.

          2.2 Best Efforts/Full-time. Executive will expend his best efforts on behalf of the
Company, and will abide by all policies and decisions made by the Company, as well as all
applicable federal, state and local laws, regulations or ordinances. Executive will act in the
best interest of the Company at all times. Executive shall devote his full business time and
efforts to the performance of Executive’s assigned duties for the Company, unless Executive
notifies the Board of Directors in advance of Executive’s intent to engage in other paid work and
receives the Board of Directors’ express written consent to do so. Prior to commencing service as
a

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member of any public board of directors, Executive shall provide notice of his intention to
accept such a position to the Nominating and Corporate Governance Committee of the Board of
Directors (which shall have the authority to approve or disapprove Executive’s service as an
outside board member). Notwithstanding the foregoing, Executive will be permitted to continue to
serve as an outside director on the board of directors for the entities for whom he is currently
serving as an outside director as of the Effective Date.

     3. Term.

          3.1 Initial Term. The employment relationship pursuant to this Agreement shall be for
an initial term commencing on the Effective Date set forth above and continuing for a period of
three (3) years following such date (the “Initial Term”), unless sooner terminated in accordance
with section 7 below.

          3.2 Renewal. On expiration of the Initial Term specified in subsection 3.1 above,
this Agreement will automatically renew for subsequent one (1) year terms unless either party
provides thirty (30) days’ advance written notice to the other that the Company/Executive does not
wish to renew the Agreement for a subsequent period of one (1) year. In the event either party
gives notice of nonrenewal pursuant to this subsection 3.2, this Agreement will expire at the end
of the current term. Notwithstanding the foregoing, the maximum number of renewals permitted under
this Agreement shall be ten (10), such that the maximum term shall be thirteen (13) years. Failure
to renew this Agreement following either the Initial Term or any subsequent term shall not give
rise to any severance benefits described in section 7.

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     4. Compensation.

          4.1 Base Salary. As compensation for Executive’s performance of Executive’s duties
hereunder, the Company shall pay to Executive an initial Base Salary of nine hundred thousand
dollars ($900,000) per year, payable in accordance with the normal payroll practices of the
Company, less required deductions for local, state, federal, and foreign withholding tax, social
security and all other employment taxes and payroll deductions. In the event Executive’s
employment under this Agreement is terminated by either party, for any reason, Executive will earn
the Base Salary prorated to the date of termination.

          4.2 Incentive Compensation. Executive will be eligible to earn incentive compensation
in accordance with the provisions of the Company’s performance bonus program as determined by the
Compensation Committee of the Board of Directors (the “Compensation Committee”) with a target bonus
equal to one hundred percent (100%) of Executive’s Base Salary (“Target Bonus”). No amount of the
incentive bonus shall be guaranteed and future increases in the target opportunity shall be at the
discretion of the Compensation Committee. The performance bonus, if any, that is payable to
Executive shall be paid in the calendar year following the calendar year in which it is earned, but
no later than March 15th of that year.

          4.3 Equity Compensation. With respect to the 2011 calendar year, subject to the
Compensation Committee’s approval, Executive will be granted a stock option to purchase three
hundred thousand (300,000) shares of the Company’s Common Stock at an exercise price equal to the
fair market value of that stock on the date of the grant (the “Option”), as well as thirty-three
thousand three hundred and thirty-three (33,333) restricted stock units (“RSUs”), each under the
Company’s 2004 Equity Incentive Plan of NuVasive, Inc. (the “2004 EIP”) and

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subject to the terms and conditions of the standard stock option or restricted stock unit
agreements provided pursuant to the 2004 EIP.

          4.4 Performance and Salary Review. The Compensation Committee will periodically
review Executive’s performance on no less than an annual basis. Adjustments to salary or other
compensation, if any, will be made by the Compensation Committee in its sole and absolute
discretion.

     5. Customary Employee Benefits. Executive will be eligible for all customary and
usual employee benefits generally available to executives of the Company including, without
limitation, the Company’s group medical, dental, disability, life insurance and flexible spending
arrangements, subject to the terms and conditions of the Company’s benefit plan documents. The
Company reserves the right to change or eliminate its employee benefits on a prospective basis, at
any time, effective upon notice to Executive.

     6. Business Expenses. Executive will be reimbursed for all reasonable, out-of-pocket
business expenses incurred in the performance of Executive’s duties on behalf of the Company. To
obtain reimbursement, expenses must be submitted promptly with appropriate supporting documentation
and will be reimbursed in accordance with the Company’s policies. Any reimbursement Executive is
entitled to receive shall (a) be paid no later than the last day of Executive’s tax year following
the tax year in which the expense was incurred, (b) not be affected by any other expenses that are
eligible for reimbursement in any tax year and (c) not be subject to liquidation or exchange for
another benefit.

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     7. Termination of Executive’s Employment.

          7.1 Termination for Cause by the Company. Although the Company anticipates a mutually
rewarding employment relationship with Executive, the Company may terminate Executive’s employment
immediately at any time for Cause. For purposes of this Agreement, “Cause” is defined as: (a)
Executive’s repeated failure to satisfactorily perform Executive’s job duties; (b) Executive’s
refusal or failure to follow lawful directions of the Board of Directors’; (c) Executive’s
conviction of a crime involving moral turpitude; or (d) Executive engaging or in any manner
participating in any activity which is directly competitive or injurious to the Company. In the
event Executive’s employment is terminated in accordance with this subsection 7.1, Executive shall
be entitled to receive only Executive’s Base Salary then in effect, prorated to the date of
termination and all benefits accrued through the date of termination (the “Accrued Benefits”). All
other Company obligations to Executive pursuant to this Agreement will become automatically
terminated and completely extinguished. Executive will not be entitled to receive any severance
benefits described in this section 7.

          7.2 Termination Without Cause by the Company/Severance. The Company may terminate
Executive’s employment under this Agreement without Cause at any time on thirty (30) days’ advance
written notice to Executive. In the event of such termination, Executive will receive Executive’s
Base Salary then in effect, prorated to the date of termination, and Accrued Benefits. Subject to
the provisions set forth in section 13 relating to compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), Executive will receive a “Severance Package” that
shall include (a) a “Severance Payment” equivalent to twenty-four (24) months of Executive’s Base
Salary in effect on the date of termination, plus two

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(2) times Executive’s Target Bonus, payable in a lump sum beginning on the first regular
payday occurring forty-five (45) days following the termination date; (b) payment by the Company of
the premiums required to continue Executive’s group health care coverage for a period of
twenty-four (24) months following Executive’s termination, provided Executive does not become
eligible for health coverage through another employer during this period; (c) in addition to the
Severance Payments, a pro-rated bonus for the year of termination based on actual performance
results versus the bonus plan goals (and based on the actual bonus funding under the bonus formula
in effect), which shall be payable in accordance with the normal pay period for such bonus (i.e.,
after the performance period is complete); and (d) all equity awards with only time-based vesting
shall vest to the extent the awards are scheduled to vest within twenty four (24) months of the
termination. Accelerated vesting, if any, applicable to equity awards with performance based
vesting shall be governed by the terms of the applicable equity award agreement.

     Notwithstanding the foregoing, if Executive’s employment is terminated by the Company
without Cause in connection with (or during the twenty-four (24) month period following) a Change
of Control (as defined below), then the Severance Package shall be calculated as set forth in (a)
and (b) above, and the bonus for the year of termination shall be based on the pro-rata Target
Bonus for the period of time worked. Accelerated vesting of equity awards, if any, relating to a
termination without Cause following (or in connection with) a Change of Control shall be governed
by subsection 7.6(a) below. The Severance Package, if any, payable following (or in connection
with) a Change of Control shall be paid in accordance with the same time periods provided above
(subject to the provisions of section 13), except that if the Change of Control also constitutes a
change in ownership or effective control of the

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Company or a change in the ownership of a substantial portion of the assets of the
Company within the meaning of Section 409A of the Code, then the portion of the Severance Package
consisting of the payment of Executive’s pro-rata Target Bonus shall be paid at the same time as
the Severance Payment.

          Executive will only receive a Severance Package if Executive: (i) complies with all surviving
provisions of this Agreement as specified in subsection 14.8 below; and (ii) executes a full
general release in a form acceptable to the Company, releasing all claims, known or unknown, that
Executive may have against the Company arising out of or any way related to Executive’s employment
or termination of employment with the Company, and such release has become effective in accordance
with its terms prior to the forty-fifth (45th) day following the termination date. Any Severance
Package shall also be subject to: (i) recoupment for a violation of Sections 9-11 of this
Agreement; and (ii) the terms of any Dodd-Frank compliant recoupment policy adopted by the Company.
Except as described above, all other Company obligations to Executive will be automatically
terminated and completely extinguished.

          7.3 Voluntary Resignation by Executive for Good Reason/Severance. Executive may
voluntarily resign Executive’s position with the Company for Good Reason, at any time on thirty
(30) days’ advance written notice. In the event of Executive’s resignation for Good Reason,
Executive will be entitled to receive Executive’s Base Salary then in effect, prorated to the date
of termination, Accrued Benefits, and the Severance Package described in subsection 7.2 above as if
Executive were terminated by the Company without cause; provided Executive complies with all of the
conditions in the last paragraph of subsection 7.2 above. All

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other Company obligations to Executive pursuant to this Agreement will become automatically
terminated and completely extinguished. Executive will be deemed to have resigned for Good
Reason if Executive voluntarily terminates Executive’s employment with the Company within sixty
(60) days after the occurrence of one or more of the following circumstances: (a) a material
reduction in Base Salary or Target Bonus (as a percentage of Base Salary), or a material reduction
in core benefits; (b) a material diminution of Executive’s overall duties, authority or scope of
responsibility (provided, however, that separation of the Chair of the Board of Directors from
Executive’s other duties shall not constitute “Good Reason” if it is legally required); or (c) the
Company relocates Executive’s principal place of work (the Company’s headquarters) by more than
thirty (30) miles, without Executive’s prior written approval; provided, however, that the Company
has been provided with written notice of the circumstance and twenty (20) days from receipt of
written notice in which to cure such circumstance.

          7.4 Termination Upon Death or Disability. In the event Executive’s employment is
terminated due to death or Disability, Executive, or Executive’s estate, as applicable, will be
entitled to receive Executive’s Base Salary then in effect, prorated to the date of termination,
Accrued Benefits, and the Severance Package described in subsection 7.2 above as if Executive were
terminated by the Company without cause; provided Executive complies with all of the conditions in
the last paragraph of subsection 7.2 above. However, if the Company maintains a term life
insurance that pays equivalent value as the cash compensation portion of the Severance Package in
7.2, then the Company shall not be liable for the cash portion of the payment upon the executives’
death. And, if the Company maintains disability insurance providing for a cash payment or cash
payment stream with equivalent present value as the cash portion of the Severance Package (using
reasonable risk free investment rate

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assumptions), then the Company’s obligation to pay the cash
severance package shall be satisfied. In the event that third-party insurance does not satisfy the cash compensation
obligations of the Severance Package, then the Company shall only be liable for the difference
between the gross insurance payment proceeds and the full amount of the cash portion of the
Severance Package. For this purpose, “Disability” means the Executive is unable to perform the
essential functions of his position by reason of any medically determinable physical or mental
condition which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months. The Board shall have the discretion to replace the
value of the benefits described in this Section 7.4 with an insurance policy that would pay
substantially equivalent sums in the event of Executive’s death or Disability.

          7.5 Voluntary Resignation by Executive Without Good Reason. Executive may voluntarily
resign Executive’s position with the Company without Good Reason, at any time on thirty (30) days’
advance written notice. In the event of Executive’s resignation without Good Reason, Executive
will be entitled to receive only Executive’s Base Salary and benefits for the thirty-day notice
period and no other amount. All other Company obligations to Executive pursuant to this Agreement
will become automatically terminated and completely extinguished. In addition, Executive will not
be entitled to receive any severance benefits described in this section 7.

          7.6 Change of Control Provisions.

               (a) Equity Awards. Following the consummation of a Change of Control (as that term is
defined below), all unvested equity awards with only time based vesting conditions shall become
fifty percent (50%) vested effective upon the consummation of the

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Change of Control. The remainder
of such equity awards shall vest in equal monthly installments over the twelve (12) month period following the consummation of the Change of
Control; provided that if a termination of employment occurs which gives rise to the payment of a
Severance Package, then such awards shall become fully vested. Accelerated vesting, if any,
applicable to equity awards with performance based vesting shall be governed by the terms of the
applicable equity award agreement.

               (b) Severance Package. If Executive’s employment is terminated (i) by the Company in
connection with or within twenty-four (24) months after a Change of Control, other than for Cause
(as defined in subsection 7.1 above); (ii) by the Executive for Good Reason (as defined in
subsection 7.3 above); or (iii) as a result of Executive’s death or Disability, Executive shall be
entitled to receive the Severance Package described in subsection 7.2 above, as modified by the
second paragraph of that subsection and subsection 7.6(a) above. To receive a Severance Package
under these circumstances, Executive must comply with all of the conditions in the last paragraph
of subsection 7.2 above. All other Company obligations to Executive pursuant to this Agreement
will become automatically terminated and completely extinguished.

               (c) Section 280G of the Code. In the event that any payment or benefit received or to
be received by Executive pursuant to this Agreement or otherwise (collectively, the “Payments”)
would result in a “parachute payment” as described in section 280G of the Code, notwithstanding the
other provisions of this Agreement, the amount of such Payments will not exceed the amount which
produces the greatest after-tax benefit to Executive. In the event that the Payments are to be
reduced, such reductions will first be made from cash

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payments in reverse chronological order and
then the cancellation of the acceleration of vesting on equity awards in reverse chronological order from the date the awards would have vested
under their original terms. The foregoing determination will be made by an accounting firm of
national standing reasonably selected by the Company, which shall provide detailed supporting
calculations to both the Company and Executive.

               (d) Change of Control. For purposes of this Agreement, a Change of Control is defined
as a “Fundamental Transaction” (as that term is defined in the 2004 EIP) as well as any of the
following occurrences:

                    (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”)), other than a trustee or other fiduciary holding securities of
the Company under an employee benefit plan of the Company, acquires securities holding thirty
percent (30%) or more of the total combined voting power or value of the Company; or

                    (ii) As a result of or in connection with a contested election of the Company’s members of its
Board of Directors, the persons who were the Company Directors immediately before the election
cease to constitute a majority of the Board of Directors.

     8. No Conflict of Interest. During the term of Executive’s employment with the
Company, Executive must not engage in any work, paid or unpaid, or other activities that create a
conflict of interest which materially and substantially disrupt the operations of the Company.
Such work and/or activities shall include, but is not limited to, directly or indirectly competing
with the Company in any way, or acting as an officer, director, employee, consultant,

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stockholder,
volunteer, lender, or agent of any business enterprise of the same nature as, or which is in direct competition with, the business in which the Company is now engaged or in
which the Company becomes engaged during the term of Executive’s employment with the Company.

     9. Confidentiality and Proprietary Rights. As a condition of continuing employment,
Executive agrees to continue to abide by the Company’s Proprietary Information and Inventions
Agreement executed by Executive on August 2, 1999, which is provided with this Agreement and
incorporated herein by reference.

     10. Non-Disparagement. Executive agrees that during the term of this Agreement and
for a period of two (2) years after termination of this Agreement, Executive will not make any
voluntary statements, written or oral, or cause or encourage others to make any such statements
that defame, disparage or in any way criticize the personal and/or business reputations, practices
or conduct of the Company.

     11. Nonsolicitation of the Company’s Employees. Executive agrees that during the term
of this Agreement and for a period of two (2) years after the termination of this Agreement, in
addition to the obligations imposed under the Proprietary Information and Inventions Agreement
described above, Executive will not, either directly or indirectly, separately or in association
with others, interfere with, impair, disrupt or damage the Company’s business by soliciting,
encouraging or recruiting any of the Company’s employees or causing others to solicit or encourage
any of the Company’s employees to discontinue their employment with the Company.

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     12. Injunctive Relief. Executive acknowledges that Executive’s breach of the
covenants contained in sections 8-11 would cause irreparable injury to the Company and agrees that
in the event of any such breach, the Company shall be entitled to seek temporary, preliminary and
permanent injunctive relief.

     13. Application of Section 409A.

          13.1 Notwithstanding anything set forth in this Agreement to the contrary, no amount payable
pursuant to this Agreement which constitutes a “deferral of compensation” within the meaning of
Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively, the
“Section 409A Regulations”) shall be paid unless and until Executive has incurred a “separation
from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that
Executive is a “specified employee” within the meaning of the Section 409A Regulations as of the
date of Executive’s separation from service, no amount that constitutes a deferral of compensation
which is payable on account of Executive’s separation from service shall be paid to Executive
before the date (the “Delayed Payment Date”) which is the first day of the seventh month after the
date of Executive’s separation from service or, if earlier, the date of Executive’s death following
such separation from service. All such amounts that would, but for this subsection 13.1, become
payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

          13.2 The Company intends that income provided to Executive pursuant to this Agreement will not
be subject to taxation under Section 409A of the Code. If an amount or benefit is payable under
this Agreement in lieu of a right to an amount or benefit under any arrangement, to the extent the
rights under such arrangement are subject to (and not exempt

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from) Section 409A of the Code, then the payments and benefits provided through this Agreement
shall be made at the same time and in the same form as under such arrangement to the extent
required to avoid a violation of Section 409A of the Code. The provisions of this Agreement shall
be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of
the Code. However, the Company does not guarantee any particular tax effect for income provided to
Executive pursuant to this Agreement. In any event, except for the Company’s responsibility to
withhold applicable income and employment taxes from compensation paid or provided to Executive,
the Company shall not be responsible for the payment of any applicable taxes on compensation paid
or provided to Executive pursuant to this Agreement.

          13.3 For purposes of Section 409A of the Code, the right to a series of installment
payments under this Agreement shall be treated as a right to a series of separate payments.

          13.4 Notwithstanding anything herein to the contrary, the reimbursement of expenses or
in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions:
(a) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not
affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (b)
the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to
Company’s applicable policies, but in no event later than the end of the year after the year in
which such expense was incurred; and (c) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit.

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     14. General Provisions.

          14.1 Successors and Assigns. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the
Company. Executive shall not be entitled to assign any of Executive’s rights or obligations under
this Agreement.

          14.2 Waiver. Either party’s failure to enforce any provision of this Agreement shall
not in any way be construed as a waiver of any such provision, or prevent that party thereafter
from enforcing each and every other provision of this Agreement.

          14.3 Attorneys’ Fees. Each side will bear its own attorneys’ fees in any dispute
unless a statutory section at issue, if any, authorizes the award of attorneys’ fees to the
prevailing party. Notwithstanding the foregoing, in the event of any dispute, the Company shall
pay Executive’s reasonable legal fees upfront with no recoupment if Executive prevails on at least
one (1) material claim or defense. If Executive does not prevail on at least one (1) material
claim or defense, the Company may recoup any fees paid by the Company on behalf of Executive.

          14.4 Severability. In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it being
intended that the parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator

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or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

          14.5 Interpretation; Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this Agreement. This Agreement has been
drafted by legal counsel representing the Company, but Executive has participated in the
negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an
opportunity to review and revise the Agreement and have it reviewed by legal counsel, if desired,
and, therefore, the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of this Agreement.

          14.6 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the United States and the State of California. Each party consents to the
jurisdiction and venue of the state or federal courts in San Diego, California, if applicable, in
any action, suit, or proceeding arising out of or relating to this Agreement.

          14.7 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery
when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by
telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or
(d) by certified or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to the addresses set forth below, or such other address as either party may
specify in writing.

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          14.8 Survival. Sections 8 (“No Conflict of Interest”), 9 (the “Confidentiality and
Proprietary Rights”), 10 (“Non-Disparagement”), 11 (“Nonsolicitation”), 12 (“Injunctive Relief”),
13 (“General Provisions”) and 14 (“Entire Agreement”) of this Agreement shall survive Executive’s
employment by the Company.

     15. Entire Agreement. This Agreement, including the Proprietary Information and
Inventors Agreement incorporated herein by reference and the 2004 EIP and related option documents
described in subsection 4.3 of this Agreement, constitutes the entire agreement between the parties
relating to this subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations, and agreements, whether written or oral. This agreement may be amended
or modified only with the written consent of Executive and the Board of Directors of the Company.
No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY
PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN
BELOW.

	 	 	 	 	 
	 	ALEXIS V. LUKIANOV

 	 
	Dated: 1/2/2011 	By:  	/s/ Alexis V. Lukianov
 	 
	 	 	 	 
	 	NUVASIVE, INC.

 	 
	Dated: 1/2/2011 	By:  	/s/ Eileen M. More
 	 
	 	 	Eileen M. More 	 
	 	 	Chairperson, Compensation Committee of

the Board of Directors of NuVasive, Inc. 	 
	 

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ENTRUSTED MANAGEMENT AGREEMENT

 

This ENTRUSTED MANAGEMENT AGREEMENT, dated as of December 31, 2010 (this “Agreement”), is entered into by and among Shanghai Technology Innovation Co., Ltd. (上海创新科技有限公司 in Chinese), a limited liability company incorporated and existing under the laws of the PRC with its registered address at Room 901, No. 510, Cao Yang Road, Shanghai, PRC (“Shanghai Chuangxin”), Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海复星医药(集团)股份有限公司), a stock company limited by shares listed on the Shanghai Stock Exchange and incorporated and existing under the laws of the PRC with its registered address at Floor 9, No. 510, Cao Yang Road, Shanghai, PRC (the “Shareholder”), and Chindex Export Limited, a company limited by shares incorporated in the British Virgin Islands (“Old BVI”).  The Shareholder, Shanghai Chuangxin and Old BVI are referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Shareholder is the direct legal and beneficial owner of the entire equity interest in Shanghai Chuangxin;

 

WHEREAS, the Shareholder and Old BVI have entered into a Share Transfer Agreement dated December 27, 2010, relating to the transfer of the shares of Shanghai Chuangxin to Old BVI (the “Chuangxin Share Transfer Agreement”) at the closing provided for therein (the “Chuangxin Closing”);

 

WHEREAS, Shareholder and Shanghai Chuangxin desire to entrust Old BVI to manage and operate Shanghai Chuangxin during the period from the date of this Agreement to the Chuangxin Closing;

 

WHEREAS, Chindex Medical Holdings (BVI) Limited, Ample Up Limited, Chindex Medical Limited and certain subsidiaries of Chindex Medical Limited, including Shanghai Chuangxin and its majority owned Subsidiaries, have entered into a Joint Venture Governance and Shareholders Agreement dated the date hereof (the “Shareholders Agreement”);

 

WHEREAS, Old BVI desires to accept such entrustment and to manage and operate Shanghai Chuangxin as provided herein;

 

WHEREAS, the Shareholder, Shanghai Chuangxin and Old BVI are entering into contemporaneously herewith a Shareholder’s Voting Proxy Agreement relating to the voting and the exercise of other rights with respect to the equity interests in Shanghai Chuangxin (the “Shareholder’s Voting Proxy Agreement”) to further protect certain rights of Old BVI under this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the Parties hereby agree as follows:

  

  

  

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01  Certain Defined Terms.

 

“Affiliate” means, with respect to any Person or group of Persons, a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person or group of Persons.

 

“Agreement” or “this Agreement” shall have the meaning set forth in the Preamble, and shall include any Exhibits or Schedules hereto and all amendments hereto made in accordance with the provisions hereof.

 

“Annual Adjustment” shall have the meaning set forth in Section 2.05.

 

“China” (sometimes also herein referred to as the “PRC”) means the People’s Republic of China, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

 

“Chindex” means Chindex International, Inc., a Delaware corporation.

 

“Chuangxin Closing” shall have the meaning set forth in the Recitals.

 

“Chuangxin Share Transfer Agreement” shall have the meaning set forth in the Recitals.

 

“Encumbrance” means any lien (statutory or other), claim, charge, security interest, mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale or other title retention agreement, preference, priority or other security agreement or preferential arrangement of any kind or nature and any easement, encroachment, covenant, restriction, right of way, defect in title or other encumbrance of any kind.

 

“Entrusted Account” shall have the meaning set forth in Section 2.03(b).

 

“Entrusted Period” shall have the meaning set forth in Section 2.02.

 

“Entrustment Agreements” means, collectively, this Agreement, the Shareholder’s Voting Proxy Agreement and any other agreement or document executed and delivered pursuant to this Agreement or the Shareholder’s Voting Proxy Agreement.

 

“Entrustment Management Fee” shall have the meaning set forth in Section 2.04.

 

“Governmental Authority”  means any supranational, national, federal, provincial, state, municipal, regional, county, local or foreign governmental or quasi-governmental or regulatory authority (including a national securities exchange or other self-regulatory body), agency, governmental department, court, commission, board, bureau or other similar entity, domestic or foreign or any arbitrator or arbitral body.

  

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“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority with competent jurisdiction.

 

“HKIAC” shall have the meaning set forth in Section 7.03(a).

 

“Indemnified Party” shall have the meaning set forth in Section 7.01(c).

 

“Indemnifying Party” shall have the meaning set forth in Section 7.01(c).

 

“knowledge” means, with respect to any Person, the actual knowledge after reasonable inquiry of the officers of such Person.

 

“Law” means any federal, national, supranational, state, provincial, municipal, county, local, foreign or similar statute, law, ordinance, regulation, rule, code, order, or rule of law (including common law) of any Governmental Authority, and any judicial or administrative interpretation thereof, including any Governmental Order.

 

“Loss” shall mean any and all actions, suits, claims, proceedings, losses, costs, damages, judgments, amounts paid in settlement and expenses (including attorneys’ fees and disbursements) actually suffered or incurred (net of any insurance recovery).

 

“Old BVI” shall have the meaning set forth in the Preamble.

 

“Party” and “Parties” shall have the meaning set forth in the Preamble.

 

“Payment Period” shall have the meaning set forth in Section 2.05.

 

“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.

 

“PRC” (sometimes also herein referred to as “China”) means the People’s Republic of China, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

 

“Quarterly Adjustment” shall have the meaning set forth in Section 2.05.

 

“Shanghai Chuangxin” shall have the meaning set forth in the Preamble.

 

“Share Pledge” shall have the meaning set forth in Section 2.07.

 

“Shareholder” shall have the meaning set forth in the Preamble.

 

“Shareholder’s Voting Proxy Agreement” shall have the meaning set forth in the Recitals.

  

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“Subsidiary” or “Subsidiaries” means, with respect to any Person, any Affiliate of such Person that is controlled by such Person.

 

“Tax” or “Taxes” means all taxes (whether federal, national, supranational, state, provincial, municipal, county, local or foreign), fees, levies, customs duties, assessments or charges of any kind whatsoever, including gross income, net income, gross receipts, profits, windfall profits, sales, use, occupation, value-added, advalorem, transfer, license, franchise, withholding, payroll, employment, excise, estimated, stamp, premium, capital stock, production, net worth, alternative or add-on minimum, environmental, business and occupation, disability, severance, or real or personal property taxes imposed by any taxing authority in the United States, the PRC or elsewhere together with any interest, penalties, or additions to tax imposed with respect thereto.

 

“UNCITRAL” shall have the meaning set forth in Section 7.03(a).

 

“UNCITRAL Rules” shall have the meaning set forth in Section 7.03(a).

 

Section 1.02 Interpretation and Rules of Construction.  In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

 

(a) when a reference is made in this Agreement to an Article, Preamble, Recital, Section, Exhibit or Schedule, such reference is to an Article, Preamble, Recital or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

 

(b) the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

 

(c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation;”

 

(d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

 

(e) the definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

 

(f) any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such Law or statute as from time to time amended, modified or supplemented, including by succession of comparable successor Laws;

 

(g) any contract or agreement defined or referred to herein or in any agreement or instrument that is referred to herein means such contract or agreement as from time to time amended, modified or supplemented, including any novation thereof;

 

(h) references to a Person are also to its successors and permitted assigns; and

  

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(i) the use of “or” is not intended to be exclusive unless expressly indicated otherwise.

 

ARTICLE II

 

ENTRUSTMENT

 

Section 2.01 Entrusted Management.

 

(a) The Shareholder and Shanghai Chuangxin shall, and do hereby, entrust the management and operation of Shanghai Chuangxin to Old BVI pursuant to the terms and conditions of this Agreement, including without limitation delivering to Old BVI all business materials together with all business licenses and corporate seal (chop) of Shanghai Chuangxin, including the right, power and authority to exercise all the right, power and authority of Shanghai Chuangxin as the shareholder of any of its Subsidiaries; and

 

(b) Old BVI shall manage and operate Shanghai Chuangxin in accordance with the terms and conditions of this Agreement.

 

Section 2.02 Term.  The term of this Agreement shall be from the date hereof to the earlier of the following (the “Entrusted Period”):

 

(a) the termination of this Agreement; or

 

(b) the Chuangxin Closing.

 

Section 2.03 Management and Operation.  During the Entrusted Period, Old BVI shall have full power and authority with respect to, and shall be fully responsible for, the management and operation of Shanghai Chuangxin, including without limitation the following:

 

(a) Subject to the terms and conditions of the Shareholders Agreement, Old BVI shall have full power and authority with respect to, and shall be fully responsible for, managing and operating Shanghai Chuangxin, including without limitation the (i) the sole and exclusive right, power and authority to convene shareholders’ meetings of Shanghai Chuangxin and sign resolutions relating to such meetings, (ii) the sole and exclusive right, power and authority to appoint, remove and terminate members of the board of directors and the general manager of Shanghai Chuangxin, (iii) the sole and exclusive right, power and authority to appoint, remove and terminate the supervisors (of the board of directors) of Shanghai Chuangxin and elect the chairman of the board of directors or other appropriate person as the authorized legal representative of Shanghai Chuangxin, (iv) the right, power and authority to hire and fire managerial and administrative personnel of Shanghai Chuangxin, subject to and consistent with the Shareholders Agreement, (v) the sole and exclusive right, power and authority to exercise all powers of the Shareholder with respect to its equity interest in Shanghai Chuangxin, including the sole and exclusive right, power and authority to vote, transfer, sell, pledge or otherwise encumber such equity interest (and retain any and all proceeds of any such transfer, sale, pledge or encumbrance) and to adopt (and direct the adoption of) shareholder resolutions and other actions of the shareholder of Shanghai Chuangxin, and (vi) the right, power and authority to exercise all powers of Shanghai Chuangxin with respect to its equity interests in Shanghai

  

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Chuangxin’s Subsidiaries, including the right, power and authority to (A) convene shareholders’ meetings of the Subsidiaries and sign resolutions relating to such meetings, (B) appoint, remove and terminate members of the board of directors, the general manager and any managing director of each Subsidiary, (C) appoint, remove and terminate the supervisors (of the board of directors) of each Subsidiary and elect the chairman of the board of directors or other appropriate person as the authorized legal representative of each Subsidiary, and (D) vote, transfer, sell, pledge or otherwise dispose of or encumber Shanghai Chuangxin’s equity interest in each Subsidiary and to adopt (and direct the adoption of) shareholder resolutions and other actions of the shareholder of each of such Subsidiaries.  Shanghai Chuangxin shall adopt such board of director’s resolutions as may be requested by Old BVI.

 

(b) Old BVI shall have the right to manage and control all assets of Shanghai Chuangxin, and, if requested by Old BVI, Shanghai Chuangxin shall open one or more entrusted accounts or designate one or more existing accounts as entrusted accounts (each an “Entrusted Account”).  If Old BVI requests such Entrusted Accounts, Shanghai Chuangxin shall keep all of its funds, including all revenues from operations and all dividends received, in the Entrusted Accounts and all payments of funds by Shanghai Chuangxin shall be disbursed through the Entrusted Accounts.  Old BVI shall have the full right to decide the use of the funds in the Entrusted Account.  The authorized signatories of each Entrusted Account shall be appointed or confirmed by Old BVI.

 

(c) Subject to the terms and conditions of the Shareholders Agreement, Old BVI shall have the full right, power and authority to control and administer the financial affairs and daily operation of Shanghai Chuangxin, including without limitation entering into and performance of contracts and payment of taxes.

 

Section 2.04 Assignment of Dividends.  Shareholder hereby assigns to Old BVI all of Shareholder’s right to receive dividends and other distributions and payments with respect to the equity interests and shares in Shanghai Chuangxin, and Shanghai Chuangxin hereby agrees to pay any and all such dividends, distributions and payments directly to Old BVI.  Shareholder agrees that in the event Shareholder receives any such dividend, distribution or payment, Shareholder shall promptly pay such amount to Old BVI.

 

Section 2.05 Entrustment Management Fee.  If requested by Old BVI, Shanghai Chuangxin shall pay to Old BVI during the term of this Agreement an entrusted management fee (the “Entrustment Management Fee”) in such amount as may be specified by Old BVI, up to the full earnings before tax of Shanghai Chuangxin and its consolidated Subsidiaries.   If requested by Old BVI, the Entrustment Management Fee shall be paid quarterly (each such quarter being a “Payment Period”), as follows.

 

(a) Shanghai Chuangxin shall pay to Old BVI as the Entrustment Management Fee for each Payment Period an amount specified by Old BVI that is up to the consolidated earnings before tax (revenues after deduction of operating costs, expenses and taxes other than income tax) of Shanghai Chuangxin and its consolidated subsidiaries.

 

(b) If the earnings before tax  is zero in any Payment Period, the Entrustment Management Fee for such Payment Period shall be zero.  If such earnings before tax are less than

  

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zero (i.e., if Chuangxin and its consolidated Subsidiaries sustain a loss), all such loss shall be carried over to the subsequent Payment Period and deducted from the earnings before tax for such subsequent Payment Period for purposes of computing such subsequent Payment Period’s Entrustment Management Fee.

 

(c) The Parties shall calculate, and Chuangxin shall pay, the Entrustment Management Fee for each Payment Period within twenty (20) days after the end of such Payment Period.

 

(d) If such Entrustment Management Fee is based on the earnings before tax of Chuangxin and its consolidated subsidiaries, each of such payments by Chuangxin shall be based on the estimated amount of such earnings before tax of Chuangxin and its consolidated Subsidiaries, except that if such Entrustment Management Fee is to be equal to the earnings before tax of Chuangxin and its consolidated subsidiaries then (i) the aggregate amount of such payments for each Payment Period shall be adjusted after the end of each Payment Period, but before the filing of tax returns for such Payment Period (the “Quarterly Adjustment”), so as to make the after-tax profit of Chuangxin and its consolidated Subsidiaries zero for that Payment Period and (ii) such payments shall be adjusted after the end of each fiscal year, but before the filing of the yearly tax returns (the “Annual Adjustment”), so as to make the after-tax profit of Chuangxin and its consolidated Subsidiaries zero for that fiscal year.

 

Section 2.06 Operating Risks and Losses; Funding; Liability.  The Parties acknowledge and agree that if during the Entrusted Period, Shanghai Chuangxin suffers losses or requires additional capital or other funding, Shareholder shall not have any obligation to fund such loss or to provide any additional capital or other funding.  To the extent that any such additional capital or other funding is to be provided, Shanghai Chuangxin shall look solely to Old BVI for such additional capital or funding.  Old BVI shall not have any liability to the Shareholder or Shanghai Chuangxin for the exercise by Old BVI of its rights, powers and authority hereunder, and nothing in this Agreement shall make Old BVI liable or responsible for any debts, liabilities or obligations of Shanghai Chuangxin or any of its Subsidiaries or impose on Old BVI any obligation to fund any capital requirements of, or otherwise provide any funding to, Shanghai Chuangxin or any of its Subsidiaries.  As provided in this Agreement, Old BVI shall be entitled to enjoy the profits and as a matter of financial reporting shall bear the losses arising from the management and operation of Shanghai Chuangxin and its Subsidiaries during the Entrusted Period.

 

Section 2.07 Share Pledge.  If the Chuangxin Closing does not occur by December 31, 2011, if requested by Old BVI, Shareholder shall grant to Old BVI a share pledge (the “Share Pledge”) in form and substance satisfactory to Old BVI with respect to the equity interests and shares in Shanghai Chuangxin and Shanghai Chuangxin’s Subsidiaries and shall cooperate and take all such actions as may be requested by Old BVI to register such Share Pledge.

  

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ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER

 

The Shareholder represents and warrants to Old BVI as of the date hereof and as of the Shanghai Chuangxin Closing as follows; provided that each representation or warranty deemed to be made as of a specific date (e.g., as of the date hereof or as the Shanghai Chuangxin Closing) shall be deemed to be made by reference to the facts and circumstances existing as at such date:

 

Section 3.01 Organization; Good Standing; Qualification.  Each of the Shareholder and Shanghai Chuangxin is duly organized, validly existing and in good standing under the Laws of China and has the requisite corporate (or other) power and authority to enter into this Agreement and each of the other Entrustment Agreements to which it is a party, to carry out its obligations hereunder and thereunder.

 

Section 3.02 Authorization; Execution; Enforceability.  The execution and delivery of this Agreement and the other Entrustment Agreements to which the Shareholder or Shanghai Chuangxin is a party, the performance by the Shareholder and Shanghai Chuangxin of their respective obligations hereunder and thereunder, and the consummation by the Shareholder and Shanghai Chuangxin of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Shareholder and Shanghai Chuangxin and their shareholders or equity owners.  This Agreement and the other Entrustment Agreements have been duly executed and delivered by the Shareholder and Shanghai Chuangxin, and this Agreement and the other Entrustment Agreements constitute the legal, valid and binding obligations of the Shareholder and Shanghai Chuangxin, enforceable against the Shareholder and Shanghai Chuangxin in accordance with their respective terms, in each case, except as enforcement may be limited by general principles of equity whether applied in a court of Law or a court of equity, and by applicable bankruptcy, insolvency and similar Law affecting creditors’ rights and remedies generally.

 

Section 3.03 Title to the Equity Interest in Shanghai Chuangxin.

 

(a) The Shareholder is the direct legal and beneficial owner of the entire equity interest in Shanghai Chuangxin free and clear of any and all Encumbrances, other than the rights of Old BVI under the Chuangxin Share Transfer Agreement.

 

(b) There is no direct or indirect ownership or equity participation by any PRC Governmental Authority in the Shareholder or Shanghai Chuangxin.

 

(c) There is no security, option, warrant, right, call, subscription, agreement, proxy, entrustment or similar arrangement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, redemption, sale, pledge or other disposition of any equity interest in Shanghai Chuangxin or any securities convertible into, or other rights to acquire, any equity interest in Shanghai Chuangxin, (ii) obligates the Shareholder or Shanghai Chuangxin to grant, offer or enter into any of the foregoing or (iii) relates to the voting or control of such equity interest, securities or rights and

  

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none of such equity interests is subject to any restriction on transfer thereof except for restrictions under applicable Law.  Neither the Shareholder nor Shanghai Chuangxin has created any “phantom stock,” stock appreciation rights or other similar rights, the value of which is related to or based upon the price or value of any equity interest in Shanghai Chuangxin.  Neither the Shareholder nor Shanghai Chuangxin has outstanding debt or debt instruments providing voting rights with respect to Shanghai Chuangxin to the holders thereof.

 

Section 3.04 Voting and Other Agreements.  Neither the Shareholder nor Shanghai Chuangxin is a party to any agreement, written or oral, and there is no agreement, written or oral, with any Person that requires (w) the voting or giving of written consents or consenting to written resolutions with respect to any security or equity interest or voting right in Shanghai Chuangxin (including without limitation any voting agreements, voting trust agreements, shareholder or similar agreements) or the voting by a director of Shanghai Chuangxin, (x) the sale, transfer or other disposition with respect to any security or equity interest or voting right in Shanghai Chuangxin, (y) any restrictions with respect to the ability of Shanghai Chuangxin to pay dividends out of profits or make any other similar distributions of profits to any current or future holder of any equity interest therein or to pay the Entrustment Management Fee hereunder or (z) any restrictions with respect to the consummation of the transactions contemplated hereby.

 

Section 3.05 No Conflict; Governmental and Other Consents.

 

(a) The execution, delivery and performance by the Shareholder and Shanghai Chuangxin of this Agreement and the other Entrustment Agreements to which either of them is a party do not and will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under any loan, guarantee of indebtedness or credit agreement, note, bond, deed of trust, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Shareholder or Shanghai Chuangxin, (ii) result in the violation of any Law, or (iii) conflict with or result in any violation of any provision of the memorandum and articles of association of the Shareholder or Shanghai Chuangxin.

 

(b) Neither the Shareholder nor Shanghai Chuangxin nor any Affiliate of the Shareholder is required to obtain any consent, approval, or act of, or waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person pursuant to any Law or requirement in effect on the date hereof in connection with the execution, delivery and performance by the Shareholder and Shanghai Chuangxin of this Agreement or any of the other Entrustment Agreements (it being understood that this representation as to consents, approvals, waivers, authorizations and orders of Governmental Authorities outside of Hong Kong and China is to the knowledge of the Shareholder and Shanghai Chuangxin).

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF OLD BVI

 

Old BVI represents and warrants to the Shareholder as of the date hereof and as of the Shanghai Chuangxin Closing as follows; provided that each representation or warranty deemed to be made as of a specific date (e.g., as of the date hereof or as of the Shanghai Chuangxin

  

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Closing) shall be deemed to be made by reference to the facts and circumstances existing as at such date:

 

Section 4.01 Organization; Good Standing; Qualification.  Old BVI is a company limited by shares  duly incorporated, validly existing and in good standing under the laws of the British Virgin Islands China.  Old BVI has all necessary power and authority to enter into this Agreement and each of the Entrustment Agreements to which it is a party and to carry out its obligations hereunder and thereunder.

 

Section 4.02 Authorization; Execution; Enforceability.  The execution and delivery of this Agreement and the other Entrustment Agreements to which Old BVI is a party, the performance by Old BVI of its obligations hereunder and thereunder, and the consummation by Old BVI of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Old BVI and its shareholders.  This Agreement and the other Entrustment Agreements to which Old BVI is a party have been duly executed and delivered by Old BVI.  This Agreement the other Entrustment Agreements constitute, the legal, valid and binding obligations of Old BVI, enforceable against Old BVI in accordance with their respective terms, except as enforcement may be limited by general principles of equity whether applied in a court of Law or a court of equity, and by applicable bankruptcy, insolvency and similar Law affecting creditors’ rights and remedies generally.

 

Section 4.03 No Conflict; Governmental and Other Consents.

 

(a) The execution, delivery and performance by Old BVI of this Agreement and the other Entrustment Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under any loan, guarantee of indebtedness or credit agreement, note, bond, deed of trust, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon Old BVI or any of its Affiliates or result in the creation of any liens upon any of the properties or assets of Old BVI, (ii) result in the violation of any applicable Law, (iii) conflict with or result in any violation of any provision of the articles of association of Old BVI.

 

(b) Neither Old BVI nor any of its Affiliates is required to obtain any consent, approval, or act of, or waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person pursuant to any Law or requirement in effect on the date hereof in connection with the execution, delivery and performance by Old BVI of this Agreement or any of the other Entrustment Agreements (it being understood that this representation as to consents, approvals, waivers, authorizations and orders of Governmental Authorities outside of the United States, Hong Kong and China is to the knowledge of Chindex).

  

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ARTICLE V

 

OTHER AGREEMENTS AND COVENANTS

 

Section 5.01 Non-Interference.  During the Entrusted Period, the Shareholder shall not without the prior written consent of Old BVI:

 

(a) make any decisions regarding the management and operation of Shanghai Chuangxin;

 

(b) intervene in or in any way interfere with or obstruct Old BVI’s management and operation of Shanghai Chuangxin, whether by making use of its power as a shareholder of Shanghai Chuangxin or otherwise;

 

(c) entrust or grant any shareholder’s rights in or other rights of control with respect to Shanghai Chuangxin to a third party other than Old BVI;

 

(d) otherwise entrust any other third party other than Old BVI to manage and operate or otherwise control Shanghai Chuangxin;

 

(e) sell, assign, mortgage or otherwise dispose of, or create any Encumbrance on, any equity interest in Shanghai Chuangxin or on the assets, liabilities, operations, shareholders’ equity or other legal rights with respect to revenues of Shanghai Chuangxin;

 

(f) enter into any transaction which may materially affect the assets, liabilities, operations, shareholders’ equity or other legal rights of Shanghai Chuangxin;

 

(g) cause or permit Shanghai Chuangxin to distribute any dividend in any manner;

 

(h) cause or permit Shanghai Chuangxin to supplement, alter or amend its articles of association in any manner;

 

(i) (1) issue, grant or sell (or cause or permit Shanghai Chuangxin to issue, grant or sell) any equity interest in Shanghai Chuangxin or (2) issue, grant or sell (or cause or permit Shanghai Chuangxin to issued, grant or sell) any security, option, warrant, call, subscription or other right of any kind, fixed or contingent, that directly or indirectly calls for the issuance, sale, pledge or other disposition of any equity interest in Shanghai Chuangxin or (3) make (or cause or permit Shanghai Chuangxin to make) any other changes in its equity capital structure;

 

ARTICLE VI

 

TERMINATION

 

Section 6.01 Termination.  This Agreement (i) may be terminated by the mutual agreement of the Parties at any time prior to the Chuangxin Closing and (ii) shall immediately and automatically terminate upon the occurrence of the Chuangxin Closing.

  

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Section 6.02 Effect of Termination.  Unless agreed otherwise, in the event of termination of this Agreement as provided herein, this Agreement shall forthwith become void and no Party shall be obliged to continue to perform this Agreement; provided, however, that (i) nothing herein shall relieve either Party from liability for any breach of this Agreement that occurred before such termination and (ii) the terms of Article VII and Article VIII shall survive any such termination.

 

ARTICLE VII

 

REMEDIES; INDEMNIFICATION; LIMITATION OF LIABILITY; DISPUTE

RESOLUTION; ARBITRATION

 

Section 7.01 Indemnification.

 

(a) The Shareholder agrees to indemnify and hold harmless Old BVI, each Person who controls Old BVI, and each of the respective officers, directors, employees, agents and Affiliates of the foregoing in their respective capacities as such, to the fullest extent lawful, from and against any and all Losses arising out of or resulting from any inaccuracy in or breach of the representations, warranties or covenants made by Shareholder in this Agreement, any of the other Entrustment Agreements or any instrument or document delivered by Shareholder pursuant to this Agreement or any other Entrustment Agreement.

 

(b) Old BVI agrees to indemnify and hold harmless Shareholder, its Affiliates and each of their respective officers, directors, employees and agents in their respective capacities as such, to the fullest extent lawful, from and against any Loss arising out of or resulting from any inaccuracy in or breach of the representations, warranties or covenants made by Old BVI in this Agreement, any of the other Entrustment Agreements or any instrument or document delivered by Old BVI pursuant to this Agreement or any other Entrustment Agreement.

 

(c) Subject to Section 7.01(d), a Party obligated to provide indemnification under this Section 7.01 (an “Indemnifying Party”) shall reimburse the indemnified parties of the applicable other Party (each an “Indemnified Party”) for all reasonable out-of-pocket expenses (including attorneys’ fees and disbursements) as they are incurred in connection with investigating, preparing to defend or defending any such action, suit, claim or proceeding (including any inquiry or investigation) whether or not an Indemnified Party is a party thereto.  It is understood and agreed that the Indemnifying Party shall not, in connection with any action, suit, claim or proceeding or related action, suit, claim or proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties.

 

(d) An Indemnified Party shall give written notice to the Indemnifying Party of any claim with respect to which it seeks indemnification promptly after the discovery by such party of any matters giving rise to a claim for indemnification; provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7.01 unless and to the extent that the Indemnifying Party shall have been materially prejudiced by the failure of such Indemnified Party to so notify such

  

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Indemnifying Party.  In case any such action, suit, claim or proceeding is brought against an Indemnified Party by an unrelated third party, the Indemnified Party shall be entitled to hire, at its own expense, separate counsel and participate in the defense thereof; provided, however, that the Indemnifying Party shall be entitled to assume and conduct the defense, unless the Indemnifying Party determines otherwise and following such determination the Indemnified Party assumes responsibility for conducting the defense (in which case the Indemnifying Party shall be liable for any legal or other expenses reasonably incurred by the Indemnified Party in connection with assuming and conducting the defense, it being understood and agreed that the Indemnifying Party shall not, in connection with any action, suit, claim or proceeding or related action, suit, claim or proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties).  If the Indemnifying Party assumes and conducts the defense as provided in the previous sentence, the Indemnifying Party will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation.  No Indemnifying Party shall be liable for any settlement of any action, suit, claim or proceeding effected without its written consent; provided, however, the Indemnifying Party shall not unreasonably withhold, delay or condition its consent.  The Indemnifying Party further agrees that it will not, without the Indemnified Party’s prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Party is an actual or potential party to such action, suit, claim or proceeding) unless such settlement or compromise includes an unconditional release of each Indemnified Party from all liability arising out of such action, suit, claim or proceeding.

 

(e) The obligations of the Indemnifying Party under this Section 7.01 shall survive the closing or termination of this Agreement and the transactions contemplated hereby.  The agreements contained in this Section 7.01 shall be in addition to any other rights of the Indemnified Party against the Indemnifying Party or others, at common law or otherwise.

 

(f) The amount the Indemnifying Party shall pay to the Indemnified Party with respect to a claim made pursuant to this Section 7.01 shall be an amount equal to the Loss incurred by the Indemnified Party with respect to such claim; provided that the amount of any Losses incurred by the Indemnified Party shall be reduced by the amount of any insurance benefit received by the Indemnified Party in respect of such Losses, and provided, further, that any liability for indemnification under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement.

 

Section 7.02 Dispute Resolution.  Subject to Sections 7.04 and 7.05, in the event any dispute, controversy or claim arises out of or relating to any provision of this Agreement or the other Entrustment Agreements or the transactions contemplated hereby, any Party may notify the applicable other Party or Parties in writing that a dispute, controversy or claim exists and that it is prepared to negotiate a resolution of such dispute, controversy or claim.  In the event a Party delivers such notice the applicable Parties shall first attempt to resolve the dispute, controversy or claim by good faith negotiation.  In the event that the Parties are unable to resolve such dispute, controversy or claim within sixty (60) days after the delivery of such notice, any Party

  

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may submit any such dispute, controversy or claim (including the obligation to arbitrate disputes), for final resolution by arbitration pursuant to Section 7.03 below.

 

Section 7.03 Arbitration.

 

(a) Subject to Sections 7.02, 7.04 and 7.05, any dispute, controversy or claim arising out of or related to this Agreement or any instrument or document delivered pursuant to this Agreement or the other Entrustment Agreements or the transactions contemplated hereby or thereby (including the obligation to arbitrate disputes), shall be resolved by arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL”) as modified by this Section 7.03, which rules in force at the time of arbitration (the “UNCITRAL Rules”) are deemed to be incorporated into this Section.  The Hong Kong International Arbitration Centre (“HKIAC”) shall be the appointing authority under the UNCITRAL Rules, and the HKIAC schedule of fees and costs shall apply.

 

(b) The seat or legal place of arbitration shall be Hong Kong; provided, that the arbitrators may at their discretion hold hearings in mainland China or such other locations as they may deem appropriate.  Such arbitration shall be conducted in the English language (or if the Parties agree, both English and Chinese).  Unless the Parties otherwise agree, all documents shall be translated into English at the expense of the Party presenting the documents.  Neither Party shall be required to give general discovery of documents but may be required to produce specific, identified documents that are relevant to the dispute.

 

(c) The arbitral tribunal shall be composed of three impartial and independent arbitrators who are not citizens or residents of the PRC or the United States, one selected by the claimant(s) and one selected by the respondent(s) and the third selected by the other two arbitrators, or, if the other two arbitrators are unable to agree, by HKIAC, with such third arbitrator being the presiding arbitrator.  The arbitral tribunal may, in addition to any other powers conferred by the UNCITRAL Rules: (i) enjoin a Party from performing any act prohibited, or compel a Party to perform any act required, by the terms of this Agreement; (ii) where, and only where, a violation of this Agreement has been found, shorten or lengthen any time period established by this Agreement; and (iii) order such other legal or equitable relief as the arbitral tribunal deems appropriate.  The arbitral tribunal shall not be empowered to award, and the Parties to this Agreement hereby waive the right to claim, consequential or punitive damages.  The arbitrators shall render findings of fact and conclusions of law and a written award setting forth the basis and reasons for any decision rendered.

 

(d) The decision of the arbitral tribunal shall be final and binding on the Parties to such arbitration and their Affiliates and may not be appealed.  Judgment upon any award of the arbitral tribunal may be entered in any court of competent jurisdiction.  In connection with any arbitration hereunder or the enforcement of any award rendered pursuant thereto, the Parties hereby waive all defenses based on the general invalidity or unenforceability of this Agreement or this Article VII.

 

(e) The arbitration proceeding shall be confidential and the arbitral tribunal may issue appropriate protective orders to safeguard the Parties’ confidential information.  Except as required by Law, no Party shall make (or instruct any arbitrator to make) any public

  

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announcement with respect to the proceedings or decision of the arbitral tribunal without the prior written consent of the other Parties.  The existence of any dispute submitted to arbitration, any evidence submitted, and the award of the arbitral tribunal, shall be kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by applicable Law.

 

Section 7.04 Third Party Action.  If a third party initiates a claim of any nature in any court against any of the Parties arising out of or relating to any provision of this Agreement or any of the other Entrustment Agreements, the Parties agree that, as to such claim, the Party so named in such court proceeding may implead or otherwise join any of the remaining Parties in that proceeding, and that the existence of Sections 7.02 and 7.03 hereof (and the remedies prescribed thereunder) shall not act as a defense or bar to such impleader or joinder.

 

Section 7.05 Remedies.  Except as set forth in this Article VII, all rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

Section 7.06 No Consequential or Punitive Damages.  Except for any remedy relating directly or indirectly to the inability of Old BVI to benefit from the profits of Shanghai Chuangxin and to consolidate the assets and results of operations of Shanghai Chuangxin and its Subsidiaries in the consolidated financial statements of Old BVI as a result of any breach of this Agreement by the Shareholder, no Party shall seek or be entitled to receive any consequential damages, including without limitation loss of revenue or income, cost of capital, or loss of business reputation or opportunity, relating to any misrepresentation or breach of any warranty or covenant set forth in this Agreement; nor shall any Party seek or be entitled to receive punitive damages as to any matter under, relating to or arising out of the transactions contemplated by this Agreement.

 

ARTICLE VIII

 

GENERAL PROVISIONS

 

Section 8.01 Survival of Representations and Warranties.  The representations and warranties of the Parties contained herein shall survive the Entrusted Period for a period of twenty-four (24) months following the Chuangxin Closing; provided, however, that (i)  the representations and warranties made by the Shareholder in Sections 3.01, 3.02, 3.03 and 3.04 and (ii) the representations and warranties made by Old BVI in Sections 4.01 and 4.02 shall survive indefinitely.

 

Section 8.02 Liability for Breach of Agreement.  Any failure to perform the obligations required herein, in whole or in part, constitutes breach of contract and the breaching Party shall compensate the non-breaching Party for the loss incurred as a result of such breach.

 

Section 8.03 Further Assurances.  Each of the Parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry

  

15

  

out or to perform the provisions, or give effect to the purposes and intends, of this Agreement, including the ability of Old BVI to consolidate the results of operations of Shanghai Chuangxin into the financial statements of Old BVI.

 

Section 8.04 Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto.  Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an enforceable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

Section 8.05 Entire Agreement.  This Agreement (including the exhibits and schedules hereto) and the other Entrustment Agreements constitute the entire agreement of the Parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, among Shanghai Chuangxin, the Shareholder and Old BVI with respect to the subject matter hereof and thereof.

 

Section 8.06 Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, or by facsimile to the respective Parties hereto at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 8.06):

 

If to the Shareholder:

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

No. 2 East Fuxing Road

Shanghai 200010,

P.R. China

Attention:  Ding Xiaojun

Facsimile:  (86) 021-63325080

 

If to Old BVI:

Chindex International, Inc.

4340 East West Highway

Bethesda, MD 20814

Attention: Chief Executive Officer

and Corporate Secretary

  

16

  

 

If to Shanghai Chuangxin:

To the registered office of Shanghai Chuangxin

With copies to:

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

No. 2 East Fuxing Road

Shanghai 200010,

P.R. China

Attention:  Ding Xiaojun

Facsimile:  (86) 021-63325080

and

Chindex International, Inc.

4340 East West Highway

Bethesda, MD 20814

Attention: Chief Executive Officer

and Corporate Secretary

 

Section 8.07 Assignment; Binding Effect.  This Agreement may not be assigned without the express written consent of the other Parties (not to be unreasonably withheld, delayed or conditioned); and any such assignment or attempted assignment without such consent or compliance shall be void.  In the event of any permitted assignment by a Party, the assignee shall agree as a condition to the effectiveness of such assignment in a written agreement in form and substance satisfactory to the other Party (an executed copy of which shall be delivered to such other Party) to assume and agree to be bound by the obligations of such Party set forth in this Agreement.  No assignment by any Party shall relieve such Party from any of its obligations hereunder.

 

Section 8.08 Amendment.  This Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, each of the Parties.

 

Section 8.09 Waiver.  Any Party may (i) extend the time for the performance of any of the obligations or other acts of any other Party, (ii) waive any inaccuracies in the representations and warranties of any other Party contained herein or in any document delivered by any other Party pursuant hereto, or (iii) waive compliance with any of the agreements of any other Party or conditions to such Party’s obligations contained herein.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party that is giving the waiver.  Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement.  The failure of any Party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

  

17

  

 

Section 8.10 No Third-Party Beneficiaries.  This Agreement shall be binding upon and inure solely to the benefit of the Parties hereto and their respective successors and permitted assigns and, except for Article VII, nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

 

Section 8.11 Governing Law; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York applicable to contracts executed in and to be performed in that State, without regard to the principles of conflict of Laws of the State of New York or any other jurisdiction.

 

(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 8.12 Taxes.  Any and all Taxes arising from execution and performance of this Agreement and during the course of the entrusted management and operation of Shanghai Chuangxin shall be borne by the Parties respectively pursuant to applicable Law.

 

Section 8.13 Counterparts.  This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“.pdf”)) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

 

Section 8.14 Absence of Presumption.  With regard to each and every term and condition of this Agreement and any and all agreements and instruments subject to the terms hereof, the Parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and if at any time the Parties hereto (or any court or arbitral tribunal) desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration will be given to the issue of which Party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.

 

[Signature page follows]

  

18

  

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

 

	 	

SHANGHAI FOSUN

PHARMACEUTICAL (GROUP) CO.,

LTD.

(上海复星医药(集团)股份有限公司in

Chinese)

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Chen Qiyu 	 
	 	 	Name: Chen Qiyu	 
	 	 	Title:   Chairman of the Board	 
	(Chop)	 	 	 

 

	 	
SHANGHAI TECHNOLOGY

INNOVATION CO., LTD.

(上海创新科技有限公司 in Chinese)

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Ding Xiaojun 	 
	 	 	Name: Ding Xiaojun	 
	 	 	Title:   Legal Representative	 
	(Chop)	 	 	 

 

 

	 	CHINDEX EXPORT LIMITED	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Lawrence Pemble 	 
	 	 	Name: Lawrence Pemble	 
	 	 	Title:   Director	 
	 	 	 	 

 

[Entrusted Management Agreement Signature Page]

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