Exclusive Management Consultancy Agreement June 14, 2010 Guangzhou, P.R.C.
Exhibit
10.9
June
14, 2010
Guangzhou,
P.R.C.
This
Exclusive Management Consultancy Agreement (the “Agreement”) is entered into on
06/14/2010 in Guangzhou, the People’s Republic of China (the “PRC”) by and
between:
Party A: Xxxxxxxx Xx, a male
citizen of PRC with ID Card number 420601196208133553, whose domicile is located
at Xx. 00, Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxxx, XxxxxXxxx, PRC, currently
owns 100% shares of Guangzhou Dongfang Hospital Co., Ltd.,
Party B: Guangzhou
Dongfang Hospital Co., Ltd., an enterprise incorporated in and existing under
the PRC laws, the registration number of its Business License is 44011100013535,
and its registered address is Xx.0, Xxxxx Xxxxx Xxxx, Xxxxxxx Xxxxxx,
XxxxxXxxx.
Party C: Guangzhou
Shouzhi Medical Institution Management Co. Ltd., a wholly-foreign
owned enterprise registered in Guangzhou, PRC, the registration number of its
Business License is 440101400021828 , and its registered address is 0xx Xxxxx,
Xx.0, Xxxxx Xxxxx Xxxx, Shijing Street, GuangZhou.
In this
Agreement, Party A, Party B and Party C are collectively referred to as the
“Parties” and each as the “Party”.
WHEREAS:
1. Party A
is the sole shareholder of Party B and legally holds all of the equity interests
of Party B；
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2 Party
B is a for-profit hospital incorporated in and validly existing under the PRC
laws, and mainly engages in providing medical services to patients and selling
medicines.
3.
Party C, a wholly-foreign owned enterprise incorporated in and existing under
the PRC laws, has been formed and organized to exclusively manage and operate
Party B.
4.
Party A and Party B agree to engage Party C as the exclusive management
consultant of Party B;
5.
Party C agrees to accept such engagement and to work as its exclusive management
consultant.
Therefore,
in accordance with laws and regulations of the PRC, based on the principle of
equality and mutual benefit, it is hereby agreed as follows.
Article
1 Exclusive Management Consultant
As of the
date of the Agreement, Party A and Party B irrevocably agree to engage Party C
as the exclusive management consultant to Party B pursuant to the terms and
conditions of this Agreement. Party C agrees to accept the engagement of Party A
and Party B, and to manage and operate Party B as an exclusive management
consultant in accordance with the terms and conditions of this
Agreement. Party A and Party B acknowledge and agree that nothing in
this Agreement shall prohibit or limit Party C from providing management
consulting services to other hospitals, including hospitals that may compete
with Party B.
Article
2 Representations and Warranties
2.1 The
Parties hereby make the following representations and warranties to each other
as of the date of this Agreement as follows:
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2.1.1 has
the power and legal capacity to enter into this Agreement and perform and
observe its obligations hereunder;
2.1.2 has
fulfilled necessary internal decision making procedures and appropriate
authorities, and has got all necessary consents and approvals required from any
necessary third parties and governmental authorities for executing and
performing this Agreement, and does not violate any binding or influential PRC
laws and other relevant contracts.
2.1.3 upon
execution, this Agreement consists of legal, valid and binding obligations of
the Parties which are enforceable under this Agreement.
2.2 Party
A and Party B hereto jointly and severally represents and warrants to Party C
that:
2.2.1 the
execution and delivery of the agreement and the performance of their obligations
will not violate or result in a default under (i) any material contract to
which Party A or Party B is bound or to which their assets may be subject; (ii)
any provision of the governing documents of Party B; (3) any law, rule or
regulation applicable to Party A or Party B or its property, operations or
assets.
2.2.2
Party A and Party B are not currently in breach or default of a material
agreement, governing document or applicable law;
2.2.3
there are no pending, threatened or contemplated legal or other proceedings by
any governmental agency which would seek to enjoin or prevent the parties from
entering into the Agreement or consummating the transactions contemplated by the
Agreement; and
2.2.4
Party B is legally registered, validly existing and in good standing under the
laws and regulations of the PRC.
Article
3 Content of Services
During
the Management Consultant Period (defined please refer to Article 4), as the
exclusive management consultant, Party C shall be fully responsible for the
management of Party B. The management service includes but not limited to the
following issues:
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3.1 Party
C shall be fully responsible for the operation and management of Party B,
including appointing members of the Board of Directors and the supervisors,
hiring, overseeing and termination of Party B’s management, administrative and
other personnel, and having responsibility for all aspects of the operations of
Party B. Party A and Party B shall make the resolutions of the shareholders’
meeting and the Board of Directors in accordance with the decisions of Party
C.
3.2 Party
C has the right to manage and control all capital of Party B. Party B shall open
an Management Account or designate an existing account as an management account
(“Management Account”). Party C has the exclusive right to decide how
to use the funds in the Management Account. The signer of the Management Account
shall be appointed or confirmed by Party C. Since the effective date of this
Agreement, all of the cash of Party B shall be kept in this Management Account,
including but not limited to its existing working capital and income received
from operating hospitals, performing medical services, selling medicine, and
otherwise acquiring, purchasing, managing or disposing of its equipment,
medicines, inventory, accounts receivable and other assets; all payments of
funds shall be disbursed through this Management Account, including but not
limited to the payment of all existing accounts payable and operating expenses,
payment of employees salaries and purchase of assets; and all revenues from its
operations shall be kept in this Management Account.
3.3 Since
the effective date of this Agreement, Party C shall have the full right to
control and administrate the internal financial affairs and daily production and
operation of Party B, execution and performance of contracts, and payment of
taxes etc..
3.4 Party
A shall provide necessary assistance to Party C unconditionally for decision
making in operation and management of Party B.
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Article
4 Management Consultant Period
The
management consultant period (“Management Consultant Period”) shall be
commencing from the effective date of this Agreement to the earlier of the
following date:
4.1 The
date on which the business term of Party B expires and is not renewed within the
applicable period of time provided under applicable law for such
renewal;
4.2 The
date on which the Parties reach a mutual agreement for the termination of the
management consultancy;
4.3 The
date on which Party C completes the acquisition of 100% equity interests or
assets of Party B; or
4.4 At
the time that termination of this Agreement occurs pursuant to Article 11
hereof.
Article
5 Payment terms
In order
to perform the Agreement, Party B shall make a payment to Party C for the
service of management consultancy in an amount equal to the amount of the net
profits of Party B, being the monthly revenues after deduction of operating
costs, expenses and taxes.
Article
6 Rights and Obligations of Party A and Party
B
6.1 Party
A has the right to know the business conditions of Party B at any time and
provide proposals;
6.2 As
of the effective date of this Agreement, Party A and Party B shall hand over its
all business materials together with personnel files, Business License,
corporate seal, financial seal and other materials to Party C or its authorized
representative;
6.3 Party
A has no right to make any decision regarding Party B’s operations without the
written consent of Party C;
6.4 Party
A and Party B shall assist Party C in carrying out the management consultancy
according to Party C’s requirement;
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6.5 Party
A and Party B shall perform its obligations pursuant to the Shareholders’ Voting
Rights Proxy Agreement and the Call Option Agreement and relevant agreements,
and not to violate the said agreements;
6.6 Party
A shall not intervene in Party C’s management and operation over Party B in any
form by making use of shareholder’s power;
6.7 Party
A shall not entrust or authorize its shareholder’s rights in Party B to a third
party other than Party C without Party C’s consent;
6.8 Party
A and Party B shall not entrust a third party other than Party C to manage Party
B in any form without Party C’s consent;
6.9 Party
B shall open an account or designate an existing account as an Management
Account promptly;
6.10 Party
A and Party B shall actively assist Party C to expand Party B’s operations to
the extent deemed necessary or desirable by Party C;
6.11 Party
A and Party B shall assist Party C to purchase and improve medical and other
equipment, transportation vehicles, office supplies, communication equipment,
etc. in the PRC;
6.12 Party
A and Party B shall actively assist Part C to complete any required procedures
relating to foreign mergers and acquisitions in accordance with relevant laws
and regulations.
6.13 Party
A and Party B shall not terminate this Agreement unilaterally with any
reason;
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6.14 Party
A and Party B shall enjoy other rights and perform other obligations under the
Agreement.
Article
7 Rights and Obligations of the Party
C
7.1 Party
C has an independent and full right to manage Party B;
7.2 Party
C has the right to dispose of all assets of Party B;
7.3 Party
C has the right to enjoy profits arising from Party B’s operations during the
period of entrusted management;;
7.4 Party
C has the right to nominate directors to the shareholders of Party
B;
7.5 Party
C has the right to appoint general manager, deputy general manager, financial
manager and other senior management personnel of Party B according to the
resolutions of its Board of Directors;
7.6 Party
C has the right to convene shareholders’ meetings of Party B in accordance with
the Shareholder’s Rights Proxy Agreement and make resolutions of shareholders’
meetings; and
7.7 Party
C has the right to manage the Management Account;
7.8 Party
C has the right to manage all business and operations of Party B;
7.9 According
to the requirements of Party A, Party C shall inform Party A about the business
conditions of Party B and accept the reasonable suggestions of Party
A;
7.10 Party
C shall enjoy other rights and perform other obligations under the
Agreement.
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Article
8 Taxes and expenses
Any and
all taxes and expenses arising from execution and performance of this Agreement
and during the course of the operation through management consultancy shall be
borne by the Parties respectively pursuant to the provisions of laws and
regulations.
Article
9 Intellectual Property rights
Party C
shall strictly keep secret of patent, trademark, data, drawings, specifications
or other technical information furnished in writing or otherwise by Party A and
Party B according to this Agreement, including any intellectual property rights
therein.
Furthermore,
except as may occur under the terms of the Call Option Agreement, the
Shareholder’s Proxy Rights Agreement and the Share Pledge Agreement of even date
herewith (together with this Agreement, collectively, the “Domestic
Agreements”), the above mentioned intellectual property rights information shall
in no event become the property of Party C and shall be used by Party C only to
perform its obligations hereunder and under the other
Domestic Agreements. Except as provided hereunder,. they shall not be duplicated
or disclosed to any third party or used in whole or in part for any other
purpose. The furnishing of patent, trademark, data, drawings, specifications or
other technical information shall not be construed as granting to Party C any
ownership of any kind whatsoever, express or implied.
Article
10 Liabilities for breach of Agreement
10.1 Both
Parties shall exercise the rights and perform the obligations appropriately in
order to ensure this Agreement to be performed smoothly. Either party shall
undertake the responsibility of the breach of the Agreement, and shall
compensate the other party for all losses caused.
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10.2
Party A and Party B shall, jointly and severally, indemnify and hold harmless
Party C, and its successors and assigns, and each of their respective officers,
directors, affiliates, executives, Directors, managers, deputy managers,
members, equity holders, attorneys, employees, agents and representatives, from
and against any and all actions, suits, claims, demands, debts, liabilities,
obligations, losses, damages, costs and expenses (including reasonable
attorney’s fees and court costs), arising out of or caused by, directly or
indirectly (a) any material misrepresentation, breach or failure of any
representation or warranty made herein by Party A or Party B or any agreement or
document delivered in connection herewith; (b) any failure or refusal by Party A
or Party B to satisfy or perform any covenant, term or condition of this
Agreement required to be satisfied or performed by either or both of them; or
(c) the performance by Party C of its obligations and duties
hereunder.
Article
11 Force Majeure
Force
Majeure means all events which are beyond the control of either Party, is
unforeseen, or if foreseen, unavoidable and as a result of which Party A or
Party B is unable to perform its obligations under this Agreement. An Event of
Force Majeure includes, but is not limited to, acts of nature and natural
disasters such as flood, fire, drought, typhoon, storm, tidal wave, earthquake
or explosion, epidemic disease, shutdown, tsunami, accidents or any other
instances which cannot be foreseen, prevented or controlled including instances
which are accepted as Force Majeure in general international commercial
practices.
Party A
and Party B shall notify the other Parties in writing within [14] days after the
occurrence of the force majeure. If the force majeure causes Party A and Party B
to not be able to perform their obligations for 60 consecutive days, Party C
would be entitled to deliver, in its sole discretion, a written notice of
termination of the Agreement to Party A and Party B, and this Agreement shall be
terminated 30 days after Party A and Party B receive such termination
notice.
Article
12 Confidentiality
12.1 The
Parties agree to treat as strictly confidential and use solely for the purposes
of this Agreement all materials, documents, communications and other
information, whether commercial, technical or otherwise, obtained or received by
them as a result of negotiating or entering into this Agreement or performing
their respective obligations hereunder (hereinafter referred to as “Confidential
Information”). Neither of the parties shall, except with the prior written
consent of the other party hereto, publish, divulge or disclose any Confidential
Information to any third party.
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12.2 Each
Party may disclose Confidential Information in any of the following
circumstances:
12.2.1 To
the extent that disclosure is required by law or by the order of a court or
tribunal of competent jurisdiction and then only to such extent; or
12.2.2 If
so required by a regulatory or governmental authority acting in accordance with
its powers; or
12.2.3 If
the relevant Confidential Information is in the public domain;
12.2.4 If
the relevant Confidential Information was in the lawful possession of the
disclosing Party prior to its disclosure to the disclosing Party by the other
Party hereto and had not been received from the other Party hereto
PROVIDED
THAT the disclosing Party shall, in any of the above circumstances, give prior
notice to other Parties hereto of any proposed disclosure of Confidential
Information.
12.3 Notwithstanding
the other provisions of this Article, each of the Parties hereto shall be
entitled to disclose Confidential Information to any of its solicitors,
accountants or other professional advisers or to any of its directors or senior
employees provided that each such person has undertaken in writing to treat the
same as strictly confidential in terms similar to Article
12.1. Furthermore, nothing herein shall prohibit Party B or any of
its parents, successors or affiliates from publicly disclosing this Agreement or
any of the terms herein pursuant to the laws, rules, regulations or
interpretations of any governmental agency or self regulatory organization,
including by filing a copy of this Agreement with any such agency or
organization as an exhibit to any filing made or document provided by such
person thereunder.
Article
13 Applicable Law
The
execution, effectiveness, interpretation, implementation and settlement of
disputes of this Agreement will be governed by the PRC laws.
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Article
14 Settlement of Disputes
All
disputes arising out of or in connection with this Agreement shall be settled by
the Parties through friendly negotiation. In the event said disputes can not be
settled through friendly negotiation, either Party may submit the dispute to
arbitration to be conducted by South-China Sub-Commission of China International
Economic and Trade Arbitration Commission in Shenzhen in accordance with its
then current arbitration rules. The arbitral award shall be final and
binding.
Article
15 Effectiveness and Termination of Agreement
15.1 This
Agreement shall come into effect upon the seal and authorized signature of both
Parties, and terminate in accordance with Article 4.
15.2 Either
Party shall not terminate or modify this Agreement before Party C completes
acquisition of all equity interests or assets of Party B, unless both Parties
reach an agreement to terminate it.
15.3 The
provisions of Article 10.2 of this Agreement and the obligations of Party A and
Party B thereunder shall survive any termination of this Agreement.
Article
16 Miscellaneous
16.1 Amendment,
Modification and Supplement:
Any
amendment and supplement of this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed as a part of this Agreement.
16.2 Transfer
Except as
otherwise provided herein, without prior written consent from the other Party,
either Party can not subcontract, authorize or transfer any rights and
obligations under this Agreement to third party or its affiliated companies. Any
unauthorized transfers are invalid. Neither Party could unreasonably delay the
process to decide whether to agree the transfer. After providing Party A and
Party B with prior notice, Party C may assign or transfer its rights in and to
the Agreement, and delegate its duties with respect thereto, to any of its
affiliates in its sole discretion.
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16.3 Partial
invalidity
If, at
any time, any provision hereof is or becomes unenforceable in any respect under
the law of any jurisdiction, which will not cause material adverse effects on
the rights and obligations of the Parties under this Agreement, the other
provisions remain valid.
16.4 Waivers
Waivers
in writing signed by the Parties are considered valid. No failure to exercise on
the part of either Party, any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any other right
or remedy.
16.5 Successor
This
Agreement shall equally bind and benefit the successor or the permitted
transferee of the Parties.
16.6 Languages
This
Agreement has been written and signed between the Parties in English and Chinese
languages. Both language versions shall be equally authentic. If there are
conflicts or discrepancy between two versions, both parties agree that Chinese
version shall prevail.
16.7 Copies
of Agreement
This
Agreement is signed in four copies, Each party holds one copy， others for
relevant procedures. Either one is considered as original and has the same
effect.
In
witness hereof, the Agreement is duly executed by the Parties hereto on the date
first written above.
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(REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK)
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(Page of
signature only)
Party
A:
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Xxxxxxxx
Xx(signature):
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/s/
Xxxxxxxx Xx
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Party
B:
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Guangzhou
Dongfang Hospital Co., Ltd (seal)
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Legal
representative or Authorized representative(Signature)
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/s/
Xxxxxxxx Xx
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Party C: Guangzhou
Shouzhi Medical Institution Management Co. Ltd. (seal)
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Legal
representative or Authorized representative(Signature)
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/s/
Xxxxxxxx Xx
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Date:
June 14, 2010
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